Biggest Macro Threat? Depressed Elites, Self-Fulfilling Prophecies, and the Davos Echo Chamber….

Markets are down to start the year and we’ve got a whole range of fun, new macro worries.  China!  Oil!  Weak retail!  Aieeeee!  I think this will all turn out to be of concern, but not deadly.  6-12 months ago it was all Greece!  The Euro!  Aieeee!

Meanwhile employment keeps improving, gas prices get cheaper, and the most hated bull market ever probably keeps grinding on.  My lodestar has been the S&P 500 dividend yield, now paying well above 2%.  Better than a savings account or a T Bill.  Highly reliable.  And a pretty good sign things are still OK out there.  Not great, but OK.

What does worry me?  We could get a boardroom freak-out in 1H 2016.  “Everyone” comes back from Davos in a tizzy.  A crisis of confidence among the (increasingly disconnected) elite classes.  Even as confidence improves among the masses.  Companies start freezing plans and stepping back.   That creates a self-induced downturn until reality (hopefully) re-asserts itself and we all figure out that the economy remains sluggish-but-OK.

Lets hope that hard 1H16 numbers (earnings season, unemployment, etc…) are good enough to punch through perceptions.  Although the reality distortion field around the top 1% (and arguably the top 10%) is pretty strong and only getting stronger.  I worry the main messages punching through are increasingly sharp jabs at elite privilege.  Especially as the toughest jabs are coming from the Right (see Donald Trump & Ted Cruz).  Although Bernie Sanders is holding up his end pretty well.

Back from a much needed break in Argentina & Chile with decks cleared and engines chugging after a very eventful 2015.  And back to blogging.  I’d been wrestling with whether to focus the blog more, but have decided to let it remain pretty free-form.  If nothing else, it gives me license to go back to posting.  I am going to try and keep things shorter.  And they will probably remain ridden with typos.

PS:  I happily acknowledge I am another top 10%-er or greater.  But at least I know what I don’t know.  And I am willing to follow/believe the numbers on what happens “out there.”  And make time for the occasional field trip… 🙂

This entry was posted in Uncategorized. Bookmark the permalink.

Comments are closed.