I have been surprised over the past few years, and I continue to be proficient in how the markets ignore the most political and economic events. Epidemiology, wars, prolonging the global trade system, and the rise of right -wing nationalism and left -wing nationality – nothing seems to be out of animal lives of investors.
Several reasons for this, from the profits of high companies to the promise of artificial intelligence, were granted to the so -called Taco Trade. But I would like to suggest another: the world is simply not settled on a new economic narration. Until this happens, we are likely to stay in a period of recession in the uncomfortable market.
Historically, political economies tend to identify them through great comprehensive accounts. In the eighteenth century, Mercantilism has made the road to Laissez-Faiire in the nineteenth century, which was ultimately created in the Kinzi, which in turn allows the Reagan Tishcher revolution and the neoliberal era.
But today there is no single narration about our place, or what comes after that. Instead, there are many competing things about globalization, inflation, capital markets, politics and technology. All this creates a kind of rashomon effect – the same data and events can be explained in contradictory ways by different participants in the market.
We know, for example, that the global trading system is in a state of flow. Since 2017, there has been less trade among geopolitical partners. The main economies are now an “island”, as Consulting Chern’s Consulting Company, with a focus on national self -sufficiency rather than global integration.
However, as one of the Asian participants told me at the CEO conference, which I attended two weeks ago, all this “happens on the spectrum.” If you are sitting in the Pacific Ocean, “there is more globalization than before and it is likely to be more.”
According to McKinsey’s latest report on Changing global tradeAmong the 50 largest commercial passages today, 16 will grow until a 10 percent increase in global tariffs and an increase of 60 percent on the tariffs to China and Russia. These are the new paths that link the economies arising from India to the Middle East together.
The Rashomon effect is also running at the company level as well. It is clear that the industry is greatly present. But the size is also important. Trade disorder caused by customs tariffs will be just the other back winds of major companies, as they can spread more resources than smaller to relieve harmful effects.
Many executives and supply chain experts recently spoke to say that there was a lot of improving the supply chain after birth in large companies, many of which will be able to store 80 percent or more of the inflation pressure associated with tariffs with increased efficiency.
Not so for other players. JPMorgan says Donald Trump’s tariff will cost 82 billion dollars in American intermediate companies, or 3 percent of their salary statements, which are likely to mean the most strict demobilization and margins. Meanwhile, economists are concerned that many small companies will simply turn.
If this happens – this is something regional federal reserve officials began to track – it will in turn have an inconsistent impact on employment and distribution of wealth in rural areas and smaller cities, which have fewer adult employers. This would exacerbate the effect of the geographical star in which urban areas work in large companies well, while small business owners and workers in the less populated areas do not do so.
This gap is part of what feeds the volatile policy of the United States and many other countries. In America now, both the right and leftist population grows. Those who are under pressure in the red America in America may vote, while young liberals who cannot buy rent in Big Apple support Zohran Mamdani, a democratic socialist may become the next New York mayor.
I suspect that this narration will be repeated in the 2028 presidential elections if the democrats ended with an economic popular choice as their candidate – which they fail in every reason to do in view of how the two centers failed, including Kamala Harris. But this dynamic opens the door for more uncertainty about the future of the United States.
Recently, the intended Deutsche Bank wiped, investors are almost equal to whether they believe in the future of the American exceptional. Forty -four percent were optimistic, believing that in the end, no other country could compete for growth and dynamism, despite recent events. But 49 percent believed that America’s position in the world would slowly erode over the coming years. He preferred seventy -eight percent to keep the euro in dollars during the next year, although the percentage was 50/50 over a period of five years.
As if all this was not uncertain enough, there is Amnesty International to consider it as well. Will production technology be enhanced, while maintaining profits and stock prices high? Will you replace a lot of jobs very quickly, which leads to high unemployment and more populist reaction? Firstly? What countries and companies will win? Can we even afford energy and water?
There is no clear answer to any of these issues. I have never seen the largest possible number of potential movement tankers at any time during my career. The fact that the markets do not reflect this yet does not mean that they will not do so.
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