Predicting 9 of the last 3 recessions, as co-writer Blue Eyes often rightly criticises me for, it s mugs game. Even the informed writers here knew the 2008 crash was coming, but how deep and when eluded everyone - markets are just not predictable.
But when we look back at the FTSE all share, a very rough guide to the UK economy over the decades since 1984, we can discern some key pointers:
1. Thatcher and Major oversaw a huge strengthening of the economy from is weakest point which was probably around 1982/3 in terms of the post baby boomer period.
2. The 1990 recession slowed growth in share prices from 300% to 25% until around 1995. Although there is a clear upturn from 1993.
3. From 1995 the dotcom bubble really distorted the picture until the crash of late 2000/2001, which also cross over with 911. A min-recession took place in the real economy in the Tech and Travel and Hospitality sectors, but the rest of the country survived relatively unscathed - stock prices took a big dip as the effects of the dotcom bubble wore off. The indices returning to its pre-1997 levels.
4. Then we have the disastrous leverage boom of 2003-2007. How so much damage could be done so quickly is frightening. Still, stock prices bounceback within 18 months and have been steady ever since.
5. However, since 1999 there has been zero real growth in the FTSE, even allowing for the changes in constituents, the index has shown little growth.
6. Reflecting the UK's wider productivity issues remarkably well, the indices has been suffering from slow growth since 2011 - 4 years now of slow chugging up.
So what next? Well from 1984 it took until 1987 for a crash and then the overall recovery too to around 1993. This boom then last until 2001. So a 4 year expansion, then a 7 year recovery period, followed by a 7 year boom.
Then we have the dotcom crash, a 3 year downturn then another 4 year boom. Then a huge crash followed by a weaker 7 year recovery period.
On balance, this means we are likely due a 3-4 year boom phase before the next crash. Given property cycles are often cited as 18 years - then this would also match with the next big bust not due to the early 2020's in theory.
What seems unlikely now from a historical context is a huge recession in the next few years. It maybe that with technology changes and volume of interactions that phases are getting shorter - but still, its hard to be a bear even now.
Of course, event dear boy, events - an EU Grexit or Brexit or the final realisation of the massive Chinese bubble in printed money and over-investment can jinx historical moves. But then again they always could.