• According to Morgan Stanley co-President Ted Pick, global markets are in the midst of a fundamental transition following a 15-year period characterized by low interest rates and inexpensive corporate debt.
• The shift from the economic conditions that followed the 2008 financial crisis to whatever comes next, he said last week at a finance conference in New York, will take “12, 18, 24 months.”
• A new business cycle will emerge from the ashes of this transition period, according to Pick.

According to Morgan Stanley co-President Ted Pick, global markets are in the midst of a fundamental transition following a roughly 15-year period marked by low interest rates and inexpensive corporate debt.

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According to Pick, who spoke this week at a banking conference in New York, the shift from the economic conditions that followed the 2008 financial crisis to whatever comes next will take “12, 18, 24 months.”

“It’s an extraordinary moment; we have our first pandemic in 100 years. We have our first invasion in Europe in 75 years. And we have our first inflation around the world in 40 years,” Pick said. “When you look at the combination, the intersection of the pandemic, of the war, of the inflation, it signals paradigm shift, the end of 15 years of financial repression and the next era to come.”

Wall Street’s top executives delivering grave warnings about the economy this week at financial conferences, headlined by JPMorgan Chase CEO Jamie Dimon, who stated a “hurricane is right out there, down the road, coming our way.” Goldman Sachs President John Waldron agreed, calling the overlapping “shocks to the system” unusual. Even the CEO of a regional bank, Bill Demchak, believes a recession is unavoidable.

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Pick, a three-decade Morgan Stanley veteran who runs the firm’s trading and banking group, provided historical context as well as his assessment of what the turbulent years ahead would look and feel like.

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