Society Generale economist Albert Edwards thinks that tanking corporate profits are going to send the US into a recession—and some high-rollers agree. (Looking at you Soros, Zell.)
Edwards says that “our fail-safe recession indicator has stopped flashing amber and turned to red,” despite risk assets looking good for the past few weeks, Business Insider reports.
“Whole economy profits never normally fall this deeply without a recession unfolding,” Edwards wrote in a note to clients. “The economy will surely be swept away by a tidal wave of corporate default.”
Despite his bearishness, Edwards did give a hint on how to weather the impending tsunami. “If I had to pick one asset class to avoid it would be US corporate bonds, for which sky high default rates will shock investors.” [BI]
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