Non-evergreen plants and trees became beautiful crystal statues as the bare branches were covered with almost 1/4” of ice. The light of the morning sun shining through the crystalized branches was an amazing display of color.
That was last week, and now temperatures are back into the high 60s, and the ice has all thawed. Branches that didn’t break have returned to almost their original height. The ice storm left a wake of significant damage to neighborhoods of fallen trees. A cacophony of activity has ensued of people with chainsaws cutting up trees and hauling the branches to landfills.
During these past three years, our country has also experienced multiple once-in-100-year events. The coronavirus outbreak in 2020 was reminiscent of the 1918 Spanish flu, with similar subsequent events, including forced business closures and stay-at-home mandates. The artic weather in 2021 limited production at manufacturer plants, combined with the previous year’s force closures, resulting in unprecedented supply chain disruptions. The lack of supply and trillions of government money distributed into the economy produced hyperinflation not seen since the 1970s. The federal reserve hastily responded to slow inflation with six consecutive interest rate hikes in 2022 and another 0.25% rate hike last week. The result of mortgage rates soaring in 2022 from a low 3% fixed rate to over 8% shut down residential home sales with fewer sale transactions in 20 years and a 90% reduction of refinance loans. The credit market for commercial properties has dramatically reduced their loan originations, and many private equity lenders have limited financial resources due to a combination of 2022 stock portfolio margin calls and loan defaults.
Understandably, the past three years have created unusual volatility in almost every business sector. A friend who owns a regional construction company is worried about the future and asked me how much worse can it get? A reasonable question.