Spare a thought for those still trapped in the lockdown tyranny of Teams and Zoom meetings. There is no escape yet from the pandemic mind-set. Remote screen working plus the daily doses of covid case numbers, hospitalisations, dashed travel plans, George gLee, Sam McConkey, vaccine cohort juggling and Stephen “Eliot” Donnelly can numb the most inquisitive of minds. Covid complacency is a real business risk now. The world is moving on and our team of pandemic and alco-warrior “Invincibles” need to transition to the “Invisibles”. The global economy is already transitioning and there’s one big story emerging which won’t be found on Teams…..
Believe it or not, people are really looking ahead. Furthermore, those eyes are seeing better days in the future. That’s the good bit. The less good news is that those better future days involve higher prices….so people are buying now as we cautioned previously in February’s “Great Expectations” article. The “I” you won’t find on a pandemic-forced Teams call is INFLATION. Take a look around and you will see plenty of interesting headlines. We will start with the biggest name yet to deliver a more cautionary tone about the implications of a super-charged global economic recovery:
• Yellen says rates may have to rise to prevent ‘overheating’ – Financial Times
• Lumber prices rocket as demand overwhelms supply – Forbes
• Bond ‘taper tantrum’ is bigger worry for fund managers than Covid-19 – Markets Insider
• Used car prices jump up to 29% on scarcity – Business Daily
• UK house prices increase at fastest rate since 2004 – The Guardian
• Euro zone factories surge to record high in April – The Irish Times
• Bloomberg’s spot agricultural index is at the highest level since 2013 – The Daily Shot
• Not enough ships in the world to meet consumer demand surge – South China Morning Post
We didn’t even detail the exorbitant rise of renovation costs in the Downing Street region but will leave the travails of Carrie Antoinette to the tabloids on this occasion. Back in the real world it is important to caution against “pandemic recovery” thinking. It is not just industries and raw materials returning to more normal activity and pricing levels. Possibly more significant are the latest results from the Four Horses of The Cookiepocalypse who were already enjoying a stellar pandemic.
Remember the promised demise of Facebook? Yeah, well check out their 48% growth in the last quarter. That’s revenues, not income. Then drool over Google’s 34% growth, Apple’s 53% ‘recovery’ and amazing Amazon. It is simply staggering that the lockdown economy’s delivery service of choice has just clocked a quarter with 44% sales growth. Whatever happened to the law of large numbers????
Pricing for a huge variety of goods and services is on a tear and one needs to pay attention. Janet Yellen is, and she’s the Treasury Secretary for the largest debt issuer on the planet.
