Things are getting back to normal

 Sure, it matters—especially to this year’s earnings—whether or not there is a recession. 

Sure, whether the Fed starts cutting rates in late summer or waits until next year matters. And sure, whether inflation turns out to be sticky or not matters. 

But we don’t have to worry about missing out on a bubble or about a bubble bursting, a pandemic or the danger of a depression. 

Things are getting back to normal, and that is good.

James Mackintosh WSJ 8 January 2023

https://www.wsj.com/articles/last-year-investing-seemed-easy-not-anymore-11673128421

There is a lot of unfounded optimism

Buttonwood The Economist 5 January 2023

https://englundmacro.blogspot.com/2023/01/toppstrateg-spar-unikt-borsras-i-usa.html

This is my biggest fear entering 2023. 

Not that the Fed will make another mistake or inflation will get too high, but that the higher rates the Fed is (properly, if belatedly) using to fight inflation will set off a sandpile avalanche somewhere else. So many people and institutions are overleveraged.

Too many stocks are simply overvalued relative to the profits they can generate in this kind of economy. If you can get 4%–5% on Treasuries, why reach for yield in a risky stock market?

John Mauldin 6 January 2023

https://englundmacro.blogspot.com/2023/01/so-many-people-and-institutions-are.html