"Way Too Much Is Priced Into This Market" | Mike "Mish" Shedlock

Why a downturn looks inevitable at this point

We're currently receiving a lot of mixed signals about the direction of the economy.

Inflation has dropped to 2.9%. And retail sales for July just beat expectations.

That's good, right?

But unemployment has risen to 4.3%, triggering the Sahm Rule recession indicator. And credit card and auto loan delinquencies are spiking. Wait -- those sound pretty concerning...

So, what's the true health of the economy?

Are we still on track for a soft/no landing scenario as we've been told for many quarters?

Or might it be wise to start preparing for something harder?

For answers, we're fortunately to speak today with someone who tracks the unfolding macro data on a daily basis, Mike "Mish" Shedlock, publisher of MishTalk.com

Looking at the preponderance of the macro data, Mish thinks a downturn is inevitable at this point.

For the details why, click here or on the video below:

---

ANNOUNCEMENT: tickets are now on sale for our Oct 19th, 2024 Fall online conference. Buy your ticket now at our lowest Early Bird discount price:

---

I’m so grateful to everyone who has kindly supported me by becoming a premium subscriber to this Substack. It’s making an important difference in helping me afford the substantial startup costs of running Thoughtful Money.

Premium supporters receive my “Adam’s Notes” summaries to the interviews I do, the new MacroPass rotation of reports from esteemed experts, plus periodic advance-viewing/exclusive content. My Adam’s Notes for this discussion with Mish are available to them below.

If you, too, would like to become a premium subscriber to this Substack (it’s only $15/mo, less than $0.50/day), then sign up now below:

---

Adam’s Notes: Mike “Mish” Shedlock (recorded 8.15.24)

EXECUTIVE SUMMARY

• Mish thinks the U.S. is likely already in a recession, despite some recent upbeat retail sales data. He emphasizes that the growing signs of economic weakness, such as increasing consumer credit delinquencies and deteriorating financial indicators, strongly suggest that the U.S. economy is headed towards or is already in a recessionary phase. This view is reinforced by recent data revisions and market reactions that align with past recession patterns.

• Mish explains that it can take time for a recession to be fully recognized in economic data, referencing the 2008 financial crisis as an example, where both job growth and industrial production remained positive even at the onset of the recession. He notes that recession indicators often lag, sometimes by as much as seven months, which can delay the clear identification of a downturn.

• Mish expresses serious concerns about the current state of the financial markets, particularly with rising delinquencies in consumer credit. He points out that