Forecasts of a Doomed Economy
Wednesday, September 11, 2013
Contrary investing used to be a profitable endeavor. Things have changed. The doom business is in full swing as many financial prognosticators seek to hedge their normally ecstatic outlooks in order to sell their advice. When tragedy becomes a consensus sentiment, it used to be the time to buy. Now that formula has to factor in a different set of risks. Namely the incoherent political intrusions and stimulus-austerity gyrations has to head the list. Has forecasting become a lost art or did it evolve into an algorithm supercomputer project? In either case, the doom factor is sure to continue to be a stable from the Cassandra circle as long as an economic recovery allures the former members of the middle class. Nevertheless, the bulls want you to believe that economic indicators are guardedly improving. The Global Economic Intersection boldly portends.
Our September 2013 Economic Forecast shows a change of trend. Many portions of our economic model started to expand over the previous month’s baseline.
We continue to warn that consumer spending increases are expanding at a much faster pace than income – and that eventually either a jump in income or a fall in consumption must occur to close this gap. This remains an economic headwind for 3Q2013.