EDITOR'S NOTE: Alarm on the economy: Here are eight recession from eight icons of the industry including Michael Burry, Elon Musk, Mark Zuckerberg, and more. Read what they’re saying, assess their outlook, and compare it against the more “balanced” viewpoints that most mainstream financial media pundits are trying to sell you. Are we going from a bad situation to a better one, or are we heading from something worse toward the unthinkable? And if you believe the latter, what are you doing to brace yourself for the coming flood of severe economic pain ahead?
Michael Burry, Elon Musk, and Mark Zuckerberg raised the alarm on the US economy this week, as a toxic mixture of high inflation, surging interest rates and slumping global growth threaten to cause a recession.
Andy Jassy, Larry Fink, and Leon Cooperman also contributed to the cacophony of dire forecasts from CEOs, investors, analysts, and academics.
Several of these experts blame the Federal Reserve, which has rapidly raised interest rates to curb soaring prices this year, leaving consumers facing both higher living expenses and borrowing costs. They've also pointed to slowing growth and ongoing lockdowns in China, as well as continued disruptions stemming from Russia's war with Ukraine.
Here are 8 recent warnings, lightly edited for length and clarity:
"What strategy will pull us out of this real recession? What forces could pull us so? There are none. So we are really looking at an extended multi-year recession."
"Fed needs to cut interest rates immediately. They are massively amplifying the probability of a severe recession."
"We thought that the economy and the business were going to go in a certain direction, and obviously it hasn't turned out that way. We've had to pull back. Our operational focus over the next few years is going to be on efficiency and discipline and rigor, and just operating in a much tighter environment."
"This time last year, it looked like we were coming out of the pandemic. Then Omicron happened, and the war in Ukraine happened, and the inflationary environment that we're in happened, and now a very uncertain economy. This next year or two, the economy is going to test the long-term resolve of a lot of companies."
"We're just not going to have an economy that is based on a real growth. We're going to enter a period of more what I would call malaise."
"My recession thesis is the basic belief that we've borrowed from the future and we're going into a period of time where that borrowing has to be given back." (Cooperman said recessions typically last around a year, but the next one could persist for longer for that.)
"The Fed is obviously concerned that inflation is going to stay elevated for longer and so they're not taking any prisoners. What's going to end up in jail is the economy, which is going to have a very rough ride in the next 12 months."
"We're going to have a recession of some sort. Whether it's mild, medium, or hot, no asset class is fully priced for it."
"We're headed towards a much slower economy next year. Our best guess is that we're going to be in a period of stagflation for several months through maybe most of next year."