What Inning Are We In? (Second of a Series)

In a move that’s bound to suggest we’re late in some kind of cycle, the US Postal Service announced last week it would soon be issuing the first-ever “scratch-and-sniff” stamps. “Frozen Treats Forever” are designed as popsicles in ten flavors including kiwi and watermelon fruit bars, as well as chocolate and root beer ice cream pops.

“Won’t this be cool to put on an envelope to your friends?” we told our four-year old. “What’s an envelope?” she asked.

Meanwhile, in the more prosaic delivery world of leveraged loans, we asked the perennial “inning” question of the co-head of a direct lending platform in NYC. His reply was revealing: “I’ll tell you what inning we’re in, if you tell me what game we’re playing.”

Experienced credit investors have observed, since the early stages of this recovery, sectoral differences within the broader economy. Thanks to the crash of oil prices in 2014, energy was the first to hit a recession. Housing prices and home building clawed their way back from 2009, but remain tied to local markets. And retail is arguably already a few innings into its own downturn.