The conference continues in Florida, where Craig Alexander from TD provided a concise overview of the global economy’s trajectory. Unlike Dr. Siegel, his view is not quite as rosy. While the salesman in him was trying hard to see the glass as half-full, the economist in Alexander and the data presented painted a more dismal and, in our opinion, more realistic view of what’s ahead.

While optimistic about a soft landing for China, recovery-generated growth in Japan, and solutions out of Europe, the significant caveat was established early on in the presentation during a macroeconomics 101 recap. The economy is cyclical. It grows, expands, develops imbalances, and is eventually triggered by one thing or another to correct or purge those imbalances. There is no question that we saw a textbook example of this imbalance development leading up to 2008. The REAL question is whether those imbalances were effectively purged. Looking at numbers for the housing market and deleveraging’s impact on money velocity, we’re inclined to agree with Alexander’s comparison of the U.S. “recovery” to Japan’s lost years. In fact, as Europe braces for collective loss due to accelerated deleveraging, we’re left wondering whether the GLOBAL economy won’t be giving their best impression of Japan.

We had the pleasure of sitting with Donald Smith, President of Provident Wealth Management, during the presentation. As we weighed Alexander’s more bearish perspective to Siegel’s, Smith put it best. Economic projections are difficult right now because the traditional approach of leaning on past data fails to take into account the paradigm shift that 2008 precipitated – and unless you can see into the future, that functionally means we’re all flying blind.

We don’t have a crystal ball, but here’s our take – if Japanese-style stagnation is about to be the new normal here in the US, we’d rather be in an asset class that doesn’t rely on economic growth to drive performance, and that, friends, is exactly what managed futures aim to do – perform regardless of economic environment or factors such as a rising stock market.