What Venezuela’s Regime Change Means for Oil
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What market trends set the stage for the episode’s discussion?
Mm. Our earliest childhood memories can feel so visceral. I have this memory of my mother standing on the beach, you know, the wind whipping her hair and her jacket, calling into the wind, with my siblings out in the lake and the dam, you know, looming in the distance. But none of these memories were true. This week on Explain It to Me from Vox. Why can't I remember being a baby?
Today's number? 303 billion. That's how many barrels of oil are sitting in Venezuela, more than any other nation in the world. That is $18 trillion worth of oil at current oil prices, roughly equal to the GDP of China. However, none of this has anything to do with what happened this week. Money market mess. If money is evil, then that building is hell. Show goes up! The person that has watched it. Show, sell! Welcome to Prof G Markets. I'm Ed Elson. It is January 6th. Let's check in on yesterday's market vitals. The major indices climbed with the Dow closing at a record. The price of oil rose on President Maduro's capture in Venezuela. More on that later. Meanwhile, Treasury yields dropped and finally Bitcoin rallied above $94,000.
Okay, what else is happening? It is our first daily episode of the year. And even though we took a holiday break, the market certainly did not. So here to help us review what we missed at the end of the year and also discuss the outlook for 2026. We are speaking with Mark Zandi, Chief Economist at Moody's Analytics. Mark, welcome back to Profiggy Markets and Happy New Year.
Happy New Year, right? Thanks for the opportunity. It's good to be with you.
Absolutely. You are our first guest back in the new year, which is a huge honor, as I'm sure you well know.
I I'm sure you say that to all the economists, so but I'll take it. I'll take it.
So we well, first we should want to start with your scorecard for 2025. You basically add up all of the your your predictions from last year and compare it to what we actually saw. You pretty much nailed most of it. Uh I'm just looking at the scorecard now. Uh job growth, GDP growth, um, unemployment rate. was pretty accurate. I mean, generally um pretty accurate across the board. I guess which things surprised you in 2025? Which things did you get wrong? Um, what sort of struck you?
Well, first thing is that we got it that close. As you know, Ed, there was a lot of drama in 2025, lots of things going on, tariffs, immigration, doge, you know, just that it seemed endless. And uh despite all of that, the the numbers came in pretty close to what we thought they would at the start of the year, uh start of 2025. The thing that I took uh greatest pleasure in uh was uh jobs, uh, you know, average. Average monthly job growth in twenty twenty five compared to twenty twenty four was a hundred and twenty five thousand on the nose, and our forecast one hundred and twenty four thousand per month. Now Truth in forecasting, you know, we were overly uh uh uh pessimistic about uh jobs in this first half of the year and overly optimistic in the second half w after and when I really
The demarcation point here was Liberation Day. That was what when things kind of changed. That was back in April of last year. Uh so we didn't get the entire year right, but on average, through the year we got it right. The the thing that we missed most was around asset prices and the increase. I mean, the equity market was up 15%, calendar year 25 over 24. We were we expected 10%, a good year, but it was even better than that. And even house prices. And we've been forecasting house prices and doing a lot of work there for for decades. Uh, you know, they they came in up four, three, four percent. We were expecting closer to one, two percent. So, you know, asset prices came in a little bit more strongly.
But again, you know, it was a pretty good year from a forecasting perspective. And and it it's not always that way. Uh, so so I'll take it and uh and and uh I'm enjoying.
Something that you undershot
How did Mark Zandi evaluate his 2025 economic forecasts?
Uh, and to be fair, let's let's give you your cred. I I think I did. I mean this was pretty accurate across the board, but you did undershoot on inflation.
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Chapters
4 chapters
1
What market trends set the stage for the episode’s discussion?
0:01–4:39
2
How did Mark Zandi evaluate his 2025 economic forecasts?
4:39–7:32
3
What were the most surprising elements in Zandi’s 2025 scorecard?
7:32–21:43
4
Why did the recent CPI report shock the analysts and what does it mean for inflation expectations?
21:43–35:09
Speakers
2 identifiedMore from Prof G Markets
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