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Jack Janasiewicz offers his tactical take on the macroeconomic environment in this podcast recorded on September 7, 2023.
  • The bullwhip effect describes how changes in retail customer demand can cause progressively larger fluctuations in demand upstream, for wholesalers, distributors, manufacturers and raw material suppliers.
  • But while the bullwhip proved useful in analyzing market trends related to the pandemic, it may not be the best model to use today.
  • This time around, the bullwhip effect is happening in reverse, with ripples decreasing over time – more like an echo.
  • But the market seems to be settling on a bullwhip effect rather than an echo effect: extrapolating current trends into the future through increasing amplitudes rather than diminishing ones.
  • In fact, this re-acceleration may very well prove to be short-lived as the bullwhip distortions in the economy continue to fade.
  • The consensus missed or ignored the tailwinds taking shape for 2023, and in the wake of that growth reacceleration, the consensus now seems to be extrapolating that strength well into the future – a potential classic extrapolation overshoot.
  • While there are still some growth tailwinds in play through year-end, they are more likely to be shifting from a major growth impulse to a floor for growth as we flip the calendar to 2024.
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