U.S. Consumers: Still Key to the Outlook by John Mauldin
(Excerpted from the April 2012 edition of A. Gary Shilling’s INSIGHT)
In the Dec. 2011 issue of my Insight newsletter, I wrote: “In the U.S., major new fiscal stimulus is on hold, and monetary policy is impotent. State and local spending, housing, inventory investment, capital equipment investment and commercial construction are likely to remain subdued. U.S. exports are curtailed by sluggish foreign economies. So U.S. growth in 2012 will be decided by consumer spending, 71% of GDP. With declining real wages and incomes and low confidence, continuing strength in outlays is unlikely. A 2012 U.S. recession is probable, but milder than the 2007-2009 nosedive, unless another financial crisis unfolds.”
What Kind of Investor Are You? 
For some the answer to this question is fairly simple and straight-forward, for others the answer may not be as clear which could possibly lead them to a series of trial and errors as they try various investment strategies on for size. Observing this over the years I have found the investors with the greatest amount of confidence when answering this question also have a keen sense in answering the question: How well do you know yourself?
Investor Education – Lunch and Learn
Keep up to date with financial markets by visiting us at one of our many educational events.
Click here to Learn More and to RSVP to our Next Event
Other Articles from Useful Resources
 While the news is good at telling you what has already happened, Minyanville’s writers pride themselves on telling you what may happen, providing you a sharper edge in getting ahead of the investment curve.Check out some of the most recent article for yourself by clicking the links below.
Which Fast-Growing Tech Is a Screaming Value? This company has weathered just about every economic storm to hit tech stocks over the past few decades, and has always come back strong — and this time is no exception. Will European Elections Trigger the Next Phase of the Global Financial Crisis? Europe is falling apart, there’s gridlock in Washington, and the US economy grew at an anemic 2.2% pace last quarter despite more than $10 trillion in stimulus. Still, there’s an age-old adage on Wall Street that the reaction to news is more important than the news itself—and despite a steady dose of dour news, the S&P and NASDAQ are both enjoying double-digit gains this year Why the Expiration of the Bush Tax Cuts Would Be an Implicit Austerity Measure There was only one other time that tax revenues as a percentage of GDP grew materially faster than GDP, and that was during World War II. So How Much Has the Fed Twisted Up Treasuries? Minyanville breaks down the Fed’s holdings and purchases of Treasuries and assesses the feasibility of extending Operation Twist. |
 The Daily Reckoning provides over half a million U.S. subscribers with literary economic perspective, global market analysis, and contrarian investment ideas.The Daily Reckoning aims to make each article the most entertaining 15-minute read of your day.Check out some of the most recent articles below.
The Return of Cheap Oil? 05/03/12 Sea Island, Georgia – Will new energy discoveries and new technology sink oil prices? Will lower oil prices rescue the world from the Great Correction? Examining the Long-Term Benefits of Gold Investing 05/02/12 Buenos Aires, Argentina – Dow down, but only by a bit. Gold off, but only by a touch. Oil lower too, but just by a smidge. Eurozone Economy Slows Down 05/02/12 St. Louis, Missouri – Good day. Strangeness all around, folks. The U.S. government continues in their effort to make us all feel better, so we go out and spend, spend, spend. We have that to talk about today, along with the regular risk-on/risk-off discussion. The sun finally came out yesterday, which always makes me feel more alive
A Visible Chinese Recovery The maxim of “sell in May and go away” has worked well in the past two years, and many investors are likely planning to revisit this strategy for a third year. After all, we have had soft economic data around the world, from weak exports in Asia to record unemployment in Europe, and there are quite a few uncertainties on the horizon, from fiscal cliffs in the US to Debt Traps in Europe. However, against these murky seas, we see high visibility in China’s economic recovery. And given that no one has prepared for it, betting on a China out-performance makes sense… US Corporate Profits: On The Roof Or In The Stratosphere? One of the biggest weights on US equity prices is, ironically, record profits. Based on the maxim that nothing good lasts forever, the fear is that record margins will inevitably be taken down a peg. A popular way to illustrate the situation is to show corporate profits’ “share” of gross national income (product). As the red line in the first chart below shows, the corporate profits to GNI ratio has gone through the roof recently. Many commentators argue that a return to the mean implies a very large fall—with obvious consequences for the equity market… |
GaveKal is one of the world’s leading independent providers of global investment research. The firm’s unique culture prizes thinking, debate, listening and accessibility. Check out some of the most recent articles below.
The Compass is an information source for the individual investor.