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Reviewing Our 2023 Economic Predictions
The game of predictions is a fickle and unfair one. When making these, I had already put my crystal ball away and didn't see the push notifications that ChatGPT was 60 days from history, or that Hamas would have one particular restless night's sleep. I also had no idea that a small Danish biotech company would release one of the most fascinating developments in the history of weight loss medications, fundamentally changing the landscape of both the obese and some actors trying to lose the last 8-10 pounds.
So 2023 was weird. But did our economic predictions for the year hold up despite the remarkable advancements? Let's check it out.
Evaluating Our 2023 Predictions
Prediction 1: The U.S Will Avoid a Recession in 2023
Nothing like starting on a strong note! As I mentioned in my overly depressing preamble, every economist, financial publication and racist uncle was declaring the end of the world in 2023. We were staring down the barrel of a recession, thanks to the malestrom of high inflation, waves of tech layoffs and rising home prices with stark increases in borrowing rates. Well...
We're still here! We made it, and I think that TIME picked the wrong person of the year. Move over, Taylor Swift; it's Jerome Powell's time to shine. In the steady raising of interest rates, the Fed pulled off the impossible: a Goldilocks economy. Inflation is falling, wages are rising, and unemployment is stubbornly holding under 4%. It's a remarkable feat that had one unintended side-effect we'll touch on in a moment. Even giant financial services companies, whose job it is is to make predictions like this, are cutting recession odds for 2024.
For this prediction, we'll give ourselves a "Nailed It."
Prediction 2: House Prices Won't Really Fall Much This Year
In the goldilocks economy, there was that one lingering thread I touched on earlier: home prices. With rising rates, rising costs and rising wages, the prices of homes have also jumped. Why? Inventory!
Existing homeowners (myself included) don't want to dump their refinanced 3.25% interest rates and turn them into 7.5% rates like the world's shittiest magician pulling part of a rabbit out of a hat. This has accidentally turned the U.S housing market into a ticking timebomb, and it's set to explode on new homebuyers that are getting Eiffle Towered by the combination of high interest rates and low inventory, so they're paying over the odds for less house. Yeesh.
This one also falls in the "Nailed It" bucket.
Prediction 3: The Best Performing Stock of 2023? Meta Platforms
So close! Little did I know that ChatGPT was going to explode 60 days after I wrote my original piece, sending Nvidia to the moon. Outside of Nvidia, however, this wasn't far off!
Meta's performance to date is around 160% - not so bad for a mega-cap name whose main platform, Facebook, has become the least trendy platform for Gen-Z. Meta reduced their overall spend by cutting jobs like everyone's favorite PM, as well as increasing revenue via their Reels ad placement, which drove historic growth in their ad serving business. They also slowed down on the spend in the Metaverse, and now the tuxedos seem kinda fucked up.
I'll give ourselves a "Almost" grade, like Joaquin Phoenix giving Maximus the sideways thumb.
Prediction 4: The "Patagonia Vest Layoffs" Will Continue Until 2H 2023
In what is the most boring prediction on this list, the "Patagonia Vest Layoffs" refer to those in Silicon Valley with year-round fuzzy vests, Allbirds adoringing their feet and Airpod Max's hanging on their ears like the world's shiniest, most comfortable peacock. These people tend to be remarkably well paid, including the aforementioned PM who is likely no longer very well paid.
These employees were laid off en masse this year, with Layoffs.fyi estimating that around 249,000 people have lost their jobs this year from 1,119 tech companies. Why? Because these companies found themselves high and dry during the pandemic when demand for the products exploded in an unprecedented way. Following the pandemic, demand fell, and these jobs became luxuries rather than necessities.
Well, this prediction called for layoffs to effectively end around July/August. That...has not happened. While the mass layoffs (and accompanying headlines) have quieted down, we are still seeing significant layoffs. Nokia cut 14,000 jobs in October. Qualcomm cut 1,300 people in October and the FAANG's haven't really stopped. Even Spotify, right in the middle of "Wrapped" season, announced they're laying off 17% of their workforce.
This prediction goes down as a solid "Lol Nope."
Prediction 5: Bob Iger Will Make A Big Acquisition
My longest, most read and most vitriolic articles on this site have to do with the uniquely American micro-economy that is Disney. The Walt Disney Company has had a fucking brutal two years, including a double-Bobicide in the corner office that has resulted in Bob Iger, legendary CEO that looks like everyone's uncle, to reignite his administration.
In his first go-around, Iger was the acquisition king, famously nabbing Marvel, Lucasfilm and Fox to expand the Disney catalog. In his return, we predicted last year that he would make another acquisition in order to save his floundering content machine.
Weirdly, the opposite has happened. I'm not going to include the purchase of the remainder of Hulu in this since they owned most of it anyway, but Iger has been pretty vocal about wanting to sell the linear business. He's been exploring sales of ESPN and ABC, two historical cash cows, that are now in secular decline as ad dollars flee from "The Bachelor" and head towards YouTube and TikTok. ESPN publicly jettisoned big contract stars like Max Kellerman, Jalen Rose and Stan Van Gundy, as well as pillars like Suzy Kolber, in order to polish up the books for a sale. That didn't stop Iger from his biggest acquisition of the year, however, as he grabbed Joe Buck and Troy Aikman away from Fox Sports to host their marquee "Monday Night Football" timeslot.
On this prediction, this one was a surprising "Lol Nope."
Conclusion
Alright, final scores:
Nailed It - 2
Almost - 1
Lol Nope - 2
Not terrible, but not awesome. 2024 should (hopefully) prove to be a better year for predictions until November when the world goes to shit. Check out the site next week for our 2024 predictions!
