Y2K Relief
Federal Compulsions
Rewind the Tape to 1987
Correction Odds Rising
Sonoma, San Diego and SIC, and Elsewhere

If you travel as much as I do, you come to value nonstop flights. Connections introduce uncertainty and potential delays, not to mention what often feels like wasted time; but sometimes connections are just unavoidable. But you don’t want them to be too tight. Those five-minute sprints from one concourse to another are never fun. Better to have some breathing room.

So it is with economic cycles. Rarely do we move directly from boom to bust; but when the shift comes, it can develop quite quickly, even though the transition isn’t usually obvious in real time. As I look at the data and talk to my contacts, I’m beginning to conclude that we’re approaching one of those transitional phases. I think we’ll look back at 2018 as an in-between year… from good times to something eventually not so good.

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Now, let me stress that I’m not predicting imminent doom. As you’ll see below, I think the party can last another year, maybe even longer. But I do see storm clouds on the horizon, and they’re blowing our way.

That ominous horizon means that some strategy adjustments are probably in order. You need to be aware that the volatility we have seen in the stock market the past few days will become more the norm. I’ll get to that later. Let’s start by considering where we are now.