2018’s Star Analyst Makes The Case For A 2019 Earnings Recession
Ok, so we've spent a ton of time over the past six months talking about peak earnings and peak margins.
It's no secret that Trump's tax cuts and stimulus bolstered corporate bottom lines in 2018 and everyone (with the possible exception of Larry Kudlow) knows that the fiscal impulse is going to fade in 2019.
Generally speaking, the consensus is that Q3 marked something akin to "peak earnings growth" and everyone expects a sharp deceleration on that front in 2019. Further escalations on the tra
Is this sort of how like physicists cannot know what the weather will be like in two weeks because it is a dynamic system with too many variables, but can make predictions about what the universe will be like in 70 billion years?
“In a complex system, the interplay between the variables is much more important than the change in any single variable” – Prof. Steve Keen
Although in this case a couple of the variables are misunderstood – wage inflation is really a chimera – it’s only a problem in the ‘mind’ of The Fed – but in turn can make it a big problem for everyone else! Tariffs aren’t harmful to aggregate economic grow (although they can create short term disruption) BUT they are harmful to the biggest beneficiaries of so-called ‘free trade’ – i.e. the USA.