Tags: 2022
Category: Business

2022 Week 25

Notes, thoughts and observations - Compiled weekly

Crypto bro working at McDonald's in the impressionist style

Crypto bro working at McDonald’s in the impressionist style (via Chamath Palihapitiya)



Gimme fuel, gimme fire Gimme that which I desire - Metallica

  • No slow down and consumer demand for fuel
    • Summer driving season is upon us
    • Two years of pent-up vacation demand
  • Diesel remains elevated
    • Ripple effect into transportation prices
    • Will continue to fuel inflation
  • Energy companies hesitant to invest in wells and infrastructure
  • THOUGHTS: November election may be an early indicator
    • Republican victories in mid-terms could mean a possible shift in the presidency
      • A republican administration may be more favorable to oil & gas, but no guarantee
    • Could see a second bull rally in energy sector if we avoid a recession


Inflation feels good at first, but the endgame is grim - Jens O. Parsson

  • Inflation numbers high again… we are shocked!!

    • If we intend to fight inflation with higher interest rates it will take time to work through the system

    • This time it’s different” not exactly, but our post-COVID habits have changed

      • OBSERVATION :: It’s always the same, but a little different. Something always changes
    • J. Powell raise target rates 75 basis points, between 1.50% - 1.75%

      • It was an aggressive move, but they are feeling the political pressure to “do something”
      • Wall Street already assumes there will be no “soft landing”
      • THOUGHT :: Might see a panic if we cross the psychological threshold of 2.25% - 2.50% (2019 high)
    • Demand is back to pre-COVID levels, but how we are spending has changed

    That the high inflation has been so persistent has been a surprise, certainly to me. But so too has been the ongoing pandemic – the vaccines that became available over a year ago didn’t bring an end to it. And the Russian invasion wasn’t even on the radar screen. - Mark Zandi

    demand gap


It’s a recession when your neighbor loses his job; it’s a depression when you lose yours. - Harry S Truman

  • Make no mistake, the Fed intends to fight inflation by tamping down on demand
    • There is an INCREASING high probability this will go too far and pitch us into a recession
    • Wall Street is already reacting and punishing the market
  • OPINION :: Be on the lookout for several things
    1. Decline in demand for gasoline, will signal a strong pull back in consumer spending
    2. Real estate listing price reductions
    3. Companies will reduce projected earnings / fail to meet earnings expectations