Recovery: Coming to an economy near you.
By the second half of 2013.
Predicted by the same guy that predicted the recession a year ahead of it.
The key, he says: a successful fiscal cliff agreement. So long as a solid one is made, the economy will actually start to accelerate its growth in the second half of 2013. Apparently, so long as the government starts reducing its deficit and business continue to build surplusses, this thing will finally kick into gear.
This is a story on the interview Business Insider conducted with Jan Hatzius, but if you click through you can read the whole interview.
Goldman's Top Economist Explains The World's Most Important Chart, And His Big Call For The US Economy
Dec. 10, 2012, 8:59 AM
In a recent report, Goldman's top economist Jan Hatzius predicted that finally, the US would see a real growth acceleration in the second half of 2013.
There are three great reasons to listen to Hatzius:
1. He's the top economist at Goldman Sachs. That alone is a reason to take him seriously.
2. He called the economic downturn. Remember, he got pilloried in 2007 by Ben Stein for saying that housing was going down, and that the economic ramifications would be significant.
3. He has a framework for analyzing the economy that's rare among Wall Street economists.
At the core of his call -- which was made in a note titled The US Economy in 2013-2016: Moving Over the Hump -- was this simple chart:
The chart demonstrates a critical econoic concept: Government deficits (the grey line) are essentially the mirror image of private sector savings (the dark black line). When the private sector tries to save money aggressively (as happened during the crisis) the government deficit will inevitably explode (as happened). Periods associated with small government deficits (such as the late '90s) are associated with extreme private sector leveraging.
The key to understanding the economy, and forecasting growth, is to think about which sectors are increasing and decreasing their savings.
In a 30-minute conversation with Business Insider conducted last Friday, Hatzius explained:
And if there's no deal on the fiscal cliff, then there is major cause for worry. While things might be okay if a deal is agreed to early in January, the ongoing confidence shock as the fight wore longer into the year, would be a problem. If we go into February without a deal?
Hmmm another recovery summer.....where have I heard that one before?
From your fingertips to God's eye's
If at first you don't succeed, try, try again.
How does a recovery begin with the number of unemployed and no longer looking growing every month?
|All times are GMT -6. The time now is 11:04 AM.|
Powered by vBulletin® Version 3.8.8
Copyright ©2000 - 2017, vBulletin Solutions, Inc.