Recession Watch—-We’re On It!

One of the reasons we believe a mega-crash is on the way is that the stock market is priced for permanent full-employment perfection, world without end! But among the many things that our Keynesian central bankers have not accomplished is abolition of the business cycle. That's why the current 25X PE on the S&P 500 is so absurd. Corporate earnings are already down 19% from their September 2014 peak on an LTM basis, but that's even before the next economic downturn hits sectors like consumer discretionary, banking and technology.