Photo: Getty

We’re more than two thirds of the way through 2018, and we still haven’t had a financial catastrophe yet. If you think that will last, you’re more confident than many experts. Do NOT click through, to maintain that optimism!

I, a mere blogger, would of course never offer any predictions about the economy. I will simply observe journalistically that prices of all financial assets have been bid up to historically high levels after ten years of easy money policies from central banks, and the entire money world knows that this can’t last, and every financial institution seems to be behaving as a living version of the famous 2007 comment by Citigroup’s CEO, “As long as the music is playing, you’ve got to get up and dance,” which was uttered just before everything descended into doom.

What will it take to make the booming stock market suddenly lurch downward in a sickening plunge? Emerging market troubles? Rising interest rates? A trade war? Some unpredictable geopolitical disaster spawned by our wise commander-in-chief? The answer doesn’t really matter. The big picture says: we’re standing on top of a cliff.

ITEM: The Wall Street Journal reports that consumer confidence is at its highest point since the year 2000. The last time people were this confident in the economy, the tech crash happened just months later. You have to look back to 1969 to find the time before that when confidence was this high... and in that case, a recession started just months later. I wonder if there is a pattern here?

ITEM: Goldman Sachs says that its proprietary bear market indicator “has risen to the highest in almost 50 years.” (In other words it’s been a half century since the charts said the stock market is this likely to decline sharply.)


Extremely strong indications that we’re in for a big stock market drop soon, and you can imagine the effects on the broader economy from that. Of course, you may choose to disregard these statistical indicators if you have strong confidence in the ability of our political leaders to navigate tricky economic situations with wisdom.