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Here are the facts -  - YoY contractions in GDI, M2, bank ...

Here are the facts -

- YoY contractions in GDI, M2, bank credit, C&I loans
- Decline in LEIs for 20 months
- Deepest/longest y.c. inversion in ~40 years
- Cyclical employment contracting on 6-month basis

Collectively, we've never had this set of conditions outside of a recession.

If "this time truly is different", the jobs market will stay strong and the economy will re-accelerate. When that happens, I'll admit that these reliable indicators no longer work and won't rely on them in the future.

Until then, I'll go with "the weight of the evidence" and remain cautious/defensive
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  • DreamyLucid : To be honest, the yield curve inversion has already disproved that it’s an indicator for a recession.

  • SpyderCall DreamyLucid: If you dont consider that a recession has already happened, then I think we are still in a wait and see type of situation.
    If the economy improves, yields uninvert completely AND begin to steepen, with no "recession" in between, then these indicators will have been unreliable this go around.
    That is my take on it so far.

  • DreamyLucid SpyderCall: If the feds or treasury doesn’t want to declare then yeah. But we were probably in a rolling recession in 2023

  • SpyderCall DreamyLucid: I could see that. 2022 through 2023 could be argued as a rolling recession. The economic data was terrible 😫

  • FirstStrike Veteran SpyderCall: I ways thought that 2 quarters of negative GDP was a recession? That's already happened, I am coming to believe we had a recession that no one is calling a recession and could be moving back into risk on situation. I have and will continue looking for discounts in the small to mid caps space. Rates down risk up, rates down= cheaper to borrow money.

  • SpyderCall FirstStrike Veteran: Heard. a lot of these interest rate sensitive industries saw a lot of investors piling in towards the end of 2023. Like Reits, regional banks, insurance companies, etc.
    I missed the ride on a lot of good companies in these industries. I wasn't expecting them to rip like they did.