Is a recession coming? I don’t know and I don’t think anybody else does either. That doesn’t stop people from predicting an imminent recession, or at least whining a lot. I’m not going to predict a recession is coming, because I don’t know, and because I’m tired of hearing about it. Plus, I’ve already predicted five of the last two recessions.
I decided to think about this another way. How much time does the U.S. economy spend in recessions historically? Since 1950, the U.S. economy has been in recession ten percent of the time. That compares to 33 percent for Argentina, 28 percent for Venezuela, 12 percent for Brazil and nine percent for Mexico.
Ten percent for the U.S. seems low to me, and it raises a least two questions. First, does that mean that 90 percent of the time things are good? No, we’re just not in a recession 90 percent of the time. Still, that seems pretty great to me.
The second question is why do pundits and “experts” seem to constantly say a recession is just around the corner, given history? There are people, such as Ray Dalio, Nouriel Roubini, John Hussman, Marc Faber and Michael Burry, who are always predicting doom and gloom. They even have a name for these people. Online they are known as “permabears.”
Of course, if you’re always predicting a recession, eventually you’ll be right. But most of the time they are wrong, but still they persist.
Why? As usual, follow the money. The permabears know that fear and bad news are good business for them. It sells books, (bad) advice, seminars and more. They get it wrong almost all the time, but they are able to keep selling whatever they are selling.
After all, if you wrote a (short) book declaring everything is great, advise people to keep doing what you’re doing and you’ll make a lot of money. Just be happy and live your life!
Who would buy that? Good news doesn’t sell and neither do books that are under 20 pages long.
Now that that is settled, what’s next?
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