Monday, February 25, 2019

Société Générale's Albert Edwards Is Worried

And not just the usual worries either.

"...most surprising was the pungent smell of skunk 
that pervaded the streets almost everywhere."
From FT Alphaville:
From Socgen's Albert Edwards this Friday:
I was shocked to see the latest data showing US pedestrian fatalities have soared some 25% since 2012! Very few stats surprise me, but this is one of them (see chart below, H/T to Nick Glydon at Redburn). But why has this happened?
One's instinct is to blame the spike in pedestrian deaths on mobile phones. But no, this turns out not to be the most compelling answer at all.

As Edwards discovers after consulting the annual Spotlight on Pedestrian Traffic Fatalitiesreport, a much more convincing explanation comes in the legalisation of recreational marijuana.
From the report (via Edwards):
The seven states (Alaska, Colorado, Maine, Massachusetts, Nevada, Oregon, Washington) and DC that legalised recreational use of marijuana between since 2012 reported a collective 16.4% yoy rise in pedestrian fatalities, whereas all other states reported a collective 5.8% yoy decrease in pedestrian fatalities.
Which, as Edwards sums up, implies the US may be gripped by an epidemic of stoned pedestrians stepping into traffic.

Edwards' personal experience of San Francisco last year supports the thesis. He says he was really quite shocked by the sheer quantities of men who were clearly off their heads on drugs and drink, and by the pungent smell of cannabis skunk almost everywhere.
But what does it all mean for society and the markets?...