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The S&P500 realized volatility is below 10%.Credit spreads are super tight, and aside from some short-lived European political drama markets keep marching higher.
Yet, I think macro volatility is coming back.
First of all: we are suppressing economic cycles, injecting an artificial equilibrium which will only make the system more fragile in the long run.
We are not allowed to have a recession anymore.
This great chart from Prof. Lee Coppock shows the number of months the US economy spent in recession in 30-year periods starting from the 1870s until today.
The message is pretty clear: our…
Website: themacrocompass.substack.com
