The View | Out with the coronavirus narrative, in with the inflation story for markets in 2022 – so says Santa

This year saw markets recovering from the shock of Covid-19 fuelled by low interest rates and massive monetary stimulus. The virtuous circle can be counted on to turn vicious – eventually

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This year saw equities in major markets, such as the US and Europe, do extremely well. What will next year hold? Photo: AFP

Published: 9:15am, 17 Dec 2021

For the eighth year running, I contacted The Oracle of the Markets to see if he could give me some insight into investor prospects for 2022. I couldn’t find Santa in any of his usual watering holes, and he was pretty slow answering text messages. Then I remembered the old-school method of communication – and called him.

It turned out he was in quarantine at Penny’s Bay. “What happened?” I asked. “It seems that one of my junior elves tested positive over the weekend. Before I knew it, my cave was surrounded by police, and I was marched off as if I’d been arrested.”

I gave my commiserations but couldn’t wait to ask the key question: “What’s the food like?” “Pretty basic. They won’t give me my usual diet of Beef Leavehomesafe and Lamb Currie, and I’ve even had my favourite Jaime Dimon Green Pass whisky blocked at the gate. One of the elves had to tip it into an empty bottle of Booster orange juice!”

Santa has several billion followers on Instasleigh, so he can’t help mentioning the brands. “What’s worse is that I haven’t received a single care package of wine and gourmet food from Hong Kong Monetary Authority senior executives, unlike some senior bankers in quarantine,” he grumbled. “I’m far more popular than any banker, and I don’t have to declare them to the compliance department.”

Spotting a gap in his rant, I asked him about the markets, finding him in a mood to gloat. “Look at my predictions last year, I was bang on,” he started, then added, “Those who do not learn the lessons of history are doomed to repeat them.”

A trader works at the New York Stock Exchange on December 13. As investors are still concerned about rising prices due to inflation, the Dow Jones Industrial Average dropped 175 points in Monday morning trading. Photo: Getty Images/AFP

“What are you most proud of?” I asked. “I told you that 2021 was going to be the easiest year to forecast. We had all the good news narratives arrive at once: the Covid-19 recovery story, zero interest rates, massive injections of money into economies by the central banks, crazy bullish stories on bitcoin and GameStop. It’s irrational. What could possibly go wrong?”