We did a good job in anticipating this slowdown…

In early January, we posted to our blog that Q1/2022 that will show excess inventories. Companies materially over-ordered to replenish difficult to find parts and goods. We commented further that the next 3 months would see a classic inventory slowdown, a week later.

The data inside recent earnings reports from companies later supported our reasoning. Bed, Bath & Beyond (reported earnings on 4/13) and Amazon (reported today) were both weaker than expected for example.

Clients who followed our advice to borrow in the Fall and or in January were ecstatic with their loan’s yields and terms. Some, who were new to our “Funding and Ideas” approach decided to wait.

Our company provides guidance on when and how to borrow, and also from which funder.

This includes explaining each bank’s expectations for a specific economic environment. We also direct preferred customers to the banks that want them, so they get the best terms.

We then share our knowledge on when to speed-up plans to borrow, and when to considering waiting. We started discussing speeding up planned borrowing in November for example.

Today’s GDP report had one positive highlight: Manufacturing. Onshoring (or the return of building things back to the US) is in full swing. You can see it in the trucking data. But the trucking data also shows the “COVID Economy” growth has concluded.

A new economic cycle is heating up. We’ll talk about it tomorrow.

Note: it doesn’t include housing, furniture or toilet paper shortages.


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Image courtesy of Bloomberg LP at U.S. Economy 2022 Contracted in First Quarter on Surge in Trade Gap – Bloomberg
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