Hall of Horrors, Stock Markets and Such..

A recession is a journey.  It has a vague beginning and a vague ending.  In between, there are clear markers of economic travail for the average person.  Unemployment, inflation, friends who are suffering through the experience, and, above all, agovernment composed of elites benefitting from the recession while you get screwed blue.  There are definite consequences if the recession is pinned on them.  Hence, they lie, gaslight, misdirect and mischaracterize to the greatest extent possible before admitting that we really are in a recession.  All you have to do is watch CNBC.

The public, left to figure the market out on their own, can come to some clear conclusions.  Currently the economy is shrinkingwhile employment levels appear to hold up.  That is where America is right now.  However, consumer sentiment is at all time lows.  There are hints of horrors yet to be encountered:

China invades Taiwan, Russia uses tactical nuclear weapons on Ukraine, Russian oil is completely shut down to the West.  Major financial institutions could suddenly declare bankruptcy.  The Fed could be forced to make decisions that are catastrophic to the economy.  It wouldn’t be the first time.  With so many aspects of the American economy out of line, the risk for different black swan events can only be greater.

Commentators have noted that the economic conditions can turn on a dime.  One bad economic report, a significant change in guidance from a major company, or any number of economic indicators becoming even worse than expected are other possibilities for a stock market crash.

These could be events by which no amount of intervention by the Fed, by Congress or any combination which would stop the kind of emergency responses needed to preserve existing companies financially. – or worse, to bring on unintended consequences. The breaking of supply chains, crop failures (Kansas wheat is already being written off), another pandemic, these have already happened and can easily happen again.  For some, there is a growing sense of fragility in the global economy.

Now for the hard part.  Some elites WANT a recession.  They want everyone to experience the hall of horrors for the stock market.  The Great Reset?  No, the Great Upset is more apt.  Especially if large numbers of people get laid off from their jobs, there will come a breaking point.  This cannot be understated.  The accusations have been circulating that the way in which unemployment is calculated by the federal government is entirely dishonest.  Instead, if they were using the standard calculation methods, unemployment in America could easily be twice as great as the current 3.4-3.6%.  Labor participation is also significantly worse.  Coupled with consumer sentiment, it follows that a new round of horrors await.

So, the next couple months will be the test.  The nicest thing that can be said comes from our friends at CNBC:  Expect More Volatility.  But where?  Energy?  Commodities? Financials?  Governments have intervened in all sorts of ways which have turned out to be negative as well as unexpected.  The Biden administration thought they could bring Russia down financially.  Instead, the ruble is stronger than ever.  Now comes a report of creditors refusing to accept payments from Russia in order to drive them into default.  What unexpected results will accrue from that decision?  Stay tuned.  These examples point out that the economic systems in question are complex enough to only add to the hall of horrors.