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In an old-style economic cycle, recessions triggered bear markets.

Economic contraction slowed consumer spending, corporate earnings fell, and stock prices dropped. 

That’s not how it works when the credit cycle is in control.

John Mauldin 11 May 2018

If financial crashes trigger recessions, of course, you can't see them coming by reading the mainstreet entrails or looking for telltale recession warnings in the infamous "incoming data" from the Washington statistical mills.

The story is essentially the same in the run-up to the financial crisis and Great Recession. Even after the subprime fissures broke out in the spring and summer of 2007 and the stock market stalled at its new peak of 1550 in October and November, the incoming data appeared solid, as shown below.

Indeed, the stock peddlers declared that it was an age of goldilocks

David Stockman 11 May 2018

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