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About rich thank you very much and our next guest condition talking says all the uncertainty that surrounds our economy could be.
Could be what leads us back into recession Brian Wesbury joins us chief economist of advisors noteworthy comments because -- -- Optimistic about the economy and ask in a minute if you change your mind this morning this -- manufacturing number so strong in the stock market's up 150 but let me start by following up on.
David Stockman said.
Comments a moment a great day in saying that the economy and it and capitalism have been -- -- put it ruined by the Fed but he thank.
Yeah I I think -- -- -- -- -- ton of truth -- that I -- not.
Always agreed -- David Stockman but I did not disagree.
With one word he just told.
-- just said -- to dig into your viewers are he was awesome he's absolutely right government's too big.
We've got all these taxes to worry about in the future we don't cut spending.
The Federal Reserve is trying to fill the hole it -- become the biggest financial institution in the world.
And that's why.
We are more worried today about uncertainty.
Brand and what's happened is that the risk reward ratio.
Has changed for business there's more risk.
And potentially a lot less reward and as a result businesses are holding back which increases.
The odds of recession.
It's interesting because.
What odds would you put on recession given the fact again this morning we're.
Optimistic I guess because -- manufacturing figure came in above fifty which right.
Its expansion and debt people say are maybe not maybe things are you are looking pretty -- but you still put what odds now on on our recession.
Yet again and and remember council back in 2010 when weeks but what we had our slow patch and then in 2011 we at a slow -- we did not change our -- we.
We stayed at 10% odds -- procession which in my view is the bottom because right one out of every ten years in recession is about our historical average over the last 3040 years.
So that's 10% well.
This year as we have had this slow patch especially a big drop in industrial production of big huge drop in durable goods orders.
Machinery orders are down 10% from a year ago.
These numbers concern us because what they say is even though the economy is growing.
But companies are holding back their holding cash they're not making new orders.
That worries us and John's restaurants now to go up to 25%.
-- -- that may seem low to some people up -- -- Our yeah.
You know hate look Northwestern.
Wildcats are five and now and -- very its use in the word recession what's going on in the world something weird about -- -- -- The whole point we're getting to is that.
Is is more prevalent than it has been since the nineteen right thirties -- I pleasantly I'm surprised about the manufacturing data today are.
Our base case is that the plow horse economy continues to roll along.
I'm not changing my stock allocation I think -- still think stocks are cheap.
If for the long run and and and the economy will get through this but the odds the chances of having a recession are clearly up.
From where they were 68 months ago fair enough Brian Wesbury first trust you look at the Dow 151.
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