Wednesday, April 1, 2015

US Consumers will decide if economic conditions improve

As of December [2014] for me the major concern this year was the fact that we have Four big structural deflationary factors in the world: Debt, Demographics, Globalization, Technology. They are long wave things, they're not shifting anytime soon. On top of that is oil price which is cyclical, has been dis-inflationary, inflationary. 

To me this tells me we got another year of weak growth, weak final demand, so I think a lot of bullish expectations which were built into the market particularly the US Equity market and Global markets I think we are looking for final demand. And for me really the only source of final demand that matters is the US consumer. 

And if that doesn't pick up then why the hell would the Fed raise rates. We talked about the Fed hiking. If Q2 is as weak as Q1 and so far we're blaming Q1 on the weather again, its like the US is the only place which has weather in Q1. If Q2 is as weak as Q1, or doesn't show a significant improvement, we're going to price the Fed into late next year.