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Perspective Commentary

Our Perspectives Commentary is published quarterly and provided to our clients. If you are interested in receiving a complimentary copy of our most recent piece, please fill out the information below.

Atop Mt. Washington

The annual road running race up the northeast’s highest mountain, Mt. Washington, flies the tagline: “it’s only one hill.”  This is hilarious, of course, because the run rises 4,650 vertical feet over 7.6 miles and offers a steep 22° grade.  This is yet one more example of eastern mountains – especially New Hampshire’s Whites – not getting their due.  Mt. Washington deserves special respect as the home of the world’s worst weather.  Seriously.  With our planet’s highest observed windspeed of 231 m.p.h. and an average snowfall of 42 feet, the mountaintop observatory – chock full of anemometers, barometers, rime-covered wind vanes and the like – is a meteorologist’s dream.

What had us thinking about the observatory atop Mt. Washington, aside from it being 45° cooler than the 90°+ outside our offices today, are the extreme readings coming from the economy and the financial markets.  What happened last year, with a near standstill of the economy, and this year on the back of unprecedented fiscal and monetary stimulus, create a huge discontinuity in all sorts of measures.  In some cases, the expression “off the charts” has been literally true.  Economists attribute these crazy readings to base effects – meaning the prior year base level, if aberrant owing to say, a global pandemic, renders year over year comparisons meaningless.  Hence, how to gauge a 225% increase in earnings for the S&P 500 for the first quarter, 2021 versus 2020?  Or how much should we worry about 5%+ inflation, year over year, given last year’s economic collapse?

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