Albert Edwards’s tech “crash” call isn’t looking too shabby three weeks later. Or not too shabby as far as Albert Edwards equity crash calls go.

Big-cap US tech’s down another 7% since Edwards suggested, on July 18, that a burgeoning swoon on the Nasdaq 100 might soon metamorphose into something bigger. The “Magnificent 7” is down around 15% from the peak. Another bad session or three and the septet which runs the world will be in a proper bear market.

In his latest, Edwards predicted a US recession for the… I don’t know, let’s assume he writes 2.5 notes per month, and then we’ll multiply that by 190 months to get us back to 2008. What’s that? 480. In his latest, Edwards predicted a US recession for roughly the 480th time since the GFC. He’s been right once over that period. Thanks to a literal plague.

Edwards pointed to, among other things, the familiar chart below, which is just PCE inflation split into components.

“In an effort to bring overall core inflation below 2%, the Fed has driven core goods inflation into the dirt thereby offsetting sharply higher core services inflation,” Edwards wrote.

He went on to emphasize the mathematical relationship between inflation and reals — i.e., that if inflation’s falling and nominal rates aren’t cut, real rates will rise mechanically, “tighten[ing] their recessionary grip on the economy.”

Albert also mentioned the Sahm rule, calling it “extremely reliable,” on the way to highlighting the figure below, which illustrates a disconnect between a Conference Board-derived metric for labor market slack and the jobless rate.

Plainly, UNR isn’t going to “catch up” completely. The jobless rate’s not going to 7% anytime soon. If it does, brace yourself for a mind-bending rates rally.

Edwards’s point (I guess) was that there’s now a lot of evidence to suggest the labor market’s softening and that soon enough, that’ll show up in the NFP headline and the UNR. Indeed, it’s already showing up. The Sahm rule triggered on Friday and headline payroll growth undershot meaningfully.

One of the more amusing aspects of Edwards’s notes in the post-pandemic era is watching Albert attempt to placate a fan base comprised of people who, as much as they love a good deflation narrative, now spend their days engaged in juvenile political stunts like putting Joe Biden “I did this!” stickers next to gas pump readouts and on loaves of bread in the grocery aisle.

Edwards’s fans are overwhelmingly right-leaning, would-be libertarians who, if asked to name a famous libertarian “thinker,” would probably guess Peter Schiff. Albert has to figure out a way to stay true to his roots as a committed deflationist while nodding obliquely to the alleged inevitability of an inflation spiral brought on by a Fed that’s co-opted into a deep state Ponzi scheme run by George Soros and Stephanie Kelton. (I’m only half-joking. Some of Albert’s followers think there’s an alien mothership in an underground hangar at Area 51.)

“Maybe the inflationistas are rightly concluding that the Fed will be soon forced (by circumstance or government edict) to monetize away deficits just as they did during the Covid emergency. Is that the end game here?” Albert wondered. And then, in the very next breath: “I’m thinking that the inflation worrywarts are likely right on a medium-term, secular basis, even though the near-term outlook might be for a deflationary/recessionary shock that catalyses a new more extreme round of fiscal dysentery.”

As Andy Bernard would say: “Nailed it.”