“Life’s under no obligation to give us what we expect.”
— Margaret Mitchell
“You could put somebody on the air who’s like a Permabear, doom person, who writes a macro newsletter,” CNBC’s Josh Brown explained yesterday live on the air.
Meh. I listen a little closer. Why not?
“And they will say,” Mr. Brown continued, “‘we haven’t yet begun to feel the full effects of one of the fastest tightening cycles in history.’ And that person would be absolutely right in pointing that out!”
I chuckle then. From CNBC? Heh.
Sometimes it’s a challenge to be a member of “The Armageddon Gang” as Time Magazine called me. Other times it’s just a labor of love. We often see the world gloaming and are okay with it. Maybe it’s the fact that winter is coming.
Still, maybe it’s selective hearing. The alternative narrative does seem to be seeping out of mainstream media. We always get nervous when our views are uttered… anywhere.
At the Dealbook Summit in New York on Wednesday, the leader of the world’s largest asset manager, Blackrock’s Larry Fink, warned of waking up to a “2ish-3%” growth in a world with “3-4%” inflation as monetary policymakers scale back aggressive bond purchases from the past decade. Fink said:
We’re actually going to enter a period of more, what I would call, malaise. My biggest worry is not that we are not going to see a fall in inflation back to 3-4%. My biggest worry is that the world is losing hope. We’re just not going to have an economy that is based on real growth.
Fink is confident inflation will subside but fears the world economy is headed toward anemic growth as geopolitical circumstances evolve and central banks around the world take years to unwind fiscal stimulus. Given, the bankers are committed to unwinding, at all.
Citi Bank echoed the sentiment, predicting “rolling, country-level recessions during the coming year.” BNP’s strategy team agreed: “We expect a downturn in global GDP growth in 2023, led by recessions in both the U.S. and the eurozone, with below-trend growth in China and many emerging markets.”
All well and good, say the “idiocracy” that runs the U.S. (That’s a new one, “idiocracy”, I like it. Compare with “meritocracy”, just for fun.)
“I believe there is a path by which a soft landing could happen,” Yellen said at the same DealBook Summit in New York. “I believe there are risks to that path, but I believe it is certainly possible for us to have a soft landing.”
Maybe she’s catching wind of end of year bonuses.
If we suffer a macro malaise, what happens to Main Street, then, Codie Sanchez might ask?
P.S. Don’t pounce, our friend Chris Mayer tweeted out a George Soros quote we liked. Whether you like Soros or not, he has invested his money according to a plan. From his book, here’s a note on the philosophy of work:
(Source: Chris Mayer’s Twitter)