Saturday, March 14, 2020

My recession call, explained

In the past week, I have had several discussions with investors about my recession call (see OK, I'm calling it). Since the publication of that note, Bloomberg Economics' US recession probability estimate spiked recently up to 55%.

The odds of a 2020 recession at betting sites are even higher.

To reiterate, I would like to clarify the reasoning behind my recession call, which is based on a triple threat:
  • The emergence of COVID-19 in China has created a supply shock that disrupted supply chains all over the world.
  • The Saudi-Russia oil price war, which has devastated the oil patch in the US.
  • The COVID-19 pandemic, which is expected to result in both a supply shock and demand shock in the US.
The full post can be found here.

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