...despite a plethora of happy talk, consumers remain in a reasonably sour mood. How could it be otherwise when, as the invariably insightful and plucky Stephanie Pomboy in her latest MacroMavens screed points out, even those lucky souls who still have a job and a house are spending something like $618 billion more than they make, digging deep into their savings to help bridge the gap. By way of evidence, she cites the "alarming downtrend in bank deposit growth over the last year," with deposits now growing at their slowest pace since the recession of 2000.And, from December 15, via Lawrence C Strauss, Pomboy says:
In terms of nominal GDP, I see it being around 1% for a long time, five years for sure. One thing to consider is that after the dot-com bubble burst, it took the corporate sector five years to get back to the 2000 peak for capital expenditures, and employment never got back to that level. And the tech bubble was nothing as a share of total assets compared to housing on household balance sheets. This is so much larger. If it took the corporate sector five years to recover from the bursting of the dot-com bubble, to suggest that it would take five years for consumers to recover from this seems like a very conservative call.