Here's a recession call

The Societe Generale economist, and noted perma-bear, believes that the profit recession facing American corporations is going to lead to a collapse in corporate credit.

"Despite risk assets enjoying a few weeks in the sun our fail-safe recession indicator has stopped flashing amber and turned to red," wrote Edwards in a note to clients on Thursday.

He continued (emphasis added):

Whole economy profits never normally fall this deeply without a recession unfolding. And with the US corporate sector up to its eyes in debt, the one asset class to be avoided — even more so than the ridiculously overvalued equity market — is US corporate debt. The economy will surely be swept away by a tidal wave of corporate default.

And their expense sheet is looking at a 2% minimum wage hike pushing up the wage ladder. We get a sudden reversal in  stock buy backs.