This Recession Indicator Is Sounding The Alarm
Today’s letter is brought to you by Trust & Will!Trust & Will is the most trusted name in online estate planning and settlement. The company has helped hundreds of thousands of families create their estate plans, and they’re just getting started. Trust & Will enables every American to create a plan that’s customized to fit their needs, their life, and their legacy. Their mission is to make estate planning simple, affordable, and inclusive. All of Trust & Will’s documents have been designed and approved by estate planning attorneys to meet the highest legal standards. Their process is simple, secure, complete, and customized for your specific needs and state requirements. To investors, Almost one month ago to the day (October 19th), I warned you to be fearful if we ever saw a barrage of articles claiming that a soft landing was going to happen. In that letter, I wrote the following and included this chart:
I wish that I had better news, but it appears that the barrage of “soft landing” articles is upon us. James Lavish pointed out the rapid increase in frequency earlier this week. This phenomenon is not exclusive to the Bloomberg Terminal. A quick Google search turns up plenty of articles predicting a soft landing across every major media platform, including CNBC, Wall Street Journal, Financial Times, and many more. We don’t have to merely rely on the mainstream media’s sudden obsession with a soft landing to find reasons to be concerned. The real-time Sahm Rule Recession Indicator, which “signals the start of a recession when the three-month moving average of the national unemployment rate rises by 0.50 percentage points or more relative to the minimum of the three-month averages from the previous 12 months,” is the highest it has been since the Global Financial Crisis if you ignore the COVID anomaly. We can also look at the Conference Board’s Leading Economic Index (LEI). According to Justyna Zabinska-La Monica, Senior Manager of Business Cycle Indicators at The Conference Board:
I have no idea whether a recession will actually come. Even if we have two consecutive quarters of negative GDP growth, which historically marked a recession, the government and economic organizations may not acknowledge it as they did in 2022. Predicting the future is hard. But it increasingly feels like the public narrative is offsides. We are not out of the woods yet, so people celebrating the Fed’s avoidance of a recession should be more cautious. Hope you all have a great weekend. I’ll talk to everyone on Monday. -Anthony Pompliano If you enjoyed this letter, you should consider subscribing to the Pomp Letter. I write 3-5x per week and explain in simple language what is happening in the economy, financial markets, and bitcoin. Aaron Ginn is the CEO & co-founder of Hydra Host, revolutionizing the way data centers operate by bringing GPUs everywhere to you easily and quickly. He also is the founder of the Lincoln Network, which connects the tech industry with policy makers. In this conversation, we talk about the state of venture capital, advanced computing, geopolitical conflict, politics, contrarian ideas, and more. Listen on iTunes: Click here Listen on Spotify: Click here Earn Bitcoin by listening on Fountain: Click here This Founder Raised $10 Million To Protect Artificial Intelligence From GovernmentsPodcast Sponsors
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