One of the popular indicators for recessionistas is the slowdown in bank lending. ![]() Despite the moving goalposts, it's important to get a sense of the bears' current arguments to better understand why the calls for economic doom are overblown. First, it was the spike in food and energy prices, then it was the housing market, and now it's "long and variable lags" from rate hikes that many of the same people said the economy couldn't handle in the first place. Over the past year, Wall Street pessimists' reasons for an approaching recession have shifted. The economic doomsday clock has been reset. Given the increasing number of reasons to be upbeat on the US economy, it's time for the recessionistas to admit defeat. And there's only so long one can keep claiming that the recession is just six months away. ![]() Housing picking up? It's only because inventory is low.ĭespite the year-plus in which analysts have been arguing that a recession is imminent, none of the arguments behind the predictions stand up to scrutiny. Rally in US equity markets? We had a big rally in mid-2008, too. Strong jobs growth? It's a late-cycle sign that the end is nigh. This stubbornness helps explain why Wall Street is having an exceptionally hard time letting go of the idea that a recession is just around the corner.Īs the forecasts for recession keep failing to come true, the explanations for this delay are always explained away. ![]() They don't like to admit when they're wrong, and even as the evidence against them piles up, many stick to their guns. Wall Street analysts and economists have always had a tendency to fall in love with their forecasts. Account icon An icon in the shape of a person's head and shoulders.
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