The Mainstream Media Reverses Course on a Recession

Several banks called for a recession in 2025 as recently as last week, following a surprise negative read in GDP.

But with a China trade deal in place, many of those big Wall Street banks are reversing course. This morning, JPMorgan noted that it did not see a recession anymore.

That’s also reflected in the betting markets. Polymarket showed as much as a 66% chance of a recession in 2025 – as recently as the start of the month.

Today, the odds are now down to around 40% – and should fall further as more trade deals are announced.

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As Andrew notes:

Most mainstream analysts will take a current trend and extrapolate its continuation out forever. That’s lazy, first-level thinking. A better approach is to think in terms of probabilities and what can change them. Tariff and trade news can – and now has – changed on a dime.

We’re still skeptical about this current market rally, even as many factors have turned bullish.

Why? One reason is simple – we won’t rule out a recession as government spending shrinks.

Given that the government spends more than it brings in, about 6% of GDP, a government recession wouldn’t be a bad idea — just a painful, but necessary correction.

That’s the line of thinking behind some of our upcoming research, where we look at President Trump’s three-step plan to reform the economy on sturdier ground. If it comes to pass, it could be an incredibly positive Grey Swan event. We’ll have further details on that research later this month.

-Addison

Several banks called for a recession in 2025 as recently as last week, following a surprise negative read in GDP.

But with a China trade deal in place, many of those big Wall Street banks are reversing course. This morning, JPMorgan noted that it did not see a recession anymore.

That’s also reflected in the betting markets. Polymarket showed as much as a 66% chance of a recession in 2025 – as recently as the start of the month.

Today, the odds are now down to around 40% – and should fall further as more trade deals are announced.

Turn Your Images On

As Andrew notes:

Most mainstream analysts will take a current trend and extrapolate its continuation out forever. That’s lazy, first-level thinking. A better approach is to think in terms of probabilities and what can change them. Tariff and trade news can – and now has – changed on a dime.

We’re still skeptical about this current market rally, even as many factors have turned bullish.

Why? One reason is simple – we won’t rule out a recession as government spending shrinks.

Given that the government spends more than it brings in, about 6% of GDP, a government recession wouldn’t be a bad idea — just a painful, but necessary correction.

-Addison

Technology is a double-edged sword. We’re still living in the long tail of a hard money, capitalist society – and reaping new technologies out of it.

But the destruction of the purchasing power of the dollar stands to create a crisis – and drive investors back to safe havens like gold.

All these rumors could work out to Intel’s benefit. That’s something no investor can know. What we can know is that the road to recovery will be a rocky one, fraught with disappointments along the way. It is all but certain that at some point, Intel stock will once again be far cheaper than it is today. And at that later date, investors will have far more information to be able to judge the likely success of the promised comeback. We’re not going to buy the rumors. We will wait for the news.

There’s something about big, round numbers that draws investors like moths to a flame.

In the stock market, every 1,000 points in the Dow or 100 points in the S&P 500 tends to act like a magnet.

Now, after consolidating for five months, gold has broken higher to $4,000.

AI stocks are running hot. They’re not the only game in town… but they’re about half of it.

JPMorgan just reviewed all of the 500 companies in the S&P 500. A full 41 of them are AI-related. While that’s less than 10% of the index by total, it is over 45% of the index by market cap.