Time to Be Bullish

by Tim Price
Sovereign Man

“We don’t see a recession coming in the United States.” – Abby Joseph Cohen in a recent Bloomberg interview.

US corporate profits are experiencing a “gut wrenching slump”, according to SocGen’s Albert Edwards, in a research note published last Thursday (‘US whole economy profit slump makes a recession now virtually inevitable’).

“And with the US corporate sector up to its eyes in debt, the one asset class to be avoided – even more so than the ridiculously overvalued equity market – is US corporate debt. The economy will surely be swept away by a tidal wave of corporate default.”

The US profits data are certainly disappointing, as the chart below makes clear.

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