Black Dots vs White Dots (Macro SWOT)

Jonathan Sacks, who was a religious leader and philosopher, often recounts one of his experiments called ‘the black dot’: ‘I used to put a black dot on a piece of white paper and ask an audience what do they see? And everyone in the audience said ‘a black dot.’ […] That black dot represents less than 1% of the paper; the 99% is the white paper. […] We are conditioned to notice the discrepant and take the rest for granted. So, we notice all the bad things that happen in the world, but we ignore all the good things.’

Here is a new edition of the SWOT framework introduced in 2022 and last published in November 2023. It is an attempt to make all the macroeconomic dots visible, appreciating that some economic actors must deal with bigger black dots than others on a microeconomic level.

(Table in word format with links below)

The 2023 macroeconomic SWOT cautioned against the appealing ‘regression to the mean’ theory and the mirage of normalization. Today, any anticipation of a return to normalcy has vanished.

Instead, the main questions are how different the future global economy will be, considering the inherent systemic inertia; and whether it could turn out to be a better one – down the road.

TABLE WITH LINKS:

Strengths (in approx. order of importance from high to low)	Weaknesses(in approx. order of importance from high to low)
Resilient global economic growth with a c.3% floor Germany's fiscal space Oil at $70 despite Middle East escalation Global corporate and bank cash pile at record level US tariffs: everyone is still negotiating India’s momentum (tax exemptions > tariff impact)	Contracting global manufacturing (May PMIs) Anxious US consumer (the largest global macro driver) Fully depleted excess US savings from the pandemic Persistently high LT real interest rates (US) Heavily constrained fiscal space in OECD countries Elevated global commodity prices (excluding oil) Confusing US economic policies China’s lasting economic malaise (deflation) Global debt at record level
Opportunities (in approx. order of importance from high to low)	Threats(in approx. order of importance, from high to low)
Short-term	Short-term
The beautiful US budget bill: growth driver Lower ECB rates enabled by disinflation in the EU Germany's expansionary fiscal policy Declining global commodity prices US reshoring (tax incentives) GenAI’s transformative power (e.g., robotics) Emergence of a sustainable sustainability concept Global power capex cycle Anti-institutionalism and zero-based budgeting M&A recovery allowing for portfolio optimization Socio-economic savings from obesity drugs New trade agreements (ex US) Europe’s mojo (longer working hours per year?)	The abominable US budget bill: cost of capital/π driver US industrial policy uncertainty (e.g., Section 899) Slowing global macro momentum into 2025 Tariff-related supply chain disruptions (e.g., rare earth) US inflation risk with tariff-induced price gouging China's export diversion to Europe (deflation) Nationalistic industrial policies: hurdle for global M&A GenAI pitfalls and societal costs (‘Mountainhead’ 2025) Social unrest (labor disruptions, demonstrations) Escalation in the Middle East De-dollarization (increased transaction costs) Loss of Federal Reserve independence Climate - physical risk
Longer term (2026+)	Longer term (2026+)
Ukraine resolution and Middle East stabilization Global South economic growth (beyond India) Apolitical integration of sustainability into capital allocation and the financial markets Supply abundance (genAI, renewable and nuclear energy, circular economy) and structural deflation	Supply crunch (labor, natres) and structural inflation Climate transition/physical risk (incl. water, nature) Covid crisis redux (this time with no fiscal cushion) Political polarization and challenges to the rule of law A world getting smaller through deglobalization Financial (debt) crisis