The “Gretsky effect” is well known by hockey fans who saw it unfold -- whatever team, or line he moved to dramatically improved. Beyond creating room for others while being double-teamed, it was as though his DNA got all over everything, lifting skill levels, scoring touches, enthusiasm, revenues, and salaries. Other players mimicked his offbeat style, setting up behind the net to make precision passes. They even copied his odd habit of tucking in the corner of his jersey, imitated his uniform number, his stick and his goofy helmet. Oilers coach Glen Sather famously joked: “A fire hydrant could score 40 goals on his line.” (Something similar was later said of Sather’s coaching record, so that was awkward).
The Pareto Principle is difficult to fathom, though simple, and seemingly irrefutable. On the human level, it means there’s a few keeners who break through norms and excel, and then we reward them handsomely because we value their talents. Shakespeare, Beethoven, Gretsky, Henry Ford, Steve Jobs, Elon Musk all have something, which to the rest of us is so much alchemy. The iPhone just shows up at Best Buy, and we don’t know much else. It’s just shiny.
But there were always detractors. People actually hated Gretsky in his heyday, as they do other outliers today, This seems to be born of jealousy, not legitimate grievance. It’s that better we look up to them than pull them down. It puts a whole different spin on that “One Tin Soldier” song from the 70’s.
Friday Charts:
Share of variable rate mortgages: Assessing rate sensitivity of housing markets across developed countries through the (narrow) lens of variable-rate mortgages, “rising rates may affect the largest share of borrowers in Norway and Germany. Australia may be worth extra scrutiny because of a moderately high variable-rate share of mortgages and the recent decline in affordability. On the other hand, borrowers in the U.S., France, Canada and New Zealand should be least exposed to rising rates. Additionally for these markets, record rises in fixed rates may mean existing homeowners are less inclined to put homes on the market.”
This next chart tells you why we will probably need to gift a mortgage down payment to our kids and grandkids. US. GDP growth by generation. As the Washington Post says: “Millennials have experienced slower economic growth than any previous generation.” Well… okay… if you make us some grandchildren we’ll think about
Vexing volatility
This is indeed a unique period with peculiar challenges that are well outside the scope of a normal business cycle. Equity markets are having a tough time gauging the impact of these pressures and how long they will last. At the risk of coming off like a dentist recommending gum surgery, we look at what markets are facing and why we believe they can deliver worthwhile gains over the next 12 months.
Regional developments: Canada’s unemployment reaches record lows; High-yield corporate spreads widen on U.S. interest rate concerns; Expecting European earnings downgrades ahead; China lockdowns impact supply chain and exports
Full piece here: Global Insight Weekly
Have a great Weekend!
Mark