It was a privilege to recently speak with @LHSummers at the institutional #BlackRockFutureForum on a wide range of topics, and in addition to the highlights that follow, keep an eye out for summary sessions from the event on @blackrock’s The Bid podcast in August.
Prof. Summers argued that the proper paradigm for viewing the #economic #recovery is the tripartite series: 1) collapse, 2) sharp bounce back and 3) a long slog. Unfortunately, he thinks most of the bounce back has occurred already and we’re in for an economic slog now.
He continued by suggesting that the aftershocks to be most concerned with were: 1) continued deterioration of the #Covid situation in the U.S., 2) forthcoming problems in the loan and commercial #RealEstate sectors, and 3) possible #EmergingMarketsDebt crises.
We disagreed somewhat on the #economic prospects for #Europe, where I think the region is emerging from the #Covid health crisis in better shape than the U.S., starting #equity valuations are cheaper…
… and from a #policy standpoint, the willingness to functionally mutualize #debt through the #EurozoneRecoveryFund is a game changer for the region.
By contrast, @LHSummers argued that there was still a complex array of political considerations in #Europe that needed to play out (particularly in a post-Merkel world), #risk premia in the region were inadequate…
…and the U.S.’s #financial institutions are much stronger than those in #Europe, which all present risks to #investment in the region’s #markets.
As always, we’d like to thank the clients that joined in the Forum this year, and for those unable to attend, we hope the forthcoming summary Podcast will be useful!
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