by Gary Alexander
November 29, 2022
This is my fifth and final Thanksgiving column for November 2022. (The other four are on our Navellier Growth Mail archives). Last week, I brought you five 2022 trends to be thankful for. They were all admittedly short-term for late 2022. Two of them (reduced forest fires and a smoother supply chain) were based on articles in the Friday, November 18 edition of the Wall Street Journal (front page and page A-3).
Ironically, in the same Journal edition (November 18, 2022, Bookshelf: “A Journey to Mount Doom”), the Journal reviewed a new book, “Megathreats,” by today’s reigning Dr. Doom, Dr. Nouriel Roubini, in which he recounts 10 long-term existential threats that are sure to kill growth if we don’t act fast.
For instance, Roubini asks, “Will a deadly pandemic finish us before the transition to machines is complete?” Or: “Will climate change destroy the planet before rational machines come to the rescue?”
Notice his over-reliance on “machines” to save us, but humans make (or program) those machines, so it is up to humans to save us. We may have pandemics, but it is humans that must concoct the best vaccines.
As a recovering Apocaholic (one who formerly wrote such warnings, or read them without a skeptic’s eye), I turn to books like “Triumph of the Optimists,” about the dramatic rise in global stock markets during the 20th Century. When almost everything that could go wrong actually did go wrong, stock markets around the world – even in war-torn Europe – averaged over 6% annual gains for a century. As several books have shown (I listed six of them on November 8), trends are turning up in most categories.
Taking up Roubini’s challenge, I will turn from short-term trends to longer-term Thanksgiving fodder.
#6 – Recessions, If Any, Are So Mild We Can’t Even Call Them Recessions Anymore
In the 19th Century, they were called “Panics,” but that sounded so scary that in 1930 President Hoover coined a new word “depression” (like a pothole in the road) to minimize the “momentary downturn.”
This year, we’ve seen a technical recession of two straight quarters of negative growth, but both quarters were down due to technical accounting entries that had little to do with an economic downturn. How can you have a recession when there is full employment (3.5% jobless rate) and over 10 million job openings going begging? And this quarter looks more robust, with the Atlanta Fed seeing 4.3% GDP growth in Q4.
This year, writes economist Ed Yardeni, “The most widely anticipated recession of all times didn’t happen in 2022. Maybe it won’t happen in 2023, either.” If it happened, or will happen, and nobody notices, is it really a recession? Consumers are clearly not in recession mode. They still have plenty of excess savings left over from their pandemic checks (with less driving and shopping for two years). Payroll employment is up 4.1 million, year-to-date through October, to a record high. Yardeni says going shopping “releases dopamine…. The pandemic seems to have led lots of folks to realize that life is short. Some seem to have concluded that the meaning of life is shopping, dining out, and traveling while you still can do so!”
Total industrial production through October is above pre-pandemic levels and indeed at all-time highs (the blue line in chart below, with 2012 = 100), which is far from consistent with recessionary levels.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
There are many other indicators pointing toward normal growth, but my point is that recessions in the last 40 years have been either mild (1990 or 2000), or sharp and mercifully brief (2008 and 2020). We haven’t seen anything like the prolonged nightmare of the 1930s, or the deep double-dip “stagflation” of 1979-82.
#7: Fossil Fuels Are Cleaner Than Ever – Especially in America
When I went to college in Pasadena, California, in 1963, I was not aware that there was a huge mountain range 10 miles to the north. The smog was so deep and choking that when Mount Wilson came into view, it was a “black swan” event for me. Since I left Pasadena in 1979, Southern California has added a net four million more people, but the air is much cleaner, and Mount Wilson is crystal clear on most days.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Business and science have worked together to clean our air, our water, our auto emissions, our industrial waste, and dozens of other pollutants common in the 1960s. Climate activists want to do away with all fossil fuels, not distinguishing between the cleaner fuels developed in America vs. the dirtier fuels still used elsewhere. In a disgusting reversion to the Dark Ages, our President has shuttered down domestic clean fuel sources and gone begging to dictatorships around the world to buy their far dirtier fossil fuels.
America has worked harder at cleaning up its act than any other nation this century, yet we are criticized for not signing the Paris Accord or not bending the knee to the group-think dictatorship of European true believers in wind and solar power. What would you rather have – less pollution and power, or no power?
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The European game plan has possessed the Biden Administration, but the mid-term elections may make a change in policy direction possible before hundreds freeze to death in a Texas-like (February 2021) cold snap in the northern tier. We need to return to a common-sense more balanced energy policy, in my view.
The war between rising prosperity and carbon emissions is a phony war. The Economist reported (November 16) that 33 countries have in recent years cut emissions while maintaining growth. In America, “emissions fell by 15% between 2007 and 2019 even as GDP per person rose by 23%.”
The green ideologues (as expressed by Transportation Secretary Pete Buttigieg and others) have stated that if fossil fuel prices rise, that is good, since it encourages more usage of renewable energy sources, but that is an elitist position, since electric cars and batteries are beyond the finances of 90% of families now, and there are also environmental threats and limitations to sun and wind for a world reliant on electricity.
Natural gas is a clean fossil fuel, and the U.S. turned into a net exporter of natural gas for the first time in October 2017 (see chart, below). That’s fortuitous, because costs of natural gas have soared in Europe.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
According to a November 16 New York Times report, “The price of a shipload of L.N.G., which might have sold for $20 million two years ago, soared to perhaps $200 million last summer, and is now about half that, with winter fast approaching,” in large part thanks to the U.S., as the Times said: “Now, around 40 tankers with chilled gas worth billions have been sitting off the coasts of Europe and Asia, anticipating that if they wait until the weather turns colder before unloading their fuel, they will be paid higher prices.”
As Ed Yardeni writes, “Europeans should give thanks to Americans for producing plenty of natural gas.”
#8: Wars Are Far Fewer Than Ever – And Limited
(But We Should Quit Funding Them Anyway)
As many books have pointed out lately, wars are far fewer and farther between and lighter on the death toll than in past centuries. Yes, it would be ideal to have no wars, but we are moving in the right direction.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Regrettably, most of our last 10 Presidents have funded or started massive overseas wars. We need to stop doing that. President George W. Bush launched wars in Iraq and Afghanistan. President Obama won the Nobel Peace Prize his first year in office, then he expanded those two Bush wars and doubled down with incursions into Libya and Syria. President Biden has thrown billions into Ukraine’s conflict. The nations of Europe have long relied on Uncle Sam’s dollars to protect their neighborhood. Ukraine is their fight.
#9-Securities Frauds Are Easier to Spot in the Post-Enron, Post-Madoff World
(But You Must Resist Being “Bought Off”)
Most of our readers are old enough to smell a rat in its variety of disguises. If an investment sounds “too good to be true,” then you’re right. It’s phony. We learned this lesson yet again last week – twice – with the exposure of FTX Securities, and the sentencing of Elizabeth Holmes, founder of Theranos, Inc.
After such frauds, there are widespread calls for more corporate disclosures and regulation, but Bernie Madoff and Enron were regulated and heavily scrutinized, yet they managed to get away with fraudulent behavior for years because they were part of the Establishment. In Bernie’s case, he was at the core of the regulatory cartel as head of NASDAQ, while the Enron management were chummy with President Bush.
In the current cases, FTX Securities and Theranos bought favor with current and past politicians with their promises of “new age riches.” FTX founder Sam Bankman-Fried, a kid in T-shirts and shorts, was called (by many on CNBC) as “the next J.P. Morgan.” What an insult to the House of Morgan! So, politicians were basically bought off, since this wild-haired kid donated $40 million to top politicians.
There are two better solutions – (1) our own instincts, and (2) investigative reporters. The Wall Street Journal has been out in front in several recent cases, exposing fraudulent behavior and raising questions, but don’t underestimate your own inner “B.S. detector.” Here in Market Mail, our own Ivan Martchev has long been warning us against trusting “lines of code” as having any inherent value beyond the “greater fool” theory – buying high and selling higher – which is the main siren song of cryptocurrencies.
It’s safer to trust private reporters and common sense than bought-off politicians or regulators these days.
#10-There’s a World Full of Truth and Beauty – and it’s Essentially Free
Let me close with something far more delicious and satisfying. I have hosted a weekly music program on radio for over 20 years – first at WWOZ in New Orleans in the 1980s, and now in my hometown in Washington State since 2008. My dual focus is Classical Music (the greatest music ever written) and Jazz and the Great American Songbook, America’s Classical Music. Some ask me, “What is the greatest era for music in our history?” My answer may surprise you: “Today is the greatest era for music and the arts.”
By that, I don’t mean the rap crap that dominates the Grammy awards, or the pablum on most pop radio stations, or the din that passes for modern classical music. I mean I can go to the Internet and fetch 10 versions of Mahler’s awesome 2nd or 5th or 9th symphonies, or any composition by Aaron Copland, or any classic film from the 1930s or 1940s, or any great jazz artist with hundreds of recordings by each. I can live-stream or download archives of my favorite radio programs (“Radio Deluxe” by John Pizzarelli, or “Sing, Sing, Sing” by Will Friedwald on KSDS San Diego, or WWOZ New Orleans, or dozens of others.)
In my high school days, I couldn’t find any Mahler records, and there were precious few jazz records in most stores. Video tape was not yet invented. Today’s embarrassment of riches is so great that the only limitation is my time, not the treasures in the cloud. The same is true of mankind’s greatest truths – I can access books on tape or on screen, or free classics. I’ve just finished audio books of some of Will Durant’s Civilization series, and a stirring bio of Dietrich Bonhoeffer by Eric Metaxas. I listen to books while watching The World Cup with the sound off. Hey, at 77, time has become the dearest commodity.
This is the best time to be alive. Cherish every moment. Happy Thanksgiving… every day.
All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
2022 Will Be Remembered for the Collapse of ESG…and FTX
Income Mail by Bryan Perry
The Global Tech Shift from China to India Is On
Growth Mail by Gary Alexander
Ten Trends to Be Thankful For (Part 2)
Global Mail by Ivan Martchev
Here Comes Another S&P 500 “Line in the Sand”
Sector Spotlight by Jason Bodner
The “End of Year” Rally Has Begun: Welcome to “Merry Time”
View Full Archive
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About The Author
Gary Alexander
SENIOR EDITOR
Gary Alexander has been Senior Writer at Navellier since 2009. He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks. For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.
Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s. He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division. Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander
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