Howard Marks Discusses Why Things Seem So Uncertain Today

Howard Marks recently conducted an interview with Outlook Business. Howard Marks discusses a recent comment he made about the world being more uncertain today than any time of his life.

In one of your recent letters to investors, you wrote, “The world seems more uncertain today than at any other time of my life.” What is it that we have to fear in a world where restaurants are full and cabs are hard to find?

The level of economic activity, anecdotal as you describe, is not an indication of health in the future. It is an indication of health in the present. The question is, what are the implications for the future? When you say restaurants are full and you can’t get a cab, there is no contravening the fact that the economy is doing well at the top. The problem is the people who are not in the upper strata; their incomes are flat to down, they are losing their overtime. The joblessness rate is up significantly and that excludes people who aren’t seeking jobs and are unemployed — their future is not good. The ratio of income from the top to bottom is higher than in the past, which itself is unhealthy.

Full interview here.