The preoccupation with all of the things that could possibly go wrong has been a persistent characteristic of this economic recovery. It was termed recession porn in 2009. It has been a focus of websites, pundits and, of course, goldbugs. When an economist picks up the nickname “Dr. Doom,” it suggests an obsession with the negative.
Recession porn was perhaps best parodied in the following tweet:
zerohedge once again pissed that asteroid avoided colliding with earth. $SPY
— Urban Carmel (@ukarlewitz) September 15, 2010
It was a wry reference to the Armageddon cheerleading that would make gold, canned goods and any small-weapons caches much more valuable.
Simon Cox, Asia Pacific investment strategist at BNY Mellon Investment Management, looks at the global economy and asks a verydifferent question: What if everything started to go right in the world economy . . . ?
Continues here: What Might Go Right in the Economy
Don’t fret too much about things going right with the economy. Congress is on the job ensuring that won’t happen.
Seriously, we could see a very interesting labor market over the next decade with rising wages but declining labor force as the boomers retire and leave the labor pool. So we could see individual wages rise but total labor costs stay flat or decline. This could be the opportunity for companies to get the technology driven productivity gains and reduce their labor force, all without the need for additional offshoring.
Filtering out the petroleum sector, the S&P Q1 earnings rose 11.5%. That and sales seem to be muddled by the middle class savings at the pump.
I’ve been fading the USCongress for over ten years now. It’s a workable strategy. To quote Groucho – Whatever it is I’m against it.
The author’s a bit over the top, but things like this are beginning happen: http://www.huffingtonpost.com/scott-santens/self-driving-trucks-are-going-to-hit-us_b_7308874.html
Not saying how things will work out, nor that it will all be bad, but what ever are we all going to do?
A couple of pieces posted today about the dour US consumer. What is baffling to me is how surprised everybody is regarding the slow pickup in retail sales. The average US consumer clearly got stretched financially with excess debt, their incomes have dropped, and they got older older.
Baby boomers are either in retirement or getting close to it. Many are realizing that they don’t have great retirement savings, especially since it won’t generate any interest or dividend income, even if they are in the top 10%-1% range. Why would you expect them to be buying new clothes they don’t need instead of paying down debt or saving money? I am relatively pleased with our personal savings under the old interest and dividend norms, but not if we have 2% interest and dividend rates a decade from now – so we are saving at a high rate to provide a better asset base to allow for capital spend-down to make up for the lack of income. That comes right out of consumer spending.
The big surprise to me over the past decade is how resilient the consumer has been, especially after the housing carnage a decade ago. I think that comparing the current consumer to the consumer of 20 years ago is a gross blunder as the demographics are completely different.
http://www.marketwatch.com/story/why-consumers-are-so-cautious-2015-05-19?page=1
http://www.marketwatch.com/story/where-have-all-the-shoppers-gone-2015-05-19