Hardest landing is GUARANTEED.

Inflation: Former Philly Fed President Reveals the โ€˜Big Mistakeโ€™ That Led to the Current Crisis

“Monetary and fiscal policy have been extraordinarily aggressive in this episode and theyโ€™re the ones to look to as to what went wrong during this and to why the inflation has persisted as it seems to be,” he said.

A โ€˜Global Depressionโ€™ and More Rate Hikes: Here Are the Talking Points From Day Three at Davos

CNBC’s Silvia Amaro reviews Wednesday’s four biggest stories from the World Economic Forum’s annual meeting in Davos.

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The Real Estate Buying Frenzy Is Over: “The Buyers Just Stopped Buying”

“The buyers just stopped buying,” said Shauna Pendleton, an agent with Redfin in Boise, Idaho, until recently one of the hottest markets in the country. “Californication,” as she called it, drove an influx of buyers from the West coast, flush with cash courtesy of the also formerly booming stock market.

Sequoia Capital – “This is a Crucible Moment…Cheap capital is not coming to the rescue…Recovery will be long”

  • This is a “Crucible Moment”, adapt to the changing environment and invest equipped with information, don’t regret investments
  • This will be a longer recovery. Can’t say how long, but the tools to help a recovery have all been exhausted.
  • There is no cheap capital anymore. But smart companies will borrow or do equity raises even if on unfavorable terms to survive.
  • Related to the above, we don’t have a liquidity crisis, but expect liquidity to be tight going forward.
  • Capital was free for a couple years. Now capital is expensive. We are only now seeing the impact of how the increasing cost of money impacts the real economy.
  • At a high level, the market isn’t as challenged as it was in 2001 or 2008, but you need to look beyond the megacaps to get the full picture.
  • Growth at all costs is no longer being rewarded. The market is shifting to reward profitability. Investors are now focusing on near-term certainty. EV/revenue multiples and growth-adjusted multiples have all dropped dramatically.
  • The only way to stop inflation is to stop purchasing and shrink the economy.
  • They don’t say it in so many words, but they expect smart companies to have layoffs to become “nimble”.

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