Comments on: Jobless claims rise slightly, weakness remains http://www.creditwritedowns.com/2009/06/jobless-claims-rise-slightly-weakness-remains.html Sat, 21 Nov 2009 08:48:41 -0700 http://wordpress.org/?v=2.8.6 hourly 1 By: pwm http://www.creditwritedowns.com/2009/06/jobless-claims-rise-slightly-weakness-remains.html/comment-page-1#comment-5611 pwm Fri, 26 Jun 2009 21:10:10 +0000 http://www.creditwritedowns.com/2009/06/jobless-claims-rise-slightly-weakness-remains.html#comment-5611 I have some difficulty understanding what sector the recovery will be coming from. Absent consumer credit growth or wage/employment increases, this sector can not lead a recovery. (Joseph Ellis and Ray Dalio have both noted this.) Residential investment is not going to lead us out anytime soon. Capex seems likely to remain low in the face of excess capacity and stagnant demand. Inventory rebuilding seems unlikely to be sustained if consumers remain in deleveraging mode. And we aren't going to be exporting our way out of it.<br><br>So this leaves the government. Yes, the bulk of the stimulus hits next year, and monetary policy is very stimulative. Are you expecting technical growth to be caused by a bottoming of the decline in the private sector combined with an increase in government spending? <br><br>How do credit writedowns factor into your view? I see many, many more coming. I have some difficulty understanding what sector the recovery will be coming from. Absent consumer credit growth or wage/employment increases, this sector can not lead a recovery. (Joseph Ellis and Ray Dalio have both noted this.) Residential investment is not going to lead us out anytime soon. Capex seems likely to remain low in the face of excess capacity and stagnant demand. Inventory rebuilding seems unlikely to be sustained if consumers remain in deleveraging mode. And we aren't going to be exporting our way out of it.

So this leaves the government. Yes, the bulk of the stimulus hits next year, and monetary policy is very stimulative. Are you expecting technical growth to be caused by a bottoming of the decline in the private sector combined with an increase in government spending?

How do credit writedowns factor into your view? I see many, many more coming.

]]> By: pwm http://www.creditwritedowns.com/2009/06/jobless-claims-rise-slightly-weakness-remains.html/comment-page-1#comment-5601 pwm Fri, 26 Jun 2009 20:10:10 +0000 http://www.creditwritedowns.com/2009/06/jobless-claims-rise-slightly-weakness-remains.html#comment-5601 I have some difficulty understanding what sector the recovery will be coming from. Absent consumer credit growth or wage/employment increases, this sector can not lead a recovery. (Joseph Ellis and Ray Dalio have both noted this.) Residential investment is not going to lead us out anytime soon. Capex seems likely to remain low in the face of excess capacity and stagnant demand. Inventory rebuilding seems unlikely to be sustained if consumers remain in deleveraging mode. And we aren't going to be exporting our way out of it.<br><br>So this leaves the government. Yes, the bulk of the stimulus hits next year, and monetary policy is very stimulative. Are you expecting technical growth to be caused by a bottoming of the decline in the private sector combined with an increase in government spending? <br><br>How do credit writedowns factor into your view? I see many, many more coming. I have some difficulty understanding what sector the recovery will be coming from. Absent consumer credit growth or wage/employment increases, this sector can not lead a recovery. (Joseph Ellis and Ray Dalio have both noted this.) Residential investment is not going to lead us out anytime soon. Capex seems likely to remain low in the face of excess capacity and stagnant demand. Inventory rebuilding seems unlikely to be sustained if consumers remain in deleveraging mode. And we aren't going to be exporting our way out of it.

So this leaves the government. Yes, the bulk of the stimulus hits next year, and monetary policy is very stimulative. Are you expecting technical growth to be caused by a bottoming of the decline in the private sector combined with an increase in government spending?

How do credit writedowns factor into your view? I see many, many more coming.

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