The Recession Is Here… Time to Buy

Andy Snyder|March 3, 2022

For sale… one ugly rooster.

We heard his shout yesterday morning. The light shining from our office must have awoken him in the pre-dawn hours.

We didn’t pay it much attention.

A distant rooster’s crow is nothing new out here.

But just now… again… we heard the half-cocked crow of a pre-pubescent rooster.

Clork-a-dardle-dah.

One of Mrs. Manward’s hens doesn’t identify as such. That egg layer isn’t an egg layer.

He’s free to a good home… or a good cook.

Such is life.

Not Right

As the sun awakened, we turned our eye toward economics and the trouble that’s brewing.

We heard the distant crows… They’re getting close to home. Something is not right.

Prices are soaring.

We asked the gas station attendant last night if we’ll soon need to fill out a credit report to get a tankful. He gave us a toothy grin and said, “Biden better send us a check for this one.”

We weren’t sure if he was kidding. We didn’t inquire. We don’t ask questions we don’t want the answers to.

It’s all part of what we’ve said would come. We’ve been calling for a recession. The second half of the year, we said, will be worth less than the first half.

To many, we’re stating the obvious.

A Nasty Picture

Just this week, the fine folks at the Atlanta Fed released a set of dire numbers.

Their GDPNow isn’t an “official” forecast. Instead, it’s a real-time look at the nation’s real GDP. It’s free of all the end-of-quarter tweaking, updating and adjusting that goes into the final print.

But darn, does it paint a nasty picture.

Its latest estimate?

A big ‘ol rooster egg… 0.0% growth.

Add up all the profit expansion… subtract a whopping dose of inflation… and what do we get? Nothing.

Some folks call it stagflation. Prices are going up, but they’re not taking anybody with them.

We call it the obvious result.

Inevitable

The folks who don’t ever bother to scratch their heads and put one and one together will blame the Russian disaster for the downturn. After all, just prior to Putin’s push, the same Fed figures were approaching 2%.

But we say nay, nay… That’s more of the lazy logic that got us into this mess.

We say what’s happening now was bound to happen. Our economy was simply a bug waiting for a windshield.

When we build our house on sand, the Bible would tell us, it doesn’t take much to erode it all away. It’s going to be either this wave… or the next.

But a wave will come.

Print $5 trillion… kill interest rates… buy the market… stimulate the stimulated… and no history book tells us the tale will just trickle to a close.

No.

There’s always a crescendo… a false close… and a surprise at the end.

Keep Reading

There are still more chapters in this book.

Read along as the Fed raises rates and then turns around even quicker.

These depressing GDP figures will eventually hit the printer. They must.

When they do, watch as interventions and stimulus make the news once again. A gas tax holiday? It’s already being pushed. (Midterms, after all, could be brutal.)

Then turn to the next chapter as the current malaise in the markets turns into more indifferent speculation as investors realize the pumping will continue.

It must.

No melt-up goes in a straight line, just as no meltdown plunges all at once.

It may not feel like a good time to buy.

But it is.

This is March 2009 and March 2020 all over again.

The hen is crowing.

It’s not right.

But pay close attention to what it means.