Tuesday, August 2, 2022

Are we in a recession?; Why I'm moderately bullish; Keep Sweet: Pray and Obey

By Whitney Tilson

1) There's a raging debate over whether we're in a recession. According to the traditional definition – two consecutive quarters of negative GDP growth – we are. But most economists use a broader, more subjective definition that incorporates a number of factors... and here, the picture is better. For example, as this article notes (Is the 2022H1 GDP Decline... Fake?), gross domestic income hasn't declined at all: The price-adjusted value of the goods and services produced in the United States was 0.6% lower in April-June 2022 compared to the seasonally-adjusted peak in October-December 2021. Real gross domestic product (GDP) has ostensibly been falling for two quarters in a row. But gross domestic income (GDI), which is published by the same government agency that compiles GDP, implies that the U.S. economy has been growing continuously since the end of 2021. This disconnect is unusual, although there are precedents, especially around downturns. But for now, it poses a serious puzzl

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About Whitney Tilson

Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to more than $200 million.

Tilson graduated magna cum laude from Harvard College with a bachelor's degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

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Whitney is one of the most connected investors I’ve met. He’s been able to tap into an infinitely deep and unique network of people to come up with great insights into ideas and develop them that other people just can’t do because they don’t have the kind of network he does.

—John Petry