Cathie Wood capitulates on the inflation narrative and finally offers her investors my fault explanation for a disastrous first half of 2022.
Unprecedented wealth destruction continues as the economy and financial markets meltdown in 2022.
Approximately 9 trillion US dollars in stocks, two trillion in cryptocurrencies, and a few more trillion in bonds have evaporated since 2022. Real estate could be the next shoe to drop.
“Unprecedented wealth destruction continues as the economy and financial markets meltdown in 2022”
WEALTH TRAINING COMPANY
Meanwhile, the central banker’s fantasy narrative is that the economy is just fine as household demand collapses to historic fifty-year lows and trillions of dollars of wealth slashed off pension funds. Frankly, with more rate hikes in the wind, the probability of a Great Depression 2 playing out could be a bang-on-the-money call.
We have never experienced bonds, stocks, and now commodities, real estate all heading south. There is even a currency crisis brewing as the other major currencies are near their all-time low against the king dollar.
In the crash of everything, there is nowhere to hide
So how long can the central banks stay on stage with a straight face pretending that there is nothing to see here and keep contracting?
If this hawkish monetary policy continues, expect the worst, another sovereign debt crisis in the EU, in other words, more ECB emergency meetings, another emerging debt crisis, rising Repo rates, and illiquid markets.
“in the crash of everything, there is nowhere to hide”
WEALTH TRAINING COMPANY
US consumers are saving less, as the savings rate falls to 4.4% lowest since 2008.
The Fed talks about being data dependent, so what data is Fed chair Powell looking at that makes him see everything rosy for the economy to take record rate hikes.
How much economic pain and wealth destruction are central banks willing to inflict to fight inflation until they capitulate and pivot?
“We were wrong on one thing, and that was inflation being as sustained as it has been” – Cathie Wood
Cathie Wood capitulates on inflation when the economy could have already reached peak inflation
Cathie Wood’s, “We now believe that our portfolios will deliver 20% compound return,” comment in November last year has left Ark investors red-faced with red all over their portfolios.
Cathie Wood’s Ark is no life raft. ARK Innovation ETF is near its 52-week low at 40 USD, down more than 60% from its all-time high.
With those returns, something has to give, so Cathie Wood capitulates on inflation. “We were wrong on one thing, and that was inflation being as sustained as it has been,” said Cathie Wood in a recent interview.
Nevertheless, Cathie Wood continued to defend her strategy of picking innovation stocks, even though her ARKK fund has been steamrollered so far in 2022.
But there is no battle-hardened talk coming from Cathie Wood. Here comes the female focus of dealing with adversity.
“The most important thing we need to do is stick to our knitting. The worst thing that could happen is style drift,” said Cathie Wood.
Get knitting winter coming?
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