Something Good for the Month
July 2023
Read. Reflect. Re-energize.
ECRI | Business Cycles and Growth Rate Cycles Explained
“With so much debate about hard landings and soft landings, recessions and slowdowns, it helps to clarify what those terms really mean. Part of the issue is that many who debate such matters are unclear about the basics. Economic cycles are part and parcel of the way market-oriented economies function. This is why recessions and recoveries—which constitute business cycles—are features, not bugs, in market-oriented economies. Alternating periods of expansions and contractions define classical business cycles. Yet, perhaps even more important to the markets are the alternating speedups and slowdowns that make up growth rate cycles.”
Oaktree Capital | Taking The Temperature
In preparation for Howard Mark’s interview for “Lunch with the FT” last fall, Howard sent the reporter, Harriet Agnew, five memos he had written between 2000 and 2020 that contained market calls. How were they chosen? First, Howard felt the memos accurately conveyed his thinking at the key turning points in that 20-year period. And second, Howard’s calls turned out to be right.
Wealthion | Lacy Hunt: Brace For a Credit Crunch + a “Serious” Recession
For a good while now, experts, including many of those appearing on the Wealthion channel, have been warning about the “lag effect” of the aggressive interest rate hikes and quantitative tightening program conducted by the Federal Reserve and other major world central banks over the past year. These experts have cautioned the speed & severity of these cooling measures would cause a sharp economic slowdown that could easily result in recession, deflation & a material correction in the financial markets. But here mid-year in 2023, the economy is chugging along at 2%+ GDP growth, inflation remains at 3% and the S&P is up 18% YTD and the NASDAQ up a whopping 35%. So where is the slowdown? Were those predicting one wrong? They weren’t wrong, says Dr. Lacy Hunt. Perhaps just a little early. But a credit crunch is now at hand that will indeed start freezing up the gears of the US economy. This is part one of a two part interview with legendary economist and bond portfolio manager Dr Lacy Hunt.
Wealthion | Lacy Hunt: We’re Facing a Perfect Storm of ‘Economic Deterioration’
In the second part of a two part interview with legendary economist and bond portfolio manager Dr Lacy Hunt, Lacy details out why a credit crunch is likely in process of arriving. Real bank lending has been in contraction at historically-aberrant extremes. Lacy sees a “serious” recession as all but inevitable at this point. Dr Hunt also shared his current outlook for US Treasury bonds.
Zoltan Poszar on the Global Financial System’s “Monetary Divorce” From Dollar Hegemony
“For the past decade, Zoltan Poszar has arguably been the world’s foremost expert in the ugly nuances and arcanery in world money-markets (and more recently, on how the financial and physical markets overlap on the geopolitical chessboard). However, amid all the chaos at Credit Suisse, the erstwhile expert on all things ‘pipes’ in the global funding markets has decided to go out on his own.”
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