Bypass Big Tech Censors
According to some of the world’s biggest bond managers from Fidelity International to Allianz Global Investors, the United States is heading for a “nasty” recession. They’re sticking to their forecasts for a downturn that is “inevitable” and advise hedging any bets on risk assets.
“Something akin to a credit crunch is what I’m most concerned about,” said Steve Ellis, global fixed-income chief investment officer at Fidelity International, which manages $663 billion of assets. Central banks’ continued tightening shows they’re “fighting last year’s battle,” he said according to a report by Fortune.
The damage from 10 straight interest rate increases has been done and the collapse of three U.S. lenders in March was just a taste of the bigger crisis to come as central banks stay hawkish until something else breaks. Just last week, Canada and Australia delivered surprise hikes, putting some pressure on the Federal Reserve to follow at an upcoming meeting as inflation remains persistently high.
Mike Riddell, a portfolio manager at Allianz Global Investors, said that stocks, bonds, and corporate debt are mispricing the risks. He added that only inflation-rate swaps have the economic outlook right. The so-called one-year forward inflation rate is currently at 2.4%, or close to 2% when risk compensation for investors is factored out. That implies a “nasty recession” within the next six months, he said. “Our base case is for a moderate-to-deep recession — and potentially crises — as the unprecedented pace of global policy tightening seen over the last year starts to really bite,” Riddell said. He recommends being bullishly positioned in rates and bearishly positioned in risk assets like credit.
The “inevitable” recession is taking far longer to show up than many thought at the start of the year. It’s possible the economy may keep defying expectations too, as situations such as nonfarm payrolls surpassed all estimates and surged in May, surprisingly.
Another issue is that Americans are quickly becoming overleveraged. Credit-card balances, which hit $986 billion in the fourth quarter of last year, remained largely unchanged in the first quarter for the first time in more than twenty years. Normally they post a dip as people pay off their debts from the holiday season, according to Forbes.
“Consumers are stretched, so I’m not 100% sure that a soft landing is really realistic at this point,” said Patrick McDonough, a portfolio manager at PGIM. “The downside is becoming more and more likely, just because we’ve been propped up by consumers for so long.”
Article cross-posted from SHTF Plan.
What Would You Do If Pharmacies Couldn’t Provide You With Crucial Medications or Antibiotics?
The medication supply chain from China and India is more fragile than ever since Covid. The US is not equipped to handle our pharmaceutical needs. We’ve already seen shortages with antibiotics and other medications in recent months and pharmaceutical challenges are becoming more frequent today.
Our partners at Jase Medical offer a simple solution for Americans to be prepared in case things go south. Their “Jase Case” gives Americans emergency antibiotics they can store away while their “Jase Daily” offers a wide array of prescription drugs to treat the ailments most common to Americans.
They do this through a process that embraces medical freedom. Their secure online form allows board-certified physicians to prescribe the needed drugs. They are then delivered directly to the customer from their pharmacy network. The physicians are available to answer treatment related questions.