SFLA - Here's What Will Cause The Next Recession
Financial professionals frequently opine that asset prices are a function of economic conditions. Assets like stocks, bonds and real estate rise in value when the economy is expanding. They fall in value when the economy contracts.
The problem with those statements is that they represent a flawed understanding of 21st Century credit cycles. In particular, recessionary pressures did not cause the tech wreck (2000-2002) nor the housing collapse (2008-2009). Rather, the bursting of each asset bubble sparked the recession that followed.
Let's examine the respective timelines.
In the latter half of the 1990s, the