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U.S. industrial production has not expanded this year, but neither has it collapsed. Eurozone industrial production took a hit beginning last September, but has managed to eke out some gains this year. Not a picture of growth, but not one of global recession either. If the worst that happens is that the U.S. and Eurozone economies remain stagnant for another year, that wouldn't be the end of the world. 5- and 10-yr sovereign yields in the U.S., Eurozone, and Japan are priced to the expectation that growth will be stagnant at best, in my view.
6 comments:
92 erinoviI have a recession warning generated by
the durable consumer goods production
going nearly flat year over year. On the flip side the business equipment
portion is still a strong 10.9% yoy.
The durables consumer goods number does generate a fair number of false positives so as this time I consider
it just a minor warning.
I also prefer to wait until industrial production has collapsed.
I prefer to watch the Big Four that the NBER uses. Industrial production is one of the four. Since these four are coincidental they lag a bit from delay in reporting. But, the leading data are unreliable. I rather know what is going on than what might happen.
Scott,
Romney is completely shuttering your China thesis. His aim is for trade wars, tariffs, and higher domestic prices. What other countries might he go after? Yikes!
My firm belief is that "common wisdom" - the opinion of the majority of investors leaning heavily in one direction - almost never is the path to profitable investment. The direction toward which they lean doesn't matter. I prefer to "lean" heavily in the opposite direction for my investments.
This meant preferring equities since the panic and collapse four years ago. It HAS NOT been easy to maintain that position through the declines of 2010 and 2011 but I preserver.
Scott's blog has been invaluable at critical moments when the investment environment seemed very bleak.
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