Howard Marks Memo - The Winds of Change

• Millions of people have left jobs over the last year as part of the “Great Resignation”: 4.4 million in September alone.

That one is the fact that as technology and information play a bigger role in business and our lives, labor becomes less necessary

Before I move on, I want to spend a minute on exactly what Cathie Wood said: technology will prove deflationary, and its positive impact on productivity will contribute to a jump in GDP. But GDP is the product of the number of hours worked times labor productivity per hour. Thus, if technology produces a big increase in output per hour worked, GDP ... See more

I worry about where the workers no longer needed in manufacturing will find employment. For thosemwho look to government for solutions, the most likely answer is support payments designed to guarantee

We don’t hear much these days about the possibility of deflation, and it certainly seems unlikely to arise. We also don’t hear much about the deflationary impact of technology, but we shouldn’t dismiss the idea

it did in the past. And investments made on the assumptions that tomorrow will look like yesterday must be subject to vastly increased scrutiny.

• The unemployment rate is quite low, even as millions of jobs are unfilled. Per the October Institute for Supply Management report on services: “Labor is still an issue, as it’s hard to find and get people who want to work, especially in services, trucking and warehouse fulfillment.”

The optimists say, “some new need for labor always pops up” (as it did in manufacturing between 1920 and, say, 1970). But (a) you can’t see much sign of that in the tech-based industries that are on the rise – they’re just not labor-intensive – and (b) the workers that technological industries require are generally better educated than those cut ad... See more

The result is very harmful. It’s bad enough that some cable news stations and social media sites deliver only one side of the argument on many issues. But increasingly, they provide “alternative facts” that allow Americans to inhabit different realities. This leads to further polarization and to hostility toward those with whom one disagrees. It do... See more