💸🎭 THE PHANTOM OF THE RECESSIONARY OPERA 🎭💸
The alarm bells have started ringing. The media has announced the risk of a debt crisis. This isn't something recent or surprising; after all the post-pandemic liquidity injections and an initial inflationary shock that's barely under control, coupled with the wave of "curiously" early global elections, it's logical to think something is going to happen 1 to 2 years after these events. However, there are deeper issues at play.
If the media and official sources were to announce a recession, it would only be the first call; the opera would begin when they tell you everything is going perfectly and peace reigns. Understanding this is complex, but the curve between the maturity of the 10-year Treasury bond versus the 2-year bond may provide the answer. Statistically, once the curve is not inverted (10y yield is higher than the 2y yield) after an inversion wave (10y yield is lower than the 2y yield), some type of recession occurs after 3 to 24 months; not before. Therefore, the quintessence will be to estimate the depth of such a crisis because not all are equal in time and form.
Based on official data, the list of recession from 1970 to now is:
> November 1973 – March 1975: 16 months
> January 1980 – July 1980: 6 months
> July 1981 – November 1982: 16 months
> July 1990 – March 1991: 8 months
> March 2001 – November 2001: 8 months
> December 2007 – June 2009: 18 months
> February 2020 – April 2020: 2 months
As can be appreciated, many of these have had different magnitudes. Not all of them impacted the economy or the stock market in the same way. What's interesting is that, on average, there was one recession every decade, with the exception of the 1980s, which had a sequence of them: Could this be the Roaring Twenties?
It would be logical for one to happen in the next 5 years. There are many factors at play: CHUSssia tripolarity (China + US + Russia), the deleveraging of the US dollar [see: https://jjplindex.blogspot.com/2025/03/end-of-triffin-dilemma-forex-war.html ], the debt crisis in the US and Europe, the new energy paradigm [see: https://jjplindex.blogspot.com/2024/11/new-paradigm-of-energy-in-nations.html & https://jjplindex.blogspot.com/2025/02/moga-make-oil-great-again.html ], and the struggle in areas such as quantum computing [see: https://jjplindex.blogspot.com/2025/02/moga-make-oil-great-again.html ], artificial intelligence and biotech wars.
Finally... When do you think the next recession will happen? How long will it last? Will it be harsh or mild?
The best analysis is yours!
J. Joel Padilla
Copyright: Joel Padilla 2025
Comentarios
Publicar un comentario