I’m curious; how many times did you pick up a news feed this week, and didn’t see something about a looming AI bubble or market crash? I think this next downturn – whenever it happens – could be the most predicted correction in the history of the market.

Recessions, for all the dread they inspire, are pretty fascinating.

From 1300 to 1800 historians estimated that Britain was in a recession almost half the time. Storming recoveries followed crushing downturns. In the 19th century the country was in a recession only a quarter of the time.

Recessions are actually becoming a rare bread. Fast-forward to today and, outside Covid, we haven’t had a true global downturn since 2007–09. About one-third of the workforce has never lived through a prolonged slump.

What do recessions actually accomplish?

Joseph Schumpeter, an Austrian economist, argued that recessions act as an economic detox. In his view, long stretches of calm make capitalism a little “flabby”—as witnessed by “the army of consultants, influencers, and crypto traders who produce little, if anything of lasting value.” A downturn, he argues, helps to redirect talent and money back toward things that actually matter.

Recessions also clear the ground for new ideas. Microsoft and Apple emerged in the 1970s slump; Uber showed up after 2009. The Great Depression pushed small car makers aside and opened the door to modern mass production. When conditions are tough, entrepreneurs try revolutionary ideas when they have nothing to lose.

Studies from Vanderbilt and the Stockholm School of Economics even show that businesses born in recessions tend to outperform those launched in calmer periods. They are also more likely to make it all the way to the public markets.

With all the talk of a downturn, why does the market keep going up?

I think we are seeing a phenomenon that economists call “disaster myopia” – the tendency to forget that bad things can happen and the assumption that the line only goes up.

We don’t know when the next recession is. It may do some quiet housekeeping— or it may take a forceful turn. It’s guaranteed to cause pain. The good news is that we will likely come out of it in a better place.

In the meantime, let’s be mindful of our needs and build sensible portfolios.

Stay the course,
Barbara

Nov, 16, 2026

Source: The Economist; Recession recession. November 10th,(updated Nov 13th) 2025

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