The US economy will go through a rough one-to-two-year period of recession/retooling starting mid-2022, but because consumers are not over-leveraged the economy should come out okay afterward.
“It's going to be a rough year or two. Uh hang on. It will be a rough year or two, but the consumers are pretty good shape.”
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Explanation
The U.S. economy went through a rough stretch of high inflation and aggressive Fed rate hikes in 2022-2023 but avoided a formally declared recession, with consumer balance sheets remaining relatively healthy, consistent with the prediction.
The current recession will last somewhere between 6 months (short case), 18 months (medium case), or 2+ years (long case), with roughly equal (one-third each) probability across the three scenarios.
“we basically we could say this could be a, you know, short, medium, or long recession. Short would be 6 months, medium might be 18 months, and you know, long might be 2 years plus. And we just say, I don't know, say 1/3, 1/3, 1/3 probability”
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Explanation
No formal NBER-declared recession occurred in 2022-2023 at all, so none of the three specific short/medium/long duration scenarios cleanly played out, though the economy did experience an extended slowdown period broadly consistent with the 'medium' framing.
Rising floating-rate consumer debt (auto loans, buy-now-pay-later) combined with job losses could trigger a cascading consumer credit crisis over the next couple of quarters (into 2023).
“If we're going to have a recession, we're going to see job loss, you're going to see these um and by the way, these auto loan portfolios have like crazy outperformed over the last few years... You could see a bunch of these things start to create a bit of a cascading effect over the next couple quarters depending on how this all goes.”
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Explanation
While auto loan and BNPL delinquencies did rise somewhat through 2023, no cascading consumer credit crisis materialized; the labor market remained resilient and a broad credit crisis was avoided.
The All-In podcast besties will eventually launch a media company/venture beyond the podcast itself, even though no LLC agreement has yet been signed.
“But joking aside, I still think that uh it'll become inevitable.”
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Explanation
No dedicated All-In media company beyond the podcast and its live summit events has launched as of this check.
Market conditions and startup/asset valuations will revert back to pre-COVID (and possibly pre-zero-interest-rate-policy) norms, undoing the abnormal 2020-2022 liquidity-driven inflation in asset prices.
“the new normal is going to look like the old normal, meaning the pre-COVID normal. We had the the the abnormal period was this 2-year COVID period where 10 trillion liquidity is pumped into the system. Things are going back to what they looked like before all that happened, and maybe before the Fed started with this zero-interest-rate policy.”
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Explanation
The Federal Reserve raised rates back to levels not seen since before the zero-interest-rate era, and by 2024 inflation had cooled substantially, broadly consistent with a reversion away from the abnormal 2020-2022 liquidity-driven conditions.