David Rosenberg, an economist and the founder of Rosenberg Research, was one of the first to sense the cataclysm that turned into the 2008 recession. He's been calling for a recession since last year and told me that despite the more upbeat recent data, a downturn is still on the way. Rosenberg noted that the average time from the Fed's first interest-rate hike in a cycle to the start of a recession is about 15 months — and the current hiking cycle has been going for 16. But as was the case in the 2008 recession, things look like they're playing out over a bit longer timeline in this cycle. When the economy dipped into recession in December 2007, it had been 3 ½ years since the Fed started to raise rates in July 2004.
China is having big issues right now with youth unemployment and bankrupt builders and property development companies. This might turn into dominoes, especially if Europe continues to struggle.
Thomas Sowell: There are no solutions, just trade-offs.
