Back when we were criticizing "The current recession drumbeat" of the media in November, or declaring in our "Happy New Year" post that, contrary to the conventional wisdom, a recession was still not imminent, there were very few others who agreed. By February 4, when we wrote "Still not a recession," the conventional wisdom was even more settled.
Now, however, the preliminary results are in and it appears the much-anticipated recession still has yet to arrive.
Here is a good post from Larry Kudlow yesterday quoting two good reactions to the first quarter GDP (including the aptly-titled "Dude, where's my recession?").
The most adamant recession predictions came from those who based their analysis on demand-side assumptions, such as the platitude that "the consumer is 70% of the economy."
Supply-side economists, such as Larry Kudlow, Brian Wesbury, and David Malpass, looked through a much clearer lens and saw the situation much more accurately. We have discussed the important difference between the supply-side (or production-based) and demand-side (or consumption-based) approaches several times, such as here.
We won't say "we told you so," because at Taylor Frigon Capital Management we do not base our investment discipline on the shaky practice of trying to call the next GDP number or the next move of the Fed. Doing so can end up causing you to "recession-proof" your portfolio at the worst possible time.
For future posts dealing with this same topic, see also:
- "Managing Investments in the New Era" 02/18/2009.
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