The business cycle

Economies oscillate. They expand, run hot, slow, contract, recover, then expand again. The cycle is endogenous — it doesn't need an external shock to turn. A boom exhausts its own preconditions (cheap labour, cheap credit, slack capacity). Once those are gone, the same forces that powered the expansion start working in reverse.

Because different indicators peak at different times. The yield curve inverts ~14 months before recession. Equities top ~6 months before. Unemployment rises last — months after the recession is officially over. Knowing the order of the dance is the difference between fighting the last cycle and positioning for the next one.