the Daily Whale - 3 August 1993

Leaving OPEC aside, most recessions happen because people can’t see the future. People get overambitious and go too far, and the next thing you know, companies are cutting production to work off inventory, and consumers are waiting while they pay down their debt.

If only good forecasting were available, the expansion-recession cycle would flatten out and economic suffering would be limited to wars, oil price shocks, and particularly insincere presidential speeches.