L'inflazione 2022? Non è importante

Fatto inimmaginabile solo pochi mesi fa, l’inflazione è diventata il solo ed unico tema di mercato dell’ultimo trimestre 2021.

Un mutamento di scenario improvviso, ed inaspettato per molti. Non per tutti.

Chi segue Recce’d con maggiore attenzione ricorderà che noi mettemmo lettori ed investitori in guardia già nel primo trimestre 2021, scrivendo in modo molto esplicito che la narrativa della “inflazione transitoria” era falsa, che si trattava una menzogna detta sapendo di mentire, allo scopo di raggiungere scopi politici ed illudere il pubblico.

Proprio come accadde per il COVID, quando nel giugno del 2020 si disse che “tra sei mesi sarà tutto come prima”.

Tornando all’inflazione, questo argomento ha danneggiato la credibilità di figure molto note, molto in vista, e dotate di una robusta reputazione: dai vertici delle Banche Centrali ai Premi Nobel (nell’immagine che segue l’autocritica tardiva e reticente di Paul Krugman, uno degli ultimi ad arrendersi alla realtà dei fatti)

Chi segue Recce’d con maggiore attenzione ricorderà però che mai, nel corso del 2021, noi abbiamo attribuito al tema “inflazione” una grande importanza, per ciò che riguarda i rendimenti attesi dai diversi asset finanziari, oppure per ciò che riguarda i rischi impliciti nelle diverse forme di investimento, e neppure per la gestione dei nostri portafogli modello.

La cosa diventa ancora più significativa oggi, all’inizio del nuovo anno: perché da più parti si leggere che “l’inflazione è il rischio numero uno per i mercati finanziari e gli investitori” (immagine qui sotto).

Non è vero: l’inflazione oggi NON è il problema numero uno per i mercati finanziari e gli investitori. I problemi che verranno all’attenzione nel 2022 sono altri, e di diversa natura.

L’inflazione nel 2021 è stata importantissima, ma come avete visto NON per i mercati finanziari. I rendimenti delle obbligazioni NON hanno reagito, e Recce’d giudica questo un segnale molto forte.

E facilissimo anche da spiegare e da comprendere: sui mercati nessuno ha mai creduto a quel “boom economico” che il vostro private banker, il vostro wealth manager, il vostro promotore finanziario vi voleva vendere fino all’estate scorsa, pochi mesi fa; quel “boom economico” che non si è mai manifestato.

Si è manifestata invece con forza l’inflazione, a ricordare al Mondo che quelle politiche (di “stimolo”, le chiamano) NON funzionano. L’inflazione ha messo il sigillo su questa sentenza.

Ma in futuro l’inflazione si curerà da sola: mentre ALTRI problemi NON si risolveranno, e verranno sulla prima pagina del vostro quotidiano nel 2022.

Si tratta di problemi, ma pure di grandi opportunità per guadagnare, e tutti i nostri Clienti lo sanno bene, perché nei loro portafogli oggi hanno le posizioni che sono OTTIME per affrontare i mercati del 2022, e tutto quello che ci sarà intorno. Noi, insieme ai nostri Clienti, NON siamo mai andati a ricorrere il boom economico né abbiamo mai avuto paura dell’inflazione.

Se voi lettori che sapete “fare da soli” volete sapere quali sono i veri problemi che i mercati finanziari affronteranno nel 2022, continuate a seguirci attraverso il sito.

In questo Post, noi vi regaliamo una anticipazione: l’articolo che segue vi dice di che cosa si parlerà nel 2022 sui mercati finanziari. E vi dice chiaramente, come si legge in chiusura: bisogna guardare ai numeri dell’inflazione per quello che ci anticipano sul futuro della nostra vita sociale.

Non sarà di sicuro questo il solo tema di investimenti, perché quello che avete davanti ai vostri occhi è un autentico “cambiamento di regime” (come spiega benissimo l’articolo che segue qui sotto): ma di certo resterà tra i più importanti per tutto il 2022 ed anche negli anni successivi.

By John Authers

December 27, 2021, 7:00 AM EST

In 2021, inflation returned. After a year-long debate, nobody can any longer deny this. Next year, we will discover whether it’s here to stay and how much bitter economic medicine will be required to quell it.

On this vital issue, opinion is as divided as ever. Optimists still maintain that even if inflation has turned out to be more than a transitory blip, it will soon die down. Whether they’re right depends on the outcome of some of capitalism’s most profound conflicts.

A number of factors will indeed combine to push downwards on inflation next year. Used-car prices doubled and gasoline prices rose by 50% last year. That’s not going to happen again. Bottlenecks in global trade have already begun to loosen up a little. And there is ample room for central banks to tighten monetary policy; so far, there has been no attempt to reduce demand by raising the price of money or cutting back on its supply. 

It’s encouraging that the bond market expects inflation to barely exceed 2% five years from now and the Fed’s interest rates not to rise even that high. Consumer expectations aren’t much different. If they were to change and become entrenched, then inflation would be hard to dislodge. But for now, investors believe that price rises can and will be brought under control relatively painlessly. 

Still, permanently higher inflation remains a possibility. Whether it comes to pass will depend on two core questions that have long plagued capitalism: Will labor gain a greater share at the expense of capital? And, if so, will companies absorb higher wage costs or pass them on to  customers?

Labor vs. Capital

Since the 1980s, capitalism has evolved to keep inflation under control. The risk now is that capitalism has embarked on a regime change.

Labor’s share of GDP held stable at somewhat higher than 60% for the five decades after World War II. But it started to decline sharply after the dotcom bubble burst in 2000 and fell further after the financial crisis in 2008. As Ellen Zentner, chief economist at Morgan Stanley put it, the historically “unprecedented” plunge in the labor share of GDP “marks a break in the fundamental structure of the economy.”

Workers Had a Worse Deal After the Crisis of 2008

Labor compensation share of U.S. GDP at constant prices

Source: Federal Reserve Bank of St. Louis

The increasing powerlessness of unions has made it harder for workers to negotiate collectively. Demographic factors have similarly diminished their bargaining power. While the baby boom generation was at peak working age, labor supply was ample. Companies’ ability to outsource production to countries with lower wage bills, particularly China, further inhibited wages, as did the influx of migrants from Mexico. 

What was already a bad deal for the worst-paid became a terrible one in the years after the 2008 financial crisis, as companies made increasing use of part-time workers who had fewer benefits and could be dismissed cheaply. For several years under President Barack Obama, part-time workers’ wages lagged far behind those of full-time workers, and also behind inflation: 

This malaise led to populist anger and the ascent of President Donald Trump. In the last year, though, the pandemic appears to have turned the labor market on its head. Following virus-related shutdowns, job vacancies have surged to near-record levels as companies have tried and failed to fill low-paid jobs.

The low-skilled, under-educated and poorly paid have gained more negotiating power — and used it. Now, they are getting the best wage deals in a generation; their salaries are rising faster than for the well-paid and expensively educated. Wage growth for women and non-whites has overtaken that for men and whites. 

Unfortunately for them, another pattern has also reversed. The extra wages they’ve negotiated are nowhere near enough to cover fast-rising inflation. Data produced by the Federal Reserve Bank of Atlanta show a sharp decline in real wages.

That gives workers even more incentive to push for higher wages next year, which would be a crucial building block for embedded inflation. It was data like this that prompted Jerome Powell, head of the Federal Reserve, to say at the central bank’s last meeting of the year, “The labor market is by so many measures hotter than it ever ran in the last expansion.” 

Who Pays?

If capitalists are forced to pay their workers a greater share of their revenue, they have two alternatives. One is to take the hit themselves, leave prices unchanged and make do with a tighter profit margin. The other is to pass on the wage increases to consumers by raising prices, if they can.

Will they, and do they have the power to do so? As Morgan Stanley’s Zentner puts it, this is the “thread the needle” moment for the Federal Reserve, which aims to balance full employment with price stability. If companies decide to take the hit, accelerating wages need not spill over into rising price inflation.

Until the last decade or so, history provided clear guidance. Over time, profit margins have been an almost perfectly cyclical, mean-reverting phenomenon. Margins improve when times are good and decline during recessions, as companies elect to take some of the hit from the economic downturn themselves.

But something has changed since the financial crisis. Margins for S&P 500 companies rebounded swiftly after 2008, aided by the stagnation in wages. On the eve of the pandemic, margins had avoided a major fall for a decade and reached a record. 

Since the pandemic, margins have strayed even further from the traditional pattern, suffering a mild decline (thanks to sweeping layoffs early on) and now surging back to reach a level of profitability never before seen.

Exuberant Profits

Companies are making more money than ever after the last recession

Source: Bloomberg

At this point, however, companies have to recruit more people to raise production. And it looks as though they will be unable to do so unless they raise wages. 

Executives are assuring investors that they are confident in their pricing power and Wall Street projects that margins should rise further next year. This provokes complaints from politicians, who suggest that heavy industry concentration, thanks to the mergers and acquisitions of the last few decades, have left companies with the discretion to charge whatever prices they like. 

This argument, long the stuff of academic papers and Davos panels, will come to a head next year. In the last few decades, the balance of capitalism has tilted sharply in favor of capital. One effect of this has been to keep inflation under control. Now, after a once-in-a-generation pandemic has roiled labor markets, workers, particularly the lowest paid, appear to be regaining strength.

The story of inflation in 2022 will also be the story of whether the regime of capitalism is really changing and returning to an arguably healthier balance. We should be watching prices not just for their impact on the economy, but for what they’ll tell us about the future of our societies.