Gruber started off the show stating “This year, we’re down, I think 15% since then the market dropped below 30,000 came back up to 31.5 down to 30. It’s not looking good and my next guest sent me some information that they think that they already have it’s July now.” So either we had a positive GDP in the second quarter or we did not. The Atlanta Fed has been releasing data that gives us estimates as to what they think the second quarter GDP was going to be about 6 weeks ago. They estimated it to be a 2.5% as of this week, they’ve lowered it to negative. By technical definition, if you have first and second quarters consecutively negative GDP, that’s a recession, right?
Terry put in his own words: “So, on a tactical level, they’re telling us that it’s likely we’re already in a recession. Well, that’s exactly right. Why would they go from plus 2.5 to negative? What was the change from what happened? Leading economic data is falling off a cliff, so sales are down, CEO interviews are suggesting that they’re seeing a big drop in activity, a bunch of layoffs in the tech space. I mean, a bunch happened in the last 30 days. So, you’re starting to see the manifestation of a pretty significant decline and you know, the scary part, Steve, and all of this from both, just from a market standpoint and just overall economic activity, I guess, if you look at the analysts estimates for S&P earnings, they’re still predicting growth.” Terry also added that, yes, we are already in a Recession, but also in an Earnings Recession. To find out what that means, click here to watch the entire interview.
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