The Year in Quotes
Reviewing the key themes from 2021 through key C-suite quotes
Note: The Transcript will take a short break. We will be back in Week 2 of 2022.
Succinct Summary: It’s almost hard to remember now, but at the start of 2021, most of us weren’t yet vaccinated and wouldn’t be for several more months. Vaccines became readily available around April and pent-up demand was unleashed upon the global economy. The euphoric response to the end of COVID lockdowns powered an incredible surge in the global economy. People wanted to get back to life as usual–to see friends, to go to restaurants and even large group events. And so we did. Thanks to vaccines and government stimulus consumers lived their best lives in 2021 until Delta and Omicron showed up.
Unprecedented demand and a hobbled supply chain created their own issues in 2021 though. The global economy saw inflation on a scale that we haven’t seen since the 1980s. Although the world’s primary inflation fighter, the Federal Reserve, saw the inflation as only “transitory,” by the end of the year it was clear that inflation was more severe than policymakers realized. Headed into 2022, the Fed began to strike a hawkish tone for the first time in a very long time.
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The world was on the brink of mass vaccination
“….we expect the federal program to open up shortly, and we are ready in our CVS Pharmacies to administer the vaccine. We have over 90,000 clinicians who are pharmacists, who are pharmacy techs, who are nurses and are nurse practitioners to be able to administer the vaccine. And we do expect that we can administer 20 million to 25 million vaccines per month once the federal program opens up.” – CVS Health (CVS) EVP, CVS Health & President, Aetna Business Unit Karen Lynch
And a huge amount of pent up demand was ready to be unleashed
“Although it will take time, customers want to travel again when they feel it’s safe. They feel they’ve had a year of their life taken from them, and they’re starting to get ready to reclaim.” – Delta Air Lines (DAL) CEO Ed Bastian
The economy remained strong despite COVID
“…the month of December was felt really good. It actually felt like kind of pre-COVID environment.” – Comerica (CMA) CEO Curtis C. Farmer
Inflation pressures were building
“I will tell you, I think the shipping costs are showing every indication of probably moving up as we get towards the end of the first quarter into the second quarter. And so I think there’s a pressure there.” – Fastenal (FAST) CEO Dan Florness
And a new President was inaugurated
“This is democracy’s day. A day of history and hope of renewal and resolve through a crucible for the ages. America has been tested anew and America has risen to the challenge. Today, we celebrate the triumph not of a candidate, but of a cause, the cause of democracy. The people, the will of the people, has been heard and the will of the people has been heeded. We’ve learned again that democracy is precious. Democracy is fragile. At this hour, my friends, democracy has prevailed” – US President Joe Biden
Gamestop went to the moon
“/r/wallstreetbets is a community for making money and being amused while doing it. Or, realistically, a place to come and upvote memes when your portfolio is down…Like 4chan found a Bloomberg terminal.” – Reddit r/wallstreetbets
Vaccines were rolling out and people were ready to have fun
“…we’ve seen just in the last 10 days an uptick again, and it’s right in line with the COVID numbers, sort of around the country, decreasing. It’s clear that people are ready to have fun. They are ready to travel, but they are still not quite sure if it’s time…In fact, for Superbowl, we’re going to be at almost 50% occupancy for the first time since October with over a thousand casino customers coming, which is significantly more than we had for New Year’s Eve. So, while there’s still a long way to go in Las Vegas, we can tell that as people become more and more – feeling more safe, they are ready to travel and they are ready to have fun.” – Wynn Resorts (WYNN) CEO Matt Maddox
Companies were seeing some inflation
“…we are seeing the same inflation. We’re also seeing the inflation that you’re seeing, and coming from non-commodities – non-key commodities, ingredients, especially packaging in transportation in the U.S. And we think that the level and the type of inflation that we are seeing, it’s manageable,” – Kraft Heinz (KHC) CFO Paulo Basilio
But policymakers downplayed the risk
“My predecessor has indicated that there’s a chance that this will cause inflation to rise. And that’s also a risk that we have to consider. I’ve spent many years studying inflation and worrying about inflation. And I can tell you we have the tools to deal with that risk if it materializes, but we face a huge economic challenge here and tremendous suffering in the country. ” – US Treasury Secretary Janet Yellen
Consumers were dreaming about a return to normal
“…in lots of surveying that we’re doing…over 80% of [our customers] say they’ve got to get back out on the road, which is the highest number…we’ve seen since this mess began.” – Hilton (HLT) CEO Chris Nassetta
Vaccines would be available to everyone by April
“…vaccinations were ultimately going to be the deciding factor. And the quicker we vaccinate where we get to the point of herd immunity, which by most accounts, that timeframe is in the July, August time. So sometime in summer, the experts believe that by the end of April, anyone who wants a vaccine…will have access to one that all bodes well.” – Norwegian Cruise Line (NCLH) CEO Frank Del Rio
And people were flush with cash
“The leisure customer has a humongous amount of money in the bank. There’s huge fiscal stimulus in the system and more coming, the Fed has been pumping capital into the market.” – Pebblebrook Hotel Trust (PEB) CEO Jon Bortz
By the beginning of March, the emergency was officially over
“If you just look at the pure numbers, what they’ve contracted for, they could vaccinate everyone in the US about 1.6 times right. And so that to me would indicate a pretty clear sign that the pandemic period, emergency pandemic period is over.” – Johnson & Johnson (JNJ) CFO Joe Wolk
And people began resuming normal lives
“…people are anxious to see family, they’re anxious to see their friends, they’re anxious to take a real vacation again. And we think that as the vaccination rates increase, as infection rates moderate, as borders and travel restrictions are eased, that we’ll see a pretty healthy resurgence in personal travel.” – Mastercard (MA) Chief Product Officer Craig Vosburg
Is this the start of the roaring 20s?
“I think the environment is very good. We are seeing a V-shaped recovery globally. GDP – we forecast GDP to be on a path of pre-COVID by pretty much the next quarter on a global basis, obviously, helped by Asia and the U.S. in particular. The vaccines are obviously on the way up, case counts on the way down. Our commodity policies continue. And, of course, I heard yesterday that, I think we’ve just stated, you said that we’re looking forward to starting back to roaring 20s. So there is definitely a psychology that is positive in terms of people want to come out and live a real life.” – Morgan Stanley (MS) Global Head-Investment Banking Franck Petitgas
Confidence was high
“I really believe we’re seeing the positive impact of the rapid rollout of the vaccine in the U.S. CEO confidence is very high as measured by the business roundtable. Many CEOs are getting the vaccine themselves and promoting it to their employees because they see it as key to getting fully back to work. Previously, many were targeting September 1 as a return to office day. And now we’re hearing more talk about early summer or even spring as the beginning of their first waves of returning.” – Steelcase (SCS) CEO Jim Keane
But supply chains were seeing challenges
“The supply chain is still catching up and trying to rebuild inventory levels in particular in the North American market…So some of those supply chain issues have been well-documented, in particular the semiconductor shortages…There are some other challenges, right? So there was a bout of severe weather in the southern US a few weeks ago. That has actually created a shortfall of chemical feedstocks. That’s also impacting the supply chain. There was a fire last week in Japan in a major semiconductor plant. So all of these are sort of impacting our customers. But in the end, it’s delaying the recovery, but the recovery is coming back.” – IHS Markit (INFO) EVP-Transportation Edouard Tavernier
People were ready to have fun
“We’re just continuing to do everything we can to create a safe environment and one that we know is going to be fun because it’s coming. The fun is coming…I think our best days are ahead of us in the not-so-distant future.” – Wynn (WYNN) Resorts CEO Matthew Maddox
Stimulus led to so. much. liquidity
“One of the things that I pointed out the savings rate doubled with the national average. We’ve got 15% — and households are holding 15% of GDP in cash. They’re either going to spend it, invest it or just let it lose value sitting in cash.” – The Bank of New York Mellon (BK) CEO Thomas Gibbons
The economic dam was bursting
“I think as you see the vaccine spread, this economic dam is really starting to burst and it’s going to be widespread in terms of an increase in activity and revenues across most businesses.” – The Blackstone Group (BX) COO Jon Gray
Companies were reporting substantial inflation
“We’re seeing substantial inflation. We’re raising prices, people are raising prices to us. And it’s being accepted. We really do a lot of housing. The costs are just up, up, up…It’s an economy – really, it’s red hot. And we weren’t expecting it” – Berkshire Hathaway (BRK) CEO Warren Bufettt
But it was not time to talk about tapering
“So, no, it is not time yet. We’ve said that we would let the public know when it is time to have that conversation. We’d said we do that well in advance of any actual decision to taper our asset purchases, and we will do so.” – US Federal Reserve Chair Jerome Powell
“Transitory” inflation would not be enough to spur a change of course
“With regard to interest rates, we continue to expect it will be appropriate to maintain the current zero to 1/4% target range for the federal funds rate until labor market conditions have reached levels consistent with the committee’s assessment of maximum employment, and inflation has risen to 2% and is on track to moderately exceed 2% for some time. I would note that a transitory rise in inflation above 2% this year would not meet this standard. In addition, we will continue to increase our holdings of treasury securities by at least $80 billion per month, and of agency mortgage-backed securities by at least $40 billion per month until substantial further progress has been made toward our maximum employment and price stability goals.” – US Federal Reserve Chair Jerome Powell
Party on
“Having said that the summer is going to be a free for all, you’ve seen the stats, 73% of Americans are planning a trip and the highest in history was 37. So it’s going to — America is going to party the summer like 19 — like it’s 1929.” – Starwood Property Trust (STWD) CEO Barry Sternlicht
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Consumers were euphoric
“…we continue to be conservative because between being cooped up, between being locked down, between the stimulus, between celebrating that we are - the country is still around, and we're still going to try to get back to normal, there's clearly some level of euphoria around that. It would be impossible for me to tell you what percent that is.” - Simon Property Group (SPG) CEO David Simon
The economy was booming
"…we are going to enter a booming economy. It's happening as we speak….I have little doubt that excess savings, new stainless savings, huge deficit spending, more quantitative e.g., a new potential infrastructure bill, a successful vaccine, and before now the end of the pandemic, that the U.S. economy will lightly boom, and this boom run to 2023 because all of the spending could extend well into 2023.” - JP Morgan Chase (JPM) CEO Jamie Dimon
But inflation certainly didn’t feel transitory
"I hear Chairman Powell talked about transitory inflation. I mean I think transitory is what you use when it's not happening to you. And you could say the OPEC was transitory in the 1970s, but didn't feel very good while it was going on. So how long is the inflationary pressure going to last? I don't know. But it feels to me that certainly for the next 12 months, we're going to feel inflationary pressure across a broad part of our portfolio." - General Mills (GIS) CEO Jeffrey Harmening
Supply chain challenges probably weren’t going to get better in 2021
"We think that the issues we've been talking about are cyclical and that over time, they will correct themselves. It does seem to be very much driven by an out of balance, supply and demand equation, exacerbated and extended by the huge pent-up demand we're seeing with so many consumer products. So, we do think that the situation will get better. We just don't see that happening in 2021...we do believe that some portion of these costs, specifically the higher wage rates will be permanent" -Burlington Stores (BURL) CFO John Crimmins
Consumers just wanted to enjoy summer
"Hopefully, everyone is getting ready to enjoy summer. Certainly, that's what we're seeing in our business." - Delta Air Lines (DAL) CEO Edward Bastian
But this inflation is probably not transitory
"There is no question there is inflation, whether it’s transitory or not, I think it depends on how you define the timeframe of what transitory is." - Wells Fargo (WFC) CEO Charles Scharf
Even the Fed saw the strength
"The problem now is that demand is very, very strong. Incomes are high. People have money on there in the bank accounts. Demand for goods is extremely high, and it hasn’t come down. We’re seeing the service sector reopening, and so you’re seeing prices are moving back up off their lows there." - US Federal Reserve Chair Jerome Powell
But still saw no reason to act
"With regard to interest rates, we continue to expect that it will be appropriate to maintain the current zero to one quarter percent target range for the federal funds rate until labor market conditions have reached levels consistent with the committee’s assessment of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time...More important than any forecast is the fact that whenever liftoff comes policy will remain highly accommodative. Reaching the conditions for liftoff will mainly signal that the recovery is strong and no longer requires holding rates near zero." - US Federal Reserve Chair Jerome Powell
Demand remained intense
"The intensity of demand has not abated,..the demand cycle that we’re seeing, both domestically and internationally, continues to be extremely strong...there’s no short-term change in what we’re seeing. As a matter of fact, I’m seeing an intensification of that in our international business." - FedEx (FDX) President and CEO, FedEx Express Don Colleran
And some Fed officials started to worry that inflation wouldn’t be transitory
"Inflation pressures will bleed out into a broader range of items, and will persist through 2022....No one really knows how this is all going to unfold. We have to be ready for the idea that there is upside risk to inflation and for it to go higher. I think we’d be healthier, as we’re making progress in weathering the pandemic and achieving our goals, to start adjusting these purchases -- Treasuries and mortgage-backed securities -- sooner rather than later." - Dallas Federal Reserve President Rob Kaplan
People were enjoying summer
“It’s a lot of, ‘I’m going to see family, I haven’t seen my parents in a year” - Okta(OKTA) CEO Todd McKinnon
“It's definitely morning here and a little bit sunnier than even normal here on the West Coast. So we're enjoying the onset of summer and the resurgence in the consumer, everybody's thing” - Skechers (SKX) CFO John Vandemore
Some concerns about a Delta variant began to emerge
"From here, I remain concerned about the prospect of a pandemic resurgence. The Delta variant, should it spread further, could spear policy actions at slow economic growth. We are already seeing this play out in places like Hong Kong and Australia and potentially in parts of Europe." - Goldman Sachs (GS) CEO David Solomon
But vaccines seemed to be effective at preventing infection
"The unvaccinated still face an elevated risk of serious illness and death from COVID-19. In fact, recent reporting says that over 97% of hospitalizations are for unvaccinated people" - United Airlines (UAL) CEO Scott Kirby
Delta certainly wasn’t impacting earnings
"Economic fundamentals are strong, and they are filtering into robust earnings results in just about every sector, both against depressed levels in 2020, but honestly, also relative to the trend line in 2019." - Manning & Napier (MN) CEO Marc Mayer
Strong demand was creating different challenges
"The strong demand environment comes with some industry-wide challenges. Labor remains constrained across the service economy... while the labor market remains tight, we’re managing it well due to the pass-through nature of our contracts." - XPO Logistics (XPO) Chief Strategy Officer Matt Fassler
Growing Delta cases were creating some drag
"…the continued bit of cloudiness about the Delta variant, I think, is creating a little bit of a drag on food service at the moment. And so for us, the main characteristic of the third quarter and our guidance is simply lack of visibility" - Beyond Meat (BYND) CEO Ethan Brown
But not in any significant way
”So if you look at average daily rideshare rides, July was our best month since March of 2020. We saw growth month-over-month, and it was an all-time high.” - Lyft (LYFT) Brian Roberts
Just a little bit of dampening
"With the Delta virus, we're seeing a little bit of dampening. It's hard to tell whether that's the Delta virus or just seasonality. We suspect it's a little bit of both." - Ark Restaurants (ARKR) CEO Michael Weinstein
The virus probably isn’t going away anytime soon
"I think Marc has talked a lot about how we're in this new pandemic world, that this isn't going away. We've opened half of our offices" - salesforce.com (CRM) COO Bret Taylor
For a moment, it appeared that the economy had downshifted
"Our latest report suggests that the labor market recovery has downshifted. In August, private-sector payrolls grew by 374,000 on net...final estimated job gains for August will likely fall short of the rapid average monthly pace of hiring that we've seen since January of this year." - ADP (ADP) Chief Economist Nela Richardson
“Although consumer spending momentum downshifted in August, the recovery remains on track…U.S. consumer spending for the full year of 2021 should still expand at its fastest pace in decades.” - Visa (V) Chief Economist Wayne Best
But a little Covid couldn’t keep the US consumer down
“But overall, credit card spend, I would say, is robust… if we look at spend right now, even with that softening relative to 2019, we’re still up 18%, 19% relative to 2019, notwithstanding that those sort of key areas are down. And remember that ours is a portfolio that has a decent skew towards travel and entertainment." - JPMorgan Chase(JPM) Co-CEO of Consumer & Community Banking Marianne Lake
"The overall view that we have is that we have an improving macro environment and that's a good thing. The global economy and sentiment remain quite positive" - Citigroup (C) CFO Mark Mason
Delta softness was short-lived
“…we saw a bit of an impact in terms of a slowdown of our guests coming to our parks. But then Labor Day happened, and of a sudden, things started to recover quite nicely. So it was a very short sort of impact, and we like the recovery that we are seeing off that.” - Walt Disney (DIS) CEO Bob Chapek
And that gave the Fed the confidence to begin tapering
“…it’s time for us to begin to taper them. Their usefulness is much less as a tool than it was at the very beginning. And of course, this leaves the whole question of rate increases ahead, which is really where the framework—the framework is all about how we deal with rate increases and that sort of thing.” - US Federal Reserve Chair Jerome Powell
Inflation continued to ratchet up
"In the last few months, inflation has continued to ratchet it up, mainly with packaging and transportation costs. We’re experiencing the highest inflationary period of the last decade or even two, We, along with our peers and customers are also facing additional pressure on our supply chain due to strained transportation capacity and labor shortages and distribution.” - McCormick & Company (MKC) CEO Lawrence Kurzius
The inflation was unprecedented
“We’re looking at unprecedented inflation, as all of industry is right now. We’re going to have to manage our way through this time of cost inflation, just as we have in the past. It’s going to be a mix of price increases, unfortunately, and also cost-effectiveness through our [comprehensive continuous improvement] program." - McCormick (MKC) CEO Lawrence Kurzius
Clearly, this inflation was more than transitory
“It’s not transitory. I’ve never seen a greater divergence between what’s defined as transitory and what’s being seen day in and day out. Most CEOs I talk to today are very concerned about supply chain, very concerned about import costs, whether they’re materials, commodities and increasingly labor” - Goldman Sachs (GS) President John Waldron
But consumption remained strong
"…overall consumption trends remain strong globally, particularly as you said in the U.S. markets continue to grow within our categories of daily use, health, and hygiene in the range of mid-singles." - Procter & Gamble (PG) CFO Andre Schulten
Businesses had plenty of pricing power
"Last quarter, I think I talked about how we were seeing roughly a 6% increase year-over-year in the U.S. We are still seeing that and that -- that's pretty much the level we expect for the full year 2021 over 2020 right around that 6%...We haven't seen, I’ll say, any more resistance to our price increases than we've seen historically. So that the 6% has been pretty well received by customers." - McDonald's (MCD) CFO Kevin Ozan
The Fed began to taper
"The level of inflation we have right now is not at all consistent with price stability." - US Federal Reserve Chair Jerome Powell
Web 3 and the Metaverse became hot buzzwords
“...relatively small percentage of content in the world is truly real-time, truly 3D, and truly interactive. What we've said is the majority of content by the end of this decade will be. My definition of the metaverse is pretty straightforward. We've gone from Web 1 to Web 2. Web 1 peck stuff. I had Mosaic and a box. Web 2 enables an Uber, if you will. Satellite data, sell data, tracking information, nap on your phone, it's magic, the car shows up. Web 3 as these experiences become real-time, they become 3D, they become interactive, and often spatially aware.” - Unity Software (U) CEO John Riccitiello
The Fed changed its tone
“The economy is very strong and inflationary pressures are high, and it is therefore appropriate in my view to consider wrapping up the taper of our asset purchases - - perhaps a few months sooner” - US Federal Reserve Chair Jerome Powell
And recognized that inflation may not be transitory
“I think the word ‘transitory’ has different meanings to different people. To many, it carries a sense of ‘short-lived.’ We tend to use it to mean that it won’t leave a permanent mark in the form of higher inflation. I think it’s probably a good time to retire that word and try to explain more clearly what we mean” - US Federal ReserveChair Jerome Powell
But a new COVID variant emerged
“...I think we're in a difficult position at the minute because omicron has 15 mutations, 30 in the spike protein, mutations that span in alpha, beta, gamma, and delta, some of them are really quite concerning as a virus. It's a concerning virus. But we don't know that much more about it - - what those mutations really translate into, Matt, in terms of severity of disease and immune evasion, while they have features that would suggest it can cause severe disease and it can result in immune evasion. We don't really know yet” - Moderna (MRNA) Chief Medical Officer Paul Burton
Still, 2021 ended on a strong note
"Generally speaking, absent the variant going into 2022, the macroeconomic environment, at least for where we operate, which is in the United States and Europe primarily, is quite constructive. We're seeing a lot of -- there's a lot of activity, broadly speaking, in the economy. We're seeing supply chains loosen a little bit. They're getting a little bit better. We're seeing -- yes, we're seeing inflation, but there's more and more signs that this is going to be something that resolves itself in '22. It looks more like what everybody's been wishing for, which is an environment of 2% to 3% inflation may, in fact, be the case, not something that spikes up at 4 or 5." - Lazard(LAZ) CEO Kenneth Marc Jacobs