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New Normal

What Normal Could Look Like

The economy of the future will feature more consumer savings, and business balance sheet repair (more cash, more cost, lower profits, and deferred capital expenditures).  After an initial spike up likely starting in June and continuing into Q3, growth will be difficult.  Unemployment, after spiking to the mid-20% range, will come down slowly, remaining in double digits for 2020 and perhaps getting below 10% in 2022. Inflation Inflation is coming, …Read More

“Normal,” It’s Not What You Think!

Most readers remember the pre-recession days of 4% GDP growth, interest rates at levels where savers had return choices worth pursuing (e.g., the 10 year T-Note at 4%), and workers could count on annual real wage growth.  Today, many refer to this as “normal,” and there is a desire, if not a movement, to return the economy back to such a state. You can see this in the political arena.  …Read More

Dealing with the ‘New Normal’

In ’09 and ’10, when Mohammed El-Erian and Bill Gross both worked at PIMCO, they put forth a concept they called “the New Normal.” It postulated that the economy would grow at a much slower rate than it had in the past, and therefore market returns – both equity and fixed income – would be much lower than what we had experienced in the post-WWII era. Nice theory, many thought; …Read More