Good morning contrarians! Concerns about recession are becoming more widespread. We had a brutal sell-off yesterday…

With little (okay, nothing) in the way of catalysts today and it being a summer Friday before a long holiday weekend in the U.S., one would normally expect things to be quiet. But these are not normal times.

How bad things get is still up for debate. It’s worth remembering that there is no such thing as a “mild recession” when you’re going through it. Those labels are added after the fact. (Source: Your author lived through the “mild recessions” of the early 1990s and early 2000s. They were certainly not mild at the time, in fact there was ample talk about the worst economic slowdown since the Great Depression. This talk resurfaced again in 2008, this time much more justifiably).

That doesn’t necessarily mean we’re going to see bread lines. But we don’t know where and when the dominos will fall. Therein lies the problem. Nothing ever really happens in isolation in global financial markets. The meltdown we’re seeing in cryptos (probably still in the very early innings) is in all likelihood going to be felt elsewhere. Once investors have to liquidate assets to raise cash, it can start a vicious cycle. Selling begets selling and then in asset classes thought to be immune — or at least somewhat protected.

More on this in today’s briefing and podcast, available here: