The white swan

Nassim Nicholas Taleb is famous for writing The Black Swan, but these days he’s warning of a white swan, a risk that rather than being rare is somewhat more probable—and in this case coming for America’s economy. Like an increasing number of economic observers, Taleb says the cause of this calamity-in-plain-sight is the federal budget deficit. He says it’s swelling by such an extent that it would take a miracle to duck the damage that’s on the way. And he’s not alone. Taleb joined former US Treasury Secretary Robert Rubin and BlackRock Vice Chairman Philipp Hildebrand in sounding the alarm over consequences stemming from exploding debt—let alone default—and what that could mean for the dollar’s global status. “So long as you have Congress keep extending the debt limit and doing deals because they’re afraid of the consequences of doing the right thing...eventually you’re going to have a debt spiral,” Taleb said. “And a debt spiral is like a death spiral.” —David E. Rovella

The International Monetary Fund raised its forecast for global growth this year on the expansion in the US and fiscal stimulus in China. The world economy will grow 3.1% this year, up from the 2.9% seen in October, the institution said Tuesday. Tighter central-bank policy to fight inflation and public-spending cuts in some countries are among the reasons why growth is expected to be slower than in the two decades before the pandemic, when it averaged 3.8%. Still, given the scale of the Covid-19 price shocks and the interest-rate hikes that followed, the IMF suggested things could have gone much worse. “The global economy continues to display remarkable resilience, and we are now in the final descent toward a soft landing with inflation declining steadily and growth holding up,” IMF Chief Economist Pierre-Olivier Gourinchas said. “But the pace of expansion remains on the slow side,” he added, “and there might be turbulence ahead.”

Russia, in a new push to expand its influence in Africa, is recruiting for an armed force to replace Wagner group mercenaries across the continent. Called the Africa Corps, which controversially shares the name of Adolf Hitler’s expeditionary force, the Kremlin’s aim is to enlist new recruits and former Wagner fighters to deploy to at least five Russia-friendly countries.

Some strategists over at JPMorgan are warning that the domination of US equity markets by the 10 biggest stocks is starting to invite comparisons to the dot-com bubble, raising the risk of a selloff. The share of the top ten stocks on the MSCI USA Index (including all of the so-called Magnificent Seven tech stocks) had risen to 29.3% by the end of December. That’s just moderately below the historical peak share of 33.2% back in June 2000. While parallels between the current environment and the speculative frenzy surrounding internet stocks are frequently dismissed, the JPMorgan strategists say the circumstances “are far more similar than one may think.”

US job openings rose in December to the highest level in three months while fewer Americans quit their jobs, arguably indicating workers are growing more cautious even as labor demand remains strong. Vacancies increased to 9 million from an upwardly revised 8.9 million reading in the prior month. The December figure exceeded all estimates in a Bloomberg survey of economists.

Still, lots of Americans are getting fired—especially in the tech sector. PayPal became the latest to slash its workforce, announcing a 9% cut that affects some 2,500 people. In a letter on Tuesday, Chief Executive Officer Alex Chriss said the decision was made to “right-size” the company through both direct terminations and the elimination of open roles throughout the year. At least four analysts downgraded PayPal stock this month, citing a range of concerns from rising competition to pressure on profitability.

And it’s not just tech firms jettisoning employees. Last summer, the Teamsters union won a landmark contract ending its standoff with United Parcel Service. On Tuesday, UPS cited labor costs as part of the reason it was eliminating 12,000 management-level jobs. The job cuts, about 14% of 85,000 full- and part-time managers, will save $1 billion this year and more in subsequent years, the company said.

It’s all part of a trend that began last year.Booming US economy? Slowing inflation? Consumer sentiment on the upswing? No amount of good economic news seems to be enough to stop America’s largest employers from engaging in mass terminations. In just the past few weeks, Alphabet, Amazon, Citigroup, Ebay, Macy’s, Microsoft, Shell, Sports Illustrated and Wayfair have all announced job eliminations. Now there are some similarities appearing pointing to just who is losing their job. These are the roles most in jeopardy.

Ever since its establishment as a gold rush town in the 1850s, Denver has been a city of transplants. In recent years, legions of work-from-anywhere types have heeded its mile-high call of the wild. These transplants—mostly millennials—have become the proxy architects of the city’s fast-evolving neighborhoods. Retail businesses and restaurants—almost always in prefabricated, low-rise glass buildings—seem designed for social media with a cheery, photo-friendly patina. Many are popular concepts brought in from their original hometowns, such as Brooklyn, New York, pizza icon Roberta’s and Austin, Texas, sushi stronghold Uchi. But if Denver feels at times like a generic catchall of Pan-American culture rather than its own distinct place, that’s in the process of changing. If you have only 48 hours, here’s what to do there.

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