Notes From the Fieldby Martin Weil

September 29, 2013

Reasons To Be Optimistic

The WashPo’s Wonkblog writes that household formation is on a steady rise. If sustainable, this is hugely inportant for the US economy. Back before the financial crisis, my former economics professor, Ed Leamer, presented a paper to the gathering at Jackson Hole claiming that as goes housing construction, so goes the US economy. This was not, and is still not, conventional wisdom. But Ed knows his data and if home building is rebounding, then I suspect a stronger recovery may be around the corner. This is also the position taken by Goldman Sachs, as I learned from a breakfast meeting this week.

Supporting the potential of economic Deleveraging-800x565growth, along with new household formation, is the continuing decline in private debt ratios. These have been steadily improving since the financial crisis and look to be headed back to the more normal levels last seen in the 1980s and early 1990s.


Return to main page
© Copyright 2020 MW Investment Strategy All rights reserved. Site Credts
Site Credits

Site Design
Tracey Lebedovich

Andrea Scheve
Martin Weil

Jim Erickson
Kelvin Geis