A lot of people see black clouds not just on the export horizon, but almost covering the entire sky.
Peter Hall of Export Development Canada sees the same sky but views it as a positive outlook.
If all those clouds clear, it’ll be a bright, sunny sky.
“We are seeing export growth going forward,” said EDC’s chief economist in his spring export outlook on June 12.
His belief is that most of the problems bedevilling international trade will clear up and leave a good environment for economic growth going forward.
That might seem excessively optimistic to many people, even ridiculously so. In fact, some people told me that’s what they thought when they heard what he was saying.
But whether or not you share his opinion, it’s great to hear a cogently argued bullish case for the export outlook. Not only was it a well and coherently constructed argument, but it serves as a wonderful counter to the overwhelming bearishness that is typical now among many analysts.
Most are saying that global growth is slowing and will probably tumble into recession within a few months.
The bond curve has inverted; trade wars are worsening; job growth is rapidly slowing; war might be looming in the Persian Gulf: Those are just some of the problems most analysts see threatening the situation for exporters, who rely upon growing overseas demand.
Most analysts also believe the U.S. and western economies to be in the “late cycle” stage of the economic cycle, which also suggests a recession is just a couple of steps away.
Hall looks at that differently too.
The value of Hall’s bracingly divergent outlook is that it allows you to check your own assumptions and those of other analysts. Do his arguments add up? Have we been lazily accepting consensus opinion that isn’t actually unchallengeable?
We often make the biggest mistakes when we accept too many assumptions without even realizing we have done so. It’s worth stepping back and looking closely at our outlook to see where the flaws might lie.
One of my favourite financial podcasts, MacroVoices, regularly trots out contrarians to challenge prevailing wisdom, even when they have an opposite view of the market to the hosts. That’s a valuable service.
So, when you hear a view about the market that you disagree with, one that might appear ridiculous to you, don’t just dismiss it and move on. Think about it and why you don’t think it’s right. If your own view holds up, you’ll have thought it out better.
And it’s possible that you could realize that they might actually be right.