[schlumpf]

Good questions. Two differences to consider vis a vis past late cycle moments: US corporate profits haven't peaked, and the politicians could have a better claim on being part of the problem than on being part of the solution. I was tempted to add "leverage" but that's too slippery for a concise discussion.

Profits: it took about two years peak-to-trough for profits/GDP to correct during the past two recessions. Unless you see sudden stop risk, this suggests the US corprorate sector isn't staring down the barrel of a massive deleveraging...yet.

Politics: public support for legislative non-compromise does not speak to the kinds of policy fixes applied in 2008-9. Executive belligerence toward the Fed doesn't seem helpful either. As much as markets may have appeared to ignore US political risks while momentum was positive, it seems credulous to think this more of a divorce than a separation.

There are other quantitative arguments that the turn in the cycle is not here yet (e.g. employment, notwithstanding participation rate). But the prospect of a return to political gridlock is, to me, the most important risk contrast with recent past cycles.