Taps Coogan – January 10th, 2023

Darius Dale, Founder & CEO of 42 Macro, who was one of the few analysts who properly called the terrible year markets had in 2022 before it started, is back with MacroVoices to share his outlook for 2023.

The punchline of the wide ranging interview, which is full of great charts, is that Mr. Dale sees a worse-than-expected recession starting in the second half of 2023, one that has not been fully priced into markets. However, because he doesn’t see that recession commencing until the second half of the year, he sees space for a rally in the first half of the year.

Of course, he acknowledges that markets may just slide directly from weakness in the first half into even more weakness in the second half.

All in all, whereas Mr. Darius’s call for markets at the start of 2023 sounds pretty close to the consensus, he does discuss in detail what we believe to be the biggest challenge facing markets this year: the challenge of getting sufficient private liquidity to support sovereign debt markets at a time of QT and massive deficit spending.