Take it how u want but it looks like recession is upon us. Look at the indicators, the

This has always been in the cards. You can't inject over a trillion dollars of extra liquidity into the hands of consumers in just a couple of months, while also expecting them to stay home, and not believe rampant inflation would be the result. Similarly, you can't expect to jack rates up for an extended period to drain that liquidity, then not expect a recession once you start cutting back on rates.

-Any time the yield curve inverts to even half the point it is now, 12-ish months after it reverts to normal behavior we get a recession.

-6-12 months after rates start decreasing after a prolonged period of high rates, we get a recession.

-Sahm Rule.

The most successful predictors of recession we have, have been (or now are) pointing toward this inevitability. It was never "if", only "when".

I tend to agree. I think all of the talk about a “soft landing” was to try to draw-out the pull back over time instead of everyone realizing at once what was going to happen.

People understand stocks better due to the internet. I don’t think you’ll see a huge stock crash even if the economy enters recession. It didn’t even crash during Covid shutdowns.

I think only way you see a market crash of any significance beyond a minor correction is if we enter a depression stage with high UE and hyper inflation where average people have to cash out because they’re cash strapped and can’t afford basic living or service of debt

As long as most Americans can live paycheck to paycheck you won’t see a panic sell. More people understand to hold your stocks long term today than they used to

And when there is a decent sell off it always seems to rebound as more people “buy the dip.”

It’s just different today when the average American can trade stocks on an app whereas 15+ years ago only wealthy businessmen or upper middle class to rich folk traded stocks and had to do it through a broker or had a financial advisor do it for them

It’s never “different”. Don’t get caught with your pants down when a crash happens.

The recession is always 6 months away.

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People understand stocks better due to the internet. I don’t think you’ll see a huge stock crash even if the economy enters recession. It didn’t even crash during Covid shutdowns.

I think only way you see a market crash of any significance beyond a minor correction is if we enter a depression stage with high UE and hyper inflation where average people have to cash out because they’re cash strapped and can’t afford basic living or service of debt

As long as most Americans can live paycheck to paycheck you won’t see a panic sell. More people understand to hold your stocks long term today than they used to

And when there is a decent sell off it always seems to rebound as more people “buy the dip.”

It’s just different today when the average American can trade stocks on an app whereas 15+ years ago only wealthy businessmen or upper middle class to rich folk traded stocks and had to do it through a broker or had a financial advisor do it for them

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Equities rebounded hard after the covid crash because the Fed started buying amounts of USTs and MBS that dwarfed GFC intervention. Shortly thereafter Congress started sending checks to taxpayers and a lot of that ended up in equities. I disagree that people understand equities better due to the internet. If they did they wouldn't be passively plowing money into names with multiples that dwarf the bubbles of 1929, Japan in '89 and dotcom.

We have an entire generation of investors who have never seen much more than a 20% correction and (perhaps correctly) believe that it can't happen. I think they misunderstand the mechanism that has prevented a real crash post GFC which brings us back to my original point. The govt literally can't afford it.

In a highly financialized economy capital gains are the marginal driver of tax receipts. SPX fell 48% in dotcom and tax receipts fell 30%. If that happened today we would immediately enter a debt death spiral. Deficit spending is 7% of gdp now, not in a recession, not in a major war. In a real recession govt expenses explode, receipts contract and deficit/gdp goes double digits. Interest expense has already surpassed defense spending, not in a recession, while not at war.

TLDR: I agree with you that we likely won't see a real crash in equities. I disagree that it is because people understand what is going on. It's because the govt can't afford it. Forget inflation and employment, the Fed's #1 mandate is to keep the US Govt solvent.

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It didn’t even crash during Covid shutdowns.

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The market shite the bed bigly in 2020, but recovered quickly (picked up a lot of sub-$45 XOM at that time, was told by posters here I was throwing away my money by buying it ). This quick recovery (and the others which have happened to far less extents since then) are examples of what you went on to say...

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I think only way you see a market crash of any significance beyond a minor correction is if we enter a depression stage with high UE and hyper inflation where average people have to cash out because they’re cash strapped and can’t afford basic living or service of debt

As long as most Americans can live paycheck to paycheck you won’t see a panic sell. More people understand to hold your stocks long term today than they used to

And when there is a decent sell off it always seems to rebound as more people “buy the dip.”

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There's a definite extra firewall there with so many consumers able to participate directly in the market as opposed to prior crashes/corrections/etc.

The real problem isn't the market, it's consumer and federal debt (and by extension, the massive amount of money being poured into only servicing federal debt) and how they may impact a high-UE event.

Consumers are currently riding a debt load near historic highs with servicing rates being the same. The federal government will forevermore be spending at least $1T in annual debt servicing (which is ~27% of total spending).

If we get an extended high-UE event (something like 6%-7%, much less then 9%-10% we saw during the recession of the early 80s), this debt load could exacerbate problems as many of those consumers who have a hard time finding/keeping gainful employment are crushed under the debt they can no longer service. As they lose access to debt (or, worse, are left only with access to debt creation tools which really only put them deeper into the hole like payday loans, etc.), GDP drops, creating a limited feedback loop.

If this becomes an issue, the federal government will feel compelled to step in with more and more social programs/benefits (thus raising deficits, thus raising servicing amounts, which then would set the stage for an increasing number of things like this).