via opendemocracy:
The working assumption, for governments and central banks across the world, is that at some point soon everything will get back to ‘normal’ – our economies will return to either pre-pandemic or, sometimes, even pre-2008 crash levels.
These beliefs are reinforced by media economics commentary and across political parties.
But what if they’re wrong? The world’s largest asset manager, overseeing $10trn in assets across the globe, thinks we are, instead, entering a period of increased risk and uncertainty, defined by unavoidable recession and much higher inflation.
BlackRock – a well-connected, influential and hugely profitable pillar of global capitalism – made the predictions in its ‘2023 Global Investment Outlook’ report.
It states: “The Great Moderation, the four-decade period of largely stable activity and inflation, is behind us.”
Instead, BlackRock forecasts a new regime with a “brutal trade-off” – falling living standards for the many becoming profits for the few.
This reality, of a world undergoing fundamental transformations and disrupting our settled modes of existence, has so far barely entered the economic mainstream.
For BlackRock to break with this consensus might, potentially, be one of the first signs of a broader shift in how major institutions in the Western economies view the world.
Systemic chaos
Annual food inflation in the UK rose to 13.3% – an all-time high – last month, according to trade body the British Retail Consortium, ahead of the official government figures out later this month.
This situation – though slightly worse in the UK due to a flawed Brexit deal and the falling value of the pound (critical as a major food importer) – is common across the globe. Even as wholesale energy prices have dropped from their summer 2022 peak, the price of food everywhere is soaring. United Nations’ forecasts show a major risk of widespread famine in the Global South over the next year, with harvests continuing to underperform….
Powell will go down in history as having destroyed more wealth than all other Fed Chairs combined.
Few.
— Michael A. Gayed, CFA (@leadlagreport) January 9, 2023
The Fed delivered a message to the stock market, per MarketWatch: Big rallies will prolong pain.
— unusual_whales (@unusual_whales) January 9, 2023
After recording worst year since 2008, hedge funds now brace for a difficult 2023, per Investing . com
— unusual_whales (@unusual_whales) January 9, 2023
US equities could slump another 22% from current levels, per Morgan Stanley, $MS.
— unusual_whales (@unusual_whales) January 9, 2023
Earnings Estimates 📉 pic.twitter.com/gqoqRBQFN8
— Win Smart, CFA (@WinfieldSmart) January 9, 2023
Approx. 40% of German Companies expect output declines in 2023
Indonesia’s Finance Minister tells Bankers to be wary of Global Risks
Goldman Sachs to start cutting just over 3000 jobs midweek
In this chart you see that Pending Home Sales have absolutely collapsed.