Coming Crash In Stocks To Trigger The Next Recession? | Wolf Richter

**Wolf Richter** (0:00)
That's the risk I see, because valuations are in the same ballpark, really, as they were before the dot-com bust, and we have the same kind of dynamics, we have the same kind of exuberance. When that ends, when people who have made large amounts of money, and now some of them are leveraged, and so they will lose most of their assets, like in no time, and that will stop their spending and their tracks. I'm sure that we will get a recession if there's a significant stock market sell-off.

**Adam Taggart** (0:40)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. After embracing the no-landing narrative last year and later unleashing animal spirits after the presidential election that drove stocks to record levels of euphoria, the national mood has turned substantially more dour. Suddenly, the headlines are filled with fears of recession. The post-COVID higher cost of living and the uncertainty caused by the new administration's policies has many fearing for their household budgets, their portfolios and their jobs. So are things really this bad? After all, the economy is still growing, inflation is moderated mostly and unemployment remains low. When there are so many cross-currences there are today, it's prudent to seek the counsel of those who take a cold and calculated look at the data to see what is versus what our biases may want us to see, which is why we're fortunate to speak with macro analyst Wolf Richter of wolfstreet.com today, who will share with us what the charts he regularly compiles are telling him about the true state of today's economy and markets. Wolf, thanks so much for joining us today.

**Wolf Richter** (1:45)
Thank you, Adam.

**Adam Taggart** (1:47)
All right, Wolf. Well, look, thanks so much for coming back on. And in that intro there, I talk about the various cross-currence.
I know from your previous appearances on this channel, you're coming back a little gun-shy because there is a vocal minority on here that when you present data that isn't necessarily matching their preconceptions, they push back pretty hard on it. And look, I think that the whole reason this channel exists, right, is to try to help people get a better sense of what's truly happening so that they can make more informed decisions going forward. And an important part of being an informed person is to keep your mind open to the data and to certainly let challenging data come into the picture so that you can either revise your preconceptions or defend them if you feel your data is superior, right? So anyways, I appreciate you coming back on here, Wolf, and all I want you to do, which is what I said when I invited you back on, is just tell us what your data is telling you and then we'll let the audience, you know, choose accordingly whether they find it compelling or not. But folks, you know, I just want to say don't shoot the messenger. Wolf is just here sharing with us the data that he looks at on a daily basis, and Wolf is one of the most respected data analysts and chartists out there. So anyways, Wolf, it's a pleasure to have you back on.

**Wolf Richter** (3:09)
Thank you, Adam.

**Adam Taggart** (3:11)
All right. Well, look, my friend, why don't we start with my normal kickoff question and then I'll get into the details. What is your current assessment of the global economy and the financial markets?

**Wolf Richter** (3:22)
There's a little bit of chaos going on right now, I think.
In terms of uncertainty, and not actually chaos in how things are really working, but in terms of just the enormous amount of uncertainty that the Trump administration has thrown out there. Some of it is really needed and good, and so I'm not going to say it's all bad. But anytime you change something as huge as the United States economy, or even huge as the global economy, which is kind of what he's trying to do, you're going to have a lot of uncertainty as to how this can even be implemented, how this will work out, and each country is struggling with their own interpretations of these issues and it affects countries differently. And so this chaos and uncertainty right now is kind of astounding. And I can see this in the commenters on my side. It's kind of entertaining because people are just stunned and amused to some extent by all the different things that are being thrown out there on a daily basis. And the tariffs, they come and then they go, and then they come back, and the layoffs that are happening, and then unhappening, and it's just kind of a total chaos and uncertainty.