Guest Post: What Could Possibly Go Wrong?
January 23, 2013 - 11:47am
Via John Aziz of Azizonomics blog, Uber-bullishness is the order of the day in the markets. Last week we noted that the DJIA has climbed to a new post-2007 high. And now, the “fear index” VIX is hitting lows (as we discussed in depth last night): Popular commentators like Bill McBride are declaring the era of crisis to be almost over: It looks like economic growth will pickup over the next few years. I’ve written about this before – a combination of growth in the key housing sector, a significant amount of household deleveraging behind us, the end of the drag from state and local government layoffs (four years of austerity nearing the end), some loosening of household credit, and the Fed staying accommodative (with a 7.8% unemployment rate and inflation below the Fed’s target, the Fed will remain accommodative). While there has been recovery in metrics like in...
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