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- Michael Burry and Elon Musk have flagged the risk of a severe US recession.
- Mark Zuckerberg, Andy Jassy, and Larry Fink have also bemoaned the grim economic backdrop.
- Experts have cited inflation, rising interest rates, and global growth headwinds as major concerns.
Michael Burry, Elon Musk, and Mark Zuckerberg have sounded the alarm on the US economy, as a toxic mixture of high inflation, surging interest rates and slumping global growth threaten to cause a recession.
Andy Jassy, Larry Fink, and Leon Cooperman also contributed to the cacophony of dire forecasts from CEOs, investors, analysts, and academics in the final weeks of 2022.
Several of these experts blame the Federal Reserve, which has rapidly raised interest rates to curb soaring prices this year, leaving consumers facing both higher living expenses and borrowing costs. They’ve also pointed to slowing growth and ongoing lockdowns in China, as well as continued disruptions stemming from Russia’s war with Ukraine.
Here are 8 warnings, lightly edited for length and clarity:
1. Michael Burry, “The Big Short” investor
“What strategy will pull us out of this real recession? What forces could pull us so? There are none. So we are really looking at an extended multi-year recession.”
2. Elon Musk, CEO of Tesla, Twitter, and SpaceX
“Fed needs to cut interest rates immediately. They are massively amplifying the probability of a severe recession.”
3. Mark Zuckerberg, CEO of Meta
“We thought that the economy and the business were going to go in a certain direction, and obviously it hasn’t turned out that way. We’ve had to pull back. Our operational focus over the next few years is going to be on efficiency and discipline and rigor, and just operating in a much tighter environment.”
“This time last year, it looked like we were coming out of the pandemic. Then Omicron happened, and the war in Ukraine happened, and the inflationary environment that we’re in happened, and now a very uncertain economy. This next year or two, the economy is going to test the long-term resolve of a lot of companies.”
5. Larry Fink, CEO of BlackRock
“We’re just not going to have an economy that is based on a real growth. We’re going to enter a period of more what I would call malaise.”
6. Leon Cooperman, CEO of Omega Advisors
“My recession thesis is the basic belief that we’ve borrowed from the future and we’re going into a period of time where that borrowing has to be given back.” (Cooperman said recessions typically last around a year, but the next one could persist for longer for that.)
7. David Rosenberg, founder of Rosenberg Research
“The Fed is obviously concerned that inflation is going to stay elevated for longer and so they’re not taking any prisoners. What’s going to end up in jail is the economy, which is going to have a very rough ride in the next 12 months.”
“We’re going to have a recession of some sort. Whether it’s mild, medium, or hot, no asset class is fully priced for it.”
8. Christopher Smart, chief global strategist at Barings
“We’re headed towards a much slower economy next year. Our best guess is that we’re going to be in a period of stagflation for several months through maybe most of next year.”
This content was originally published here.
