For me, since I’m turning 39, the news will be grave indeed as my knees and back perform well below expectations. But for the American economy the news will probably even worse. Via Hot Air we can start with this Barclay’s report which is considered an optimistic view of the economy. They’re prediction for growth has been revised to 3%.
I’ll let you read through that but the first few pages are where the worries should be. If you look at the various data as a whole for the last couple of year it looks like several things are happening in the economy, and none of them are really helpful for long term stability of a consumer driven model. The first is that people are getting out of debt and more importantly trying to minimize personal debt. As people who can afford to get out of debt do so we’re left with a population of debters who will never pay off, thus destroying the credit industry long term. The second is that people seemed to run out and make their big purchases all at once while they could, and are now slowing down on buying. Art Laffer predicted this and every survivalist out there knows someone who made a bunch of large purchases while beginning their preps and now is living a frugal lifestyle. The there is is that it looks like economic activity is slowing in proportion to the length of time we have high unemployment, which will not change anytime soon.
Foreclosures are up 75% in major metro areas and there is no real economic good news on the horizon. So I think tomorrow we’re going to see a very bad economic news day, and likely a drop in the Dow in response. Will it be TEOTWAWKI? No. The Obama administration and a complicit media will put a positive spin on things, and investors are far enough removed from the first crash to be overly skittish. This will be just another day for most of us.