Reader question:

Please explain “head wind” in this: The biggest head wind is, of course, lack of funding.

My comments:

Here, they’re talking about funding for, say, a new business project, and the lack of money is the biggest obstacle facing them.

Yes, obstacle is what head wind means here.

Head wind, or headwind, one word.

The headwind, you see, is literally wind blowing into your face, wind that is running opposite to the direction you are moving in.

And whenever you run against the wind, you find it hard. You are unable to run as fast as your normally can due to the resistance of the wind.

Hence, figuratively, a headwind is an impediment, a hindrance, something that slows you down, something disadvantageous, something that, generally speaking, doesn’t make life easier for you.

A headwind is the opposite of a tailwind, the wind that pushes you from behind and propels you to go forward faster.

Headwind, tailwind, as in, heads or tails.

All right?

All right. Here are media examples of headwind:

1. Marc Harrison sat in a meeting in Washington, D.C., this week with CEOs from hospitals throughout the United States, and came away discouraged.

“I listened to my peers around the table, and to be honest, I was disheartened. And the reason I was disheartened is because all of the conversation revolved around, ‘How do we maintain ourselves? How do we maintain our prestige? How do we maintain our current economic model?’” Harrison recalls. “Not a single CEO talked about, ‘How do we optimally serve the people we’re meant to serve?’”

Harrison, president and CEO of Intermountain Healthcare, said such a view is narrow and self-serving, and promised Friday at Intermountain’s annual report to the community that the hospital and clinic system is committed to a more selfless idea of its mission than is generally seen in the industry.

“I want to affirm for all of you that no matter what happens in health care, that Intermountain is absolutely committed to the communities we serve,” Harrison told various community and civic leaders, as well as some Intermountain executives and medical providers, at a banquet at the Grand America Hotel.

“We feel very connected to the state of Utah. Utah’s entrepreneurial spirit invigorates me as I think of creative ways Intermountain can serve you and your neighbors.”

Harrison said the health care industry is undergoing “unprecedented” changes in financial models, as evidenced by “organizations that are scurrying to come together to have adequate scale – collective buying power – so that they remain relevant and economically viable.”

Harrison believes some of those seismic shifts in the industry are rational, but not all.

“Intermountain, like all great organizations, must grow in order to stay healthy, but we have very strict guardrails around how we will grow and why we will grow, and we will not participate in irrational activity simply meant to drive the bottom line,” Harrison said.

...

Harrison decried what he sees as unsustainable and unprincipled trends in the pharmaceutical industry leading to high drug prices for consumers.

“One of the headwinds we face is, frankly, craziness from a pharma standpoint,” he said. “Even as our other costs decrease through hard work, what I can tell you is that we expect a 12 to 14 percent increase in pharma costs per year.

“… Americans pay more for drugs than any other country in the world. We’re seeing outrageous price increases and we’re seeing shortages that are created by … a significant number of unethical generic drugmakers.”

- Intermountain CEO decries ‘unethical’ drug price hikes, self-centered American medical industry, Deseret.com, October 27, 2018.

2. The Philippine economy managed to post a stellar growth in the first quarter, smashing expectations despite the Omicron onslaught at the start of the year.

Gross domestic product, the sum of all products and services created in an economy, grew 8.3% year-on-year in the first three months of the year, the Philippine Statistics Authority reported Thursday.

The latest reading exceeded analysts’ expectations. A BusinessWorld poll of 17 economists yielded a GDP growth median estimate of 6.7% for the period.

…

But Alex Holmes, Asia economist at London-based Capital Economics, said there’s a chance that “the strength of the recovery will begin to wane soon” amid an uncomfortably high inflation that could cripple consumer spending anew. And the BSP’s looming tightening to fight price spikes could weigh on growth.

“The recovery will have gained momentum in recent months after the Omicron wave faded and restrictions were almost all removed. But while day-to-day disruption from COVID-19 is largely in the rear-view mirror, new headwinds are building,” Holmes said in an e-mailed commentary.

“A jump in prices is eating into consumers’ real purchasing power, with inflation hitting 4.9% y/y last month. Meanwhile the central bank is set to begin tightening policy,” he added.

- Philippine economy grows 8.3% in Q1, beating expectations, PhilStar.com, May 12, 2022.

3. For the last two decades, Bruce Flatt has been the CEO of Brookfield Asset Management, growing it to become the second-largest alternatives firm in the world. He oversees more than $725 billion in assets spanning a diverse portfolio comprised of real estate, private equity, infrastructure, energy transition, credit, and insurance.

Flatt brings his vast perspective to an exclusive interview with CNBC’s Delivering Alpha newsletter, where he explains why he’s not too concerned about the many headwinds facing the economy today.

Leslie Picker: I want to kick things off with kind of a bird’s eye view, because you do have such a unique vantage point in the economy right now. And given all of the forces that have caused the public market sell-off - inflation, higher interest rates, concerns about geopolitics, China, Russia supply chain challenges, and the like - what’s been the impact from your vantage point?

Bruce Flatt: Long-term wealth creation is about investing in great businesses with great people and compounding over the long term. So, despite wars, pandemics, explosions, recessions, and all the other things you just mentioned, over the past 30 years, we’ve just continued to buy great businesses, keep compounding and the returns have been excellent. And so, I guess I’d just say everyone just has to stay invested, not get too excited about the market gyrations that happen every day, and just keep with it. And that’s the secret to success in investing.

Picker: Given what you’re seeing in terms of the deal market. In real estate and the like — there are concerns about a recession, there are questions about whether we’ve reached the bottom — do you see any indications that either of those are on the horizon?

Flatt: The good news is corporate balance sheets are very strong. Personal balance sheets are very strong. If we have a recession, it’s going to be a light recession and that’s a good thing. But there’s no doubt - look, we need to get inflation down around the world and it’s either going to come down naturally, over time, or the central banks are going to cause it to come down. And those two scenarios paint differently, but they will be successful. We will get through all of this as we always do. And we will come out the other side. What’s important for us is that inflation is very impactful in a positive way for real assets. And these are real return things that we invest into and they produce - they’re highly cash generative, and that’s a very positive thing for the type of things that we own.

Picker: How does that work? Why is inflation so positive, given that the cost of debt is going up?

Flatt: When we buy real assets, you put a lot of money in upfront. Your expenses are relatively small compared to that and your margins are high. So, when inflation impacts it impacts the whole asset, but it impacts the expenses only to a small extent. So, over time, the revenues compound much, much more when you get an inflation coming into the revenues and it impacts. Now, debt will go up a little bit if you don’t have fixed rate leverage, but a lot of people that own these assets today have fixed rate leverage. If they were doing what they should have been doing, they were fixing their leverage over the past number of years at historic lows. But maybe just to step back, all of these assets work really well at low-ish interest rates and of all predictions going forward, we’re going to have low-ish interest rates. We’re not going to have as low as they were, but we’re going to have low-ish rates, whether it’s 3% on the Treasury, 4% on the Treasury, 5% on the Treasury, these assets that we own do really, really well.

Leslie Picker: So, five-ish does not scare you?

Flatt: No, no. I don’t think we’ll get there. But no.

- The CEO of the world’s second-largest alternatives firm is optimistic about a light recession, CNBC.com, May 20, 2022.

本文僅代表作者本人觀點，與本網立場無關。歡迎大家討論學術問題，尊重他人，禁止人身攻擊和發布一切違反國家現行法律法規的內容。

About the author:

Zhang Xin is Trainer at chinadaily.com.cn. He has been with China Daily since 1988, when he graduated from Beijing Foreign Studies University. Write him at: zhangxin@chinadaily.com.cn, or raise a question for potential use in a future column.

（作者：張欣   編輯：丹妮）