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Some Bright Spots, But The Secular Problems Continue (Notes on: Pension/Housing Problems, China Continues Strong, An Important Economist is Now Stating the Obvious, and Higher Taxes on the Way)

The "Pension Problem" will be a large negative on a global scale as rates of growth "forecasted" end up being a mirage.  Huge holes will need to be covered and thus is yet ANOTHER drag on global growth.  
 
It's only a matter of time before housing goes into a double dip...therefore taking the rest of our consumer based economy with it.  
On the Bullish End though.  The China growth story continues in earnest as their PMI gauges continue to show strong expansion.  However, I do not believe this to be sustainable,  many experts are predicting a return of export growth to carry the economy.  I don't believe that it will return to the same levels as before, this will be pivotal. 
 
 
So it took about half a year for big name strategists/economists to figure out the obvious.  There's no V-Shaped Recovery coming.  I am still on the side of a surprise "double dip" recession for 2H of 2010...maybe even as early as Q2!
 
 
Ricardian Equivalence is still in play and will be for the long-term.  Unfortunately the upper class has been one of the demographics that was least scathed.  Reason?  Generalizing a little (I admit), but for the most part, the wealth of the affluent is tied into the stock market, not their home.  Rising taxes over the course of the next couple of years will reduce spending from this cohort...another little tidbit is that this demographic accounts for (approx 38%) of consumer spending (See Table 1: Average Annual Expenditures).  Any increase in taxes on this demographic will have adverse consequences and is a longer term story.  
 



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