THE WHITEWATER ECONOMY: What to Expect in the Rest of 2022
TUNNEL VISION (SENTIMENT)
THE US
CHINA
JAPAN
GERMANY
THE UK
THE MONTHS TO COME
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“You pay a very high price for a cheery consensus.
It won’t be the economy that will do in investors; it will be the investors themselves.
Uncertainty is actually the friend of the buyer of long-term values.”
– Warren Buffet
“The joke was thinking you were ever really in charge of your life.
You pressed your oar down into the water to direct the canoe, but it was the current that shot you through the rapids. You just hung on and hoped not to hit a rock or a whirlpool.”
– Scott Turow
In the second quarter of 2022, Berkshire Hathaway reported a $53 billion unrealized decline in the value of its holdings. So far in Q3, many of the same holdings have rebounded significantly.
Welcome to the year of investing hell.
For those of us tracking markets and the flow of money, the year has provided an absolutely wild ride – as all rapids do – as volatility has skyrocketed. Earlier this year, I wrote that three factors would define the fate of the global economy in the coming months: ongoing inflation, new coronavirus variants, and the invasion of Ukraine.
While all that was, of course, true, there has been so much more to take into account this year. With geopolitical instability in the Taiwan Strait, an emerging monkeypox (and polio and Lanya virus and . . . wait, what’s happening here?) pandemic, the ongoing effects of the climate crisis, and more, we have our work cut out for us if we want to understand what will affect markets in the rest of 2022.
And yet, understand it we must. If I were lazier, I would just write up something about how 2022 was the “year of uncertainty” and fill it with platitudes about how SNS readers can trust us to tell them what we don’t know. Then I could hang up my hat for the week and go out to dinner, like most folks who cover finance. If you look at the analysts’ predictions circulating in the news cycle right now, you’re likely thinking that we’re either going to see a massive bull run or a deep and severe recession.
But that’s not why we’re all here.
Rather, this week we will dive into the myriad ripple effects of the above-mentioned crises, including why analysts’ opinions are so disparate. Hopefully, this week’s letter will give you a better sense of what is right and wrong in the global economy and what it means going forward, for both your business and your dollars / yen / euros.
