When last I checked in on Credit Suisse’s James Sweeney, he was busy delivering a rather sobering assessment of balance sheet risk in the U.S. corporate sector in the context of the current economic cycle.

One of the things Sweeney mentioned was that two things you shouldn’t do if you’re interested in forecasting the next recession are: “1) Count the months since the last recession, 2) Observe postwar recessions and write down what patterns emerge just prior to most recessions”.

It’s not, he said, that counting months and observing patterns are exercises in futility. “They have been done so often that the stylized facts that emerge have become platitudes, some of which are surely still relevant”, he conceded. Rather, Sweeney simply suggested that things have changed over the past three or so decades and although post-crisis monetary policy has undoubtedly prolonged the current cycle, that’s not the only factor at play when it comes to explaining the length of expansions which, Credit Suisse reminds you, have been lengthening since in the Great Moderation began. “Things seem to work differently after 1982?, Sweeney observed.

In a separate piece out last month, Sweeney noted that Credit Suisse’s risk appetite measures had fallen into “panic” territory, a state of affairs he attributed to “trade disputes, the Italian budget, Fed tightening, emerging market turbulence” and disappointing European data.

It goes without saying that exactly none of those factors have gone away in terms of being a source of market angst since the first of July. In fact, they’ve all gotten materially worse with the possible exception of European data. Emerging markets, for instance, have cratered, with developing economy equities falling into a bear market and EM FX coming under immense pressure thanks to the collapse of the Turkish lira.

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