Happy New Year!! 2021 was a blur and there were many lessons learned. This blog seeks to highlight some learning lessons with an outlook to our humble opinions as to what’s in store for 2022
COVID Lessons Learned:
Cabin Fever and Violence – looking at police reports and after discussion with the Chief of Police, there is a direct correlation with shootings and domestic disturbance. What makes the newspapers are the high profile shootings in public areas; however, the true numbers show frustrations that come from being quarantined for period of time.
Jobs are available – we are seeing record low unemployment yet staffing for the service industry is lacking. Why? Many have determined that they do not want to work anymore. In the Baby Boomer generation, we are seeing early retirement. In some low wage jobs; the government subsidies have given time to contemplate the future; and many don’t want to work in the same industry as they were before. Many have found that the delay in returning to the workforce has come with a huge increase in pay ($12/hour to $15/hour) which is a 25% increase in wages!! If this continues, the country will need to loosen immigration to find workers willing to do jobs that others no longer want to do. Question – for those not wanting to continue at their jobs, will they re-train for better jobs? Where will they work?
COVID is here to stay – how many variants will we continue to see? The work must go on with the likelihood of a new variant each year and we have no choice but to learn how to progress as an economy. Lockdowns can’t continue so we must learn to adopt and live with this in a productive manner in this “new normal”.
Random Outlook/Predictions to 2022:
Interest Rates Go Up – 10-year treasury approach 3.0%+ from today’s levels at 1.5%
We have Real v Transitory Inflation – commodity and wage inflation will be lasting for the foreseeable future. Easing of supply chain dynamics will help but not alleviate inflation that’s here.
Abundant Capital – even with interest rate increases, the world is flush with cash and will continue to pour money into the investment markets. Those sectors that do well in inflationary times (real estate) will fair well sector by sector.
Stock Market Volatility – with preponderance of cash, the market will be looking for the best places to find yield and it will be harder to achieve returns. Money managers will be in and out of investment themes as they seek to prove their worth to clients.
Buckhead will not leave Atlanta – crime is the issue at hand which is in need of leadership from the mayor. Smart money knows that if the largest tax revenue source leaves the city, that the city will not fair well and the balance of the region will follow suit with the financial turbulence of Atlanta. These "unity advocates" also know that repetitive crime comes from the inability of the Fulton Court system to effectively keep crime off the street regardless of the numbers of police we have. Buckhead’s independence would still have to process criminals through the Fulton County judicial system and that’s a key issue associated with crime in Atlanta.
Overall, the economic outlook is a positive as we have seen in years. What could hamper 2022 that could derail a rosy future would be:
Geo-Political Climate – there are some political wildcards that could throw a curve ball into the mix:
- Russia is testing the United Nations in Ukraine and if they move forward, it could be devastating to the world economy.
- China thinks it should own Taiwan which is the silicon chip center of the world. Tension will be high in the area after China finishes hosting the Olympics.
- North Korea – been too quiet for too long.
View Our Deal Profile of The Month!