Well, haven’t the last two weeks been interesting? From Silvergate, Silicon Valley, and Signature Bank all failing (must be an “S” thing), throw in Credit Suisse across the pond getting nationalized (for all intents and purposes), then a run on select US regional banks, add in a dash of moral hazard (fully insuring all depositors above the FDIC limit of $250k) and a 1/4 point rise in interest rates and what has changed? Nothing.
What’s not to like? Blue Skies, Gentle Waves, A Beach 🙂 However, that was most certainly not, 2022. In fact, last year, except for Cash, every major asset class I can think of got hammered. No matter where you went, nothing worked.
“The legend lives on from the Chippewa on down of the big lake they call Gitchee Gumee…” so begins the eponymous ballad by Gordon Lightfoot about the Edmund Fitzgerald.
A recent article in the WSJ espouses the virtues and foibles of backward running. Great in concept, but difficult to pull off, once, let alone constantly. Kinda reminds me of the Federal Reserve and their attempt to execute their dual mandate (full employment and 2% inflation (unrestrained laughing).
Is this the year we transition from pandemic to endemic..? Let’s hope so, otherwise the fatigue all things Covid-19-related will trudge onward, unfortunately. In the interim, a quick look back at 2021 saw the Grand Slam in pursuing the asset class, Ether.
For anyone old enough to remember, let’s hope the boys are back in town. For anyone born after, say 1980, here is today’s history lesson: As Paul Volcker was choking out the ravages of inflation, beginning with 1979-1980, the Prime Rate (remember that) was 21.5%, it started an old fashioned, 4-decade decline on interest rates.
Wasn’t that a scintillating start to Q2? Just when you think you have the worst quarter in stock market history in your rear view mirror, another jolt of reality hits and it was no April Fools joke.
Given multiple prior posts and warnings about the incredulity of stock prices, assisted by central banks and their race to the bottom with low or below zero interest rates, mix in a deadly virus, (thanks China) add in collapsing commodity prices (primarily Oil) and what do you get? Uncertainty.
So we begin the Roaring 20’s. Question is, will this decade mimic it’s counterpart of a century ago? For the early part, I hope so, but definitely NOT the end, as 1929 wasn’t a very good year.
Happy New Year !!! Hard to believe we are closing in on the end of the decade (730 days and counting), but as 2018 emerges we are approaching the 20’s at warp speed, which begs the question: Will we see a repeat of the Roaring 20’s from a century ago? If we do, life will get most interesting indeed.
