Ariel’s Hobson: ‘New normal’ is a lot like the old normal
Discussions about the “new normal” are just a lot of noise, according to Mellody Hobson, president of Ariel Investments LLC, and Liz Ann Sonders, chief investment strategist at Charles Schwab & Co. Inc.
Discussions about the “new normal” are just a lot of noise, according to Mellody Hobson, president of Ariel Investments LLC, and Liz Ann Sonders, chief investment strategist at Charles Schwab & Co. Inc.
“I have nothing but plenty of respect for Bill Gross and Mohamed El-Erian,” Ms. Sonders said of the co-chief investment officers of Pacific Investment Management Co. LLC during a panel discussion last Tuesday at the Schwab conference. “But my concern about the “new normal’ is that it’s a story that everyone is telling.”
There was nothing “normal” about the state of affairs that got the economy into the mess, Ms. Hobson said.
“We think we went through a period that wasn’t normal,” she said. “Was it normal to buy a house without any paperwork?”
Ms. Hobson also noted that before the market crash, the average American had five credit cards and $11,000 in credit card debt. “What we are seeing now is normal,” Ms. Hobson said, noting that Americans are now saying, “Oh, I’m getting a house, and I have to show you my financials.’”
Indeed, Ms. Hobson and Ms. Sonders said that they are both optimistic about the economic recovery.
“We are on the other side of the gloom and doom,” Ms. Hobson said.
E-mail Jessica Toonkel at [email protected].
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