The wise guys keep buying the dips owing to the simple proposition that there is never a lasting bear market without a recession. After today’s blow-out we are likely to get another call to scoop up the ‘bargains’ because the correction has run its course and the US economy is still chugging along notwithstanding the contretemps in China and other places of purportedly limited moment. Indeed, on the basis of Wall Street’s muscle memory alone there is surely another dead cat bounce on its way any day. But here’s the memo. BTFDs is not working any more and, more crucially, there is a recession coming and soon. And then the bear will maul, not simply paw as today.
The fact is, BTFD hasn’t worked on a net basis hasn’t for about 730 days now. The S&P 500 closed today where it first crossed in February 2014.
This post was published at David Stockmans Contra Corner by David Stockman ‘ February 8, 2016.
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