A Typical Pattern Shows We’re Headed for Recession

by Andrew Zatlin
Financial Sense

We’re witnessing a very typical pattern right before recessions and market collapses.

The market’s price-to-earnings (P/E) ratio is currently at a level seen only before recessions.

[…] Before we flat out say there will be a recession, we need to dig deeper into why we’re here today.

First, we can look at earnings (the E in P/E.) Earnings have stalled. Yet prices (the P in P/E) have still rallied. This pushes the P/E ratio upward.

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