My eyes immediately honed in on the US vs EU forecast for GDP growth for 2023 ... and the US falling behind the EU!!!
Consensus for 2023...
Great asset value stats ...
Demograpics & growth ...
I like this chart ... because it reminds us that the market struggles to worry about more than one thing at at time!
Also note that people in Spain are more worried about their jobs than covid ... which sounds odd given what we see elsewhere in the world but serves to remind that the labour market isn't universally tight across our region...
Musing on Mexico ...
I have always been and remain a huge fan of John Authers @ Bloomberg ... and I read his article today with interest ... I know nothing about Mexico but had been thinking for a while that it might be a partial beneficiary from US corps looking to bring production closer to home (near-shroing rather than re-shoring)... this article dives a little deeper ...
Update on recession risks ...
Volcker ...
The demographics over this period were extremely powerful - adding lots of momentum to GDP growth ... so getting on top of inflation required a positive real rate spread ... it took Paul Volcker to achieve that ... the prior Fed governors didn't get ahead of that dynamic because at the time the orthodox view was that the economy needed to run hot to maintain nearly full employment ... and because working age population was growing ... hot meant red hot ... that philosophy created imbalances that broke the Bretton Woods system and a 20% deval of the USD poured petrol on the flames ...
Revelation ... who would have guessed...??
Worth remembering that earnings lag ... there is a big difference between a soft landing and a hard-one...
As tightenings go ... this is a tight one ...
