Ray Hendon

Recession Talk Has Gone From 'If' to 'How Bad'

Thanks to all for the comments. I do not write this kind of article reinforce my own opinion. Regardless of what I would like to happen, the economy has its own mind, so to speak. And, I don't know if we are going to have a serious recession or not. But, there are many headwinds that give me cause of caution.

johnheiderscheit and seven West, it is never the absolute rate of employment or unemployment that we look to as signs of recessions; it is the rate of change. I'm afraid that today's unemployment rates are almost a full point higher than this time last year. This is not a good trend. Also, keep in mind that unemployment is a lagging indicator, not a leading one.

The same is true for inflation. It is at a higher rate this last year than in previous years--again, not a good sign. Also, consumer spending, the ultimate culprit in our drama, has not held up well. December sales were far from robust--an ominous sign, to me.

But, I hope both of you are right. I certainly don't want a recession. Although I am free of job market constraints myself, it never does my portfolio any good to go through a downturn.

robyt and Danial Magid, thanks for the good words. And, thanks, Danial, for introducing me to a new acronym, DINKS.

Best wishes,

Ray