During his recent interview with CNBC, Paul Tudor Jones explained why there’s a really good chance of a recession in Q3. Here’s an excerpt from the interview:
Q1 2023 hedge fund letters, conferences and more
Tudor Jones: Then we have in a more intermediate basis, we have the financial cycle. The financial cycle, which is what we kind of look at internally is the combination of the historical debt and asset valuation boom/bust.
So if you think about post-covid we had this massive increase in debt, massive increase in equity valuation. It creates a boom in this financial cycle.
That’s happened in 1990, that happened in 2000, that happened 2008. Our financial cycle, the peak of total debt growth plus stock market valuation occurred in September of 2021.
Historically, it’s about a two-year lag when that really really bites and you go into recession.
That would be third quarter this year there’s a good chance, based on our most recent financial episodes, there’s a really good chance that we’re going to be on the verge of looking like, or actually going into a recession.
You can watch the entire discussion here:
Article by The Acquirer’s Multiple.
