Posted by
Message
Azazello
Duke Fan
Durham, NC
Member since Sep 2011
2411 posts

What is your take on the current economy?
Stock market smashing records
GDP ~3% growth
Unemployment ~4%
Interest rates ~1.5% (and rising)

then...

Leverage ratios across the street are insanely high
Massive consumer debt
Massive student loan debt
Massive auto loan debt


Feels shaky. Thoughts?


HailToTheChiz
Auburn Fan
Back in Auburn
Member since Aug 2010
25286 posts

re: What is your take on the current economy?
Ride the wave until it crashes into the shore


Replies (0)
Replies (0)
130
jimbeam
USA Fan
University of LSU
Member since Oct 2011
48012 posts
 Online 

re: What is your take on the current economy?
It's never going to end weeeeeeee!!!


Replies (0)
Replies (0)
91
Doc Fenton
LSU Fan
New York, NY
Member since Feb 2007
52562 posts

re: What is your take on the current economy?
I've been bearish on the market for a couple of years now, so I'll go ahead and give my quick take.

quote:

GDP ~3% growth
Unemployment ~4%
Interest rates ~1.5% (and rising)


Yeah. You could argue that things like this look like the peak of something, and due for reversion to the mean, except the real GDP growth really isn't that unusual. I think the latest projections are for annual real GDP growth for 2017 to be right around 2.7%, so there's not a whole lot unusual here.

quote:

Massive consumer debt
Massive student loan debt
Massive auto loan debt


I would argue that there's not too much shaky here either. Yes, the amount of outstanding student loans has sharply increased in recent years, but it's still small relative to mortgages and other forms of debt.

If you're looking for signs of upcoming deterioration in credit, a lot of people have been pointing toward subprime auto loans as a potential canary in the coal mine. Maybe it's a sign of more coming credit deterioration, but then again, maybe it's not. Right now, it doesn't feel like a big deal.

quote:

Stock market smashing records
Leverage ratios across the street are insanely high


This, however, is a big deal, and why I've been bearish the last couple of years. There are no strong signals that a market correction is coming anytime soon, but man, the spring is loaded for a gigantic crash sometime over the next several years. Something big is coming, I think, based on historical folly in overall global monetary policy. However, it could be a while before we see a trigger. Nobody knows the timing of it.


Huey Lewis
LSU Fan
BR
Member since Oct 2013
2178 posts

re: What is your take on the current economy?
I also think there could be a downswing sometime in the future. But until then the market could keep going up. Eventually though the market will be down at some point but will go back up sometime after that.


Dayman
Member since Sep 2015
501 posts
 Online 

re: What is your take on the current economy?
quote:

I also think there could be a downswing sometime in the future. But until then the market could keep going up. Eventually though the market will be down at some point but will go back up sometime after that.


Lol


Replies (0)
Replies (0)
20
The Spleen
Alabama Fan
Member since Dec 2010
21944 posts

re: What is your take on the current economy?
I tend to think it's in a precarious situation. If the tax bill gets passed, I think it will stave off any catastrophe in the short term, but will make the crash even worse in the long term.


Replies (0)
Replies (0)
22
lynxcat
Rutgers Fan
Member since Jan 2008
19318 posts

re: What is your take on the current economy?
I’m less concerned with the slow growth and more concerned with he debt burden across all facets of life.

I don’t think the debt becomes a deal breaker for another decade or two but it will be a Great Depression level shock to the economy when it folds.


TigrrrDad
Member since Oct 2016
2609 posts

re: What is your take on the current economy?
quote:

I also think there could be a downswing sometime in the future. But until then the market could keep going up. Eventually though the market will be down at some point but will go back up sometime after that


While this can be taken as sarcasm or stating the obvious, it really is that simple. So what makes investing so difficult? Is it too many people trying to use the market for big short term gains? Fear that it will bottom out on the day before you retire? Too many trying to time the market? Too many speculators vs. investors? Too many who just panic and sell low despite the certainty that the market will always go back up? I’m just getting ready to jump into the market, but I’ll dollar cost average about a half million over the next dozen or so years, all in a target date or 3-fund portfolio. And I really have no major concerns.

ETA: For the record, the extent of my investment knowledge is zero investing experience and I once read the book “A Random Walk Down Wall Street.” But I did stay at a Holiday Inn Express last night...
This post was edited on 12/7 at 9:15 am


Replies (0)
Replies (0)
00
Azazello
Duke Fan
Durham, NC
Member since Sep 2011
2411 posts

re: What is your take on the current economy?
quote:

more concerned with the debt burden across all facets of life.



This is what bothers me. It wasn't all that long ago that a 3-year auto loan was the standard. Now, you regularly see cars being financed 5-8 years (and the prices have shot up as a result). This combined with mortgage debt, credit card debt, massive student loans, etc., is a disaster in the making.

I also look at this:

Image: https://static.seekingalpha.com/uploads/2017/10/18/saupload_US-Corp-Debt-Issuance-Exhibit-4.jpg





The Spleen
Alabama Fan
Member since Dec 2010
21944 posts

re: What is your take on the current economy?
quote:

It wasn't all that long ago that a 3-year auto loan was the standard. Now, you regularly see cars being financed 5-8 years



Well, cars last a lot longer than they used to as well, so it sort of makes sense. I always finance mine as long as they'll let me, but pay like it's only financed for 2-3 years. Obviously, not everyone does that.

Though I do agree that overall consumer debt is a major problem.


baldona
Auburn Fan
Florida
Member since Feb 2016
6170 posts

re: What is your take on the current economy?
The market and economy always has dips, and there's always a reason for that. Next up could be auto loans, hard to say. I don't see that causing a major dip as it would only be losses of $20k or so for people at the most.

There's always reasons to be bearish and bullish no matter how good or bad the economy is. Just don't adjust your investments too heavily one way or the other and you'll be fine.


Replies (0)
Replies (0)
10
Paul Allen
Notre Dame Fan
Boca Raton, FL
Member since Nov 2007
53236 posts
 Online 

re: What is your take on the current economy?
There was 72 month auto financing back in 1998 when I bought my first car. Long-term financing has been around for years.


Replies (0)
Replies (0)
11
Doc Fenton
LSU Fan
New York, NY
Member since Feb 2007
52562 posts

re: What is your take on the current economy?
A couple of remarkable news stories on the economy today...

Reuters: " U.S. household net worth $96.9 trillion in third quarter 2017"

From there you only need an extra 3.2% to get to $100 trillion, and the stock market has already increased by about 4.7% since the end of September, so we might have broken the $100 trillion mark already.

That works out to about $300k in average net wealth per citizen, and I'm pretty sure that we're reaching record levels of the wealth-to-income ratio in U.S. history.

CNBC: " LinkedIn report shows a 26% rise in November hiring"

This one is actually misleading though, because it's a year-over-year figure for just the month of November. Month-over-month, hiring dropped 2.2% after seasonal adjustments. It just goes to show that the back-half of 2017 saw significant growth in the hiring rate... which in turn would tend to lead the FRB toward more rate hikes, given that consumer inflation has picked up a little over the past few months.
This post was edited on 12/7 at 10:49 pm


Replies (0)
Replies (0)
11
first pageprev pagePage 1 of 1next pagelast page
refresh

Back to top

logoFollow TigerDroppings for LSU Football News
Follow us on Twitter, Facebook and Instagram to get the latest updates on LSU Football and Recruiting.

FacebookTwitterInstagram