Tuesday, January 30, 2018
Some US economic news
With the market crazy high, and $VIX popping, let's see what we can dig up for US economic news:
Reuters - US consumer spending rises, savings at 10-year low. The low savings just means consumers aren't protected in anticipation of the next downturn... which is fine as long as there's no downturn.
New Deal Demoncrat - is the economy partying like it's 1999? Sure, and yet 1999 was the best year to invest in the last half century. So it doesn't mean too much, if 2000 doesn't come for another few years.
WSJ (paywalled? I get their RSS feed for free so I dunno what the problem is) - 4Q GDP. It's important to note the US has only just now closed the output gap, and you wouldn't expect output gap closure to happen just a year before the next recession.
Calculated Risk - chemical activity barometer increased in January. So we know industrial activity will be growing. So there is at least another year of growth ahead.
Remember, even the MBS crisis took a few years to go fubar.
So god knows. Maybe the market goes even higher to a really crazy forward P/E before something eventually happens.
Or maybe governments start redistributing to the poor, supporting consumer spending with a new 1950s-style boom, while curtailing giveaways to the rich that only end up inflating asset markets.