Howard Marks Sees ‘Sea Change’
During the pandemic, I stopped covering Howard Marks's memos. For a time, I even stopped reading them.
Marks is a good writer, and a fine thinker as far as legendary investors go. The problem: That doesn't actually go very far.
If the literary yardstick is Warren Buffett, then sure, Marks is a veritable John Steinbeck. If philosophical prowess is measured against Ray Dalio's LinkedIn posts, then yeah, Howard is Marcus Aurelius. But prose isn't what I need from my capitalists, and with apologie
Thanks for posting this. The regency bias you’ve cited is still live and well, though there are some signs that the failure of the repeated FOMO rallies is eroding some of the confidence.
Where’s Santa?
In fact, world interest rates have never been lower than those of the recent four decades since 1350 AD, when the Black Death was in town.
https://www.visualcapitalist.com/the-history-of-interest-rates-over-670-years/
Eight centuries of global real interest … – Rutgers Economics
https://economics.rutgers.edu › workshop
Thank you
Thanks for posting. I’ve had three different 9% mortgages. I want to see more here 5.25-5.5% terminal for a year, then 5.5-6.0% on long bonds and 4.5 on short paper. That feels like something everyone can work with and no more acquisitions of $5 bil for startups with no product, no revenue and no earnings. Put the kookies back in the jar.
Mr. Lucky, I am just curious- when you had a 9% mortgage, what was the average single family home price ($380,000 in 2022) vs. the median US wage/salary (2022 is $56k)?
Mr. Lucky is almost a decade older than me but we both passed through the Volcker era. I got a 16% mortgage on a $70,000 average house in 1980 with 20% down and a $31,000/year salary. Do the math Emptynester and share your observation, please.
I think about this a lot (being borderline ancient). Good to know I’m not alone.
I can remember having an adjustable-rate mortgage that went to 12.5%, for example.
H-Man, interest rates go up because the push can be handled, interest rates go down when there is no push. Right now interest rates have no idea whether to push or retreat.
I have to ask, though, what drove developed economies’ long rates down over the past decades?
Low inflation due to globalization and labor’s subjugation (related things, globalization being the subjugation of foreign workers).
Low volatility due to central bank management of markets (I think CBs are not as powerless as some think, albeit not as powerful as they like to think).
But at the heart of it, aren’t interest rates the intersection of demand (for capital) and supply (of capital)?
If the global economic and financial system continues to hoover up and accumulate wealth – which it seems very good at doing – and not spending it on other than profitable investments – which also seems plausible . . .
Then wouldn’t the future of rates depend in some part on the growth, or not, of profitable investments?
So if I’m optimistic, I see higher rates. If I’m pessimistic, I see lower rates.
(The above is not actual macro-analysis, just the musing of a befuddled micro-investor.)
H, you devoted a good deal of time to Edwards in 20-21, whose “End of an Ice Age” thesis was intriguing. Would it be useful to briefly revisit him sometime in light of your Great Immoderation, or has his moment – the inflection – already passed?
Too lazy to go read the archives, I thought I might plant a seed for the next slow news day.