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Booming U.S. Consumption ‘a Mystery’

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What’s powering the U.S. economy? ‘It’s a mystery,’ concludes a think-piece by Noah Smith posted Wednesday at Bloomberg.com. He ultimately settles on a boring economic environment as the main reason why U.S. consumers continue to spend. While we may be living in all-too-interesting times from a geopolitical standpoint, the U.S. economy is arguably on a modest glide path, with no misguided Fed policies, oil price spikes or wild speculation to trigger a recession, Smith writes.  Of course, the eternal optimists who nurture and sponsor bull markets have voiced similar thoughts just ahead of every recession that has ever occurred, so we should probably take what they are saying now with a grain of salt. Stocks are priced, if not for perfection, then for expectations that nothing will go seriously wrong. Paradoxically, the worst thing that could actually could go wrong, and eventually will, is the onset of a bear market. It is predictable that it will begin for reasons that will not be apparent until we are all waist-deep in it.

Please do not ask trading questions!

  • John Jay February 8, 2020, 1:11 am

    What’s powering the U S Economy?

    1) Easy access to low interest car loans, “No job, No credit, No problem!”
    2) A vast “Off the Books” business universe.
    3) 22 million people working for some level of government, almost twice the number working in manufacturing.
    3a) God knows how many people from #3 above now retired with a great pension/healthcare + COLA
    4) The “Port Royal” effect as buccaneers from all over the globe come here to buy a mansion and kick back.
    5) Easy access to HELOC etc. for those with equity in their house to burn.
    6) Silicon Valley types cashing in on stocks, options, IPOs from their cash burning publicly traded corporation.

    There you go, six things just off the top of my head!

    Is this a great country or what!

    • RedWillDanaher February 10, 2020, 10:54 am

      Add propaganda to the mix.