First one must understand that "recession" is a contrived economic term with a technical definition: negative GDP or real growth over two or more successive quarters. You’re likely to have a hard time seeing that pointed out in any of the quotidian "news" you’re exposed to. On the other hand, nobody needs an economic definition to feel or experience being financially squeezed. On the other other hand, if you’re feeling squeezed, is it really because of overriding macro economic conditions out of your control (which could signal a general and widespread phenomena), or simply the consequences of your own choices that may not apply to enough people to spark off such a widespread condition?
Carl Futia could be wrong, just like anyone else. And I’ve seen him be wrong a number of times — though it’s usually in the very short term, which, let’s face it, is a crap shoot. But he’s almost never wrong in longer time frames (except for the dollar — he’s still waiting for the bottom which he thought was about a year ago), even in the face of almost everyone else calling for disaster.
This, of course, demands a real level of honesty that humans are ordinarily not up to. We were evolutionarily designed, over millions of years, to be quick to freak out and run for the hills. It served our primitive ancestors well on the African plains (what was the cost of being wrong?), and those successful genes exist at the very foundation of our being. We’re fearful beings, at heart, and that’s probably why we exist at al. The pertinent question that interests me, today, in a sophisticated and complex world — of our own making — is how many clever people have figured out — in a multitude of ways from politics to religion to business to activism — to profit, to earn a prosperous and rich lifestyle off the natural — but ultimately unwarranted in 20/20 hindsight — fears of Mr. Joe Average?
Let me make a distinction: there is no contradiction in believing or assessing that the markets should go down and that we should experience a severe and deep economic recession — as a result of a way-too-lose money supply, while at the same time baking confidently that in spite of it, things are headed to new highs and you might as well ride it.
That’s my unhedged bet.