Tweet by darioperkins

March 26, 2026

4) The second lesson is about how oil prices interacted with existing vulnerabilities, tipping the economy into recession. (A pattern observed throughout history, with oil-price spikes marking the top of most cycles.) The labour market was shaky. Strains had appeared in credit, but the situation didn't look disorderly. Note: credit had boomed in the late-80s, particularly in leveraged buyouts. The scale of that boom – 8%pts of GDP – is similar in magnitude to the recent run-up in private credit. But it wasn't "systemic". This was no 2008. (In fact, the 1990 recession was one of the most vanilla in history.)

Author
darioperkins
Date
March 26, 2026
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