Four-Step Program
If you ask highly qualified professionals, many of whom probably spent the rough equivalent of a 20% house downpayment on their education, the odds of a US recession in the next 12 months are 63%.
That's according to the latest Wall Street Journal survey of economists, released last month.
As ever, such figures represent wholly quixotic attempts to science-ify the unscientific. With sincere apologies to economists, analysts and would-be macro mavens, there's no way to reliably assign odds to e
“The point is just that when we assign odds to economic outcomes, we tacitly assume that the vast majority of people are, by and large, motivated by the same set of concerns, when in fact they aren’t.”
Great point, sir.
I wish you had not edited out most of your initial sarcasm!
One other point- I never believed our pre-covid inflation rate was only 2% anyway – after factoring in the actual costs of raising 3 kids.
Good ideas well written. I think it is tragic when extremely intelligent/ perceptive people have great ideas but write or speak so badly that it is a punishment. As a recovering almost economist I reject the idea that our individual motivation is more important than big data. The markets are autistic. They don’t care what anybody wants- including me. The person who has the discipline to follow the data and ignore our emotions is very rare..
I do think the JOLTS chart has that rolling-over look. As more inflation inputs join in the rounding-over club, betting on inflation itself peaking and rolling-over will be increasingly attractive, as will the knock-on bets on yields peaking, tightening peaking, DXY peaking, and valuations bottoming. Waiting until CPI actually falls to mid-single-digits might be the safer route, but markets are so anticipatory and cash/defensive positioning so elevated, that I think being safe will mean being quite late to the party.
Jan must be an optimist by nature…I’m curious how he reconciles the soon to be convulsing (imho) housing market into his analysis…