It is a regular ritual for major US businesses: the end-of-the-quarter conference call in which the CEO dissects what just happened and gives us some insight on what to expect for the future of the company. My good friend Rich Yamarone, the chief economist at Bloomberg, is the creator of the Bloomberg Orange Book, a compilation of macroeconomic anecdotes gleaned from the comments CEOs and CFOs make on their quarterly earnings conference calls. He not only sits and listens to them present their views, he also picks up the phone and talks to them. He is very clued in on what's happening in the real world of business.
In New York last week, at our dinner with a table full of economist types (including Art Cashin, Dan Greenhaus, and Ed Yardeni), Rich voiced his concerns about what he had been hearing. He let his inner Darth Vader out and ponderously informed us that we might soon be in a recession. The point was vigorously debated by Greenhaus and Yardeni, but Yamarone held his ground. So, for today's Outside the Box, I asked Rich to summarize what he is hearing on the conference calls and tie it into his read on the economy. I am pleased that the resulting piece is delivered in his usual entertaining style, with lots of red meat. I think Lord Vader outdid himself.
I write this note from 35,000 feet, flying to Seattle, and there has been a LOT of white on the ground since I left home. Dallas is just today getting back to normal from a storm that left us with two inches of ice; and we were better off than 50 miles further north, where they had a four-inch mantle of slippery ice to contend with. Snow is so much easier.
I am off to Geneva tomorrow after a quick stop in Dallas to swap suitcases. That is a lot of uninterrupted reading and writing time, which I really need. Even worse than the ice, there has been a blizzard of email lately, and my inbox is overflowing worse than ever. I have always tried to enter the new year with an (almost) empty inbox, but this year keeping that resolution will be a challenge. If I owe you an email, hang in there; I'm working on it.
While I'm away, they are going to redo the office in the new apartment. Seems my contractor and my niece/architect/designer are not happy with the results, so someone has to start all over. And the glass doors keep getting cut wrong; but maybe by the time I get back I'll see more of the finished product rather than continuing to live in a construction zone. Door handles would also be nice touch. Seems the hardware has been on back order for quite some time.
But in general I am spectacularly satisfied. Given the significant explosion from whatever was the initial budget, it is good that I am pleased. One thing I am actually quite amazed by is the quality of the new TVs. In spite of harassment from my kids, I had not gotten around to updating the TVs for about seven years, and the technology has made some great leaps since 2006. Watching movies on the latest Samsungs and the Sony 4K is a revelation. It is almost like being in the room with the actors, as if it were live theater seen on a stage. I caught a few moments of Apollo 13 with Tom Hanks and was simply blown away by the clarity. Apollo 13 featured some cutaways to 1970 tube TVs with their grainy pictures, and the contrast was almost jarring, though it brought back memories of what I thought was cool tech in 1970. I had not understood the hype until now. I guess TV was not one of my priorities, so the new stuff just came upon me all at once. But the kids are ecstatic about the new media room, so I guess that means I will get to see more of them.
There is just so much change happening everywhere, it is hard to keep up. But I try, as I know you do. Have a great week.
Your just trying to get through one email at a time analyst,
John Mauldin, Editor
Outside the Box
By Rich Yamarone, Chief Economist, Bloomberg
What's the Forecast? Economically speaking, existing conditions are cloudy with a chance of a storm. According to the latest entries in the Bloomberg Orange Book, we should expect to see more of the same – that is, sub-par economic activity with a propensity toward a downturn.
The economic data are poor given that the economy is 54 months into the expansion – the post-WWII…