I Think I’ve Seen this Movie Before…
Springtime and winter,
Night follows day,
New becomes old,
and Economic correction
follows a Booming economy.
You know I’m an optimist, right?
But I’m not a fatal optimist. My upbeat desire for a brighter tomorrow never blinds me to the reality of twilight.
America tumbled into economic disaster in 2008 when dishonest financiers came up with a fancy new way to package sub-prime mortgages. Bernie Madoff made himself a dark name, as did Enron and MCI. Shortly thereafter, a deepwater oil rig pumped 780,000 cubic meters of oil into the sea, for which Amoco/British Petroleum – BP – was fined $4.5 billion and the U.S. government temporarily banned that company from new federal contracts over its “lack of business integrity.”
Three weird things have come to my attention in recent weeks:
- We’ve been gathering economic momentum for almost a decade.
- Business is so vibrant in most cities that businesses can’t find enough employees. Top-tier restaurants and hotels are hiring front-line people that Arby’s wouldn’t have hired 10 years ago. I’ve seen this happen twice before, and both times it foreshadowed a correction.
- Elon Musk – America’s poster boy for forward-thinking business leaders – sent a tweet at 9:48AM on August 7th that revealed a strange new mood, and the Securities and Exchange Commission fined him $20,000,000 for it.
On April 28, 2018, Larry Elliot wrote, “All upturns come to an end sooner or later and the fact that it is now almost nine years since the US emerged from recession has inevitably led to speculation about when and how the next downturn will arrive.”
I’m not saying an economic correction is imminent. But I am saying that it is out there somewhere, waiting for us. And according to history, it is already overdue.
Keep in mind that none of my observations are scientific, and none of them are conclusive.
In fact, it could be argued that they’re not even objective.
But I can’t shake this nagging feeling that I’ve seen this movie before, and my gut is telling me what happens next.
I really hope I’m wrong.
Roy H. Williams
PS – If I’m wrong, I’m going to celebrate with a gigantic party in Austin to which you will be invited. Stay tuned to the Monday Morning Memo for further details. I really want to throw that party.