Aristotle's Klingelhofer: A short, steep recession is coming, and is needed

Jeff Klingelhofer, portfolio manager at Aristotle Pacific Capital, says that new Federal Reserve chairman Kevin Warsh is learning on the job, but he appears unafraid to tackle the inflation problem and take the tough medicine of raising interest rates, which is likely to create a recession. The good news out of that trouble, however, is that any downturn is likely to be short-lived, with a rip-snorting bull market emerging from a corrected economy and market.  David Trainer, president at New Constructs, revisits Netflix, a long-time Danger Zone pick that he says has moved out of trouble. While it hasn't gone all the way to the "attractive" level, Trainer says there is a much stronger path toward bigger profits and a better balance sheet. In "The Week That Is," Vijay Marolia,  chief investment officer at Regal Point Capital, discusses a little-known hedge fund that collapsed last week, and nearly took the stock market with it. While the fund was bailed out by another hedge fund, Marolia worries that there are other potential market-shockers out there, far more than even savvy investors recognize, and that there may not be any buffers to step in and save the day the next time it happens. In addition, he discusses how earnings expectations have gotten so high that long-term investors need to grit their teeth and ride out extra volatility, and he talks about how artificial intelligence is teaching investors to want everything now, shortening time horizons, promoting excessive risk-taking and creating unrealistic ideas of what real investing can deliver.