- U-6 unemployment rate is key measure to follow (unemployed and underemployed). Rate is currently 17%. Employers more likely to to use temp workers to fills job needs as uncertainty lingers.
- Deleveraging will take a while to work through
- Demand for credit is weak
- Net private credit creation has been weak for the past 5 quarters
- Washington balance sheet is a mess
- What's being discussed in Washington is not the problem and the problem is not being discussed!
- Defense spending and entitlements represent over 75% of the Federal busget, yet nobody is discussing measure to deal with this
- Valuation is not compelling in most markets.
- 40% of S&P 500 earnings come from non-US sources (earnings growth does not necessarily mean improved economic situation at home)
- Demographically, in 30 years China will look like Japan today with an aging population dependent upon a smaller productive work force
- Population will get old before they get rich!
- US long-term Treasuries = Return Free Risk!
Disclosure: No Positions