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Why Should We Worry About the Longest US Economic Expansion Ever? Well,  Sh*it Happens!

In July the U. S. economic expansion which began in June 2009, will set the record at 121 months as the longest in memory (see chart), beating out the 10-year, 120-month expansion which ended in March 2009. Should we be worried?  Recessions tend to start not when economies are weak but at peaks when things seem to be going great, when people become too optimistic and tend to take greater risks.  Take the last great expansion throughout the 1990s propelled by computers, the internet and high-tech growth in general. That ended after the high-tech stock market bubble when overly optimistic investors propelled stocks to record highs.   So what could happen this time? Could it be tariff wars? Tremendous debt at financial institutions such as is happening at Deutsch Bank? Or some other unforeseen geopolitical event? Historically, bad things tend to happen at times of extreme optimism. Put another way, sh*t happens!

Why Should We Worry About the Longest US Economic Expansion Ever? Well,  Sh*it Happens
Why Should We Worry About the Longest US Economic Expansion Ever? Well,  Sh*it Happens

 


Brad Lamensdorf

Brad Lamensdorf, the founder and portfolio manager of Active Alts, is a principal and co-manager of the AdvisorShares Ranger Equity Bear ETF. He previously managed a long-short investment partnership from 1998-2005 under the name Tarpon Capital Management. Earlier in his career Mr. Lamensdorf was an equity trader/market strategist for the Bass Brothers’ trading arm. He managed a short only portfolio in addition to co-managing a $1bil hedging program. He also served as in-house market strategist for the entire internal and external network of Bass Brothers money managers.

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