I ran across this interesting chart (see below) at Barry’s site via BusinessWeek. It shows the expected forecasts for the economy in the coming 4 years. You’ll notice an interesting upside bias in the picture. And although the economy has been “depressed” during President Obama’s first four years it has been growing.
This “math” thing is all the rage lately so let’s back out and look at the history of US expansions before we jump to conclusions based on the guesses of guys whose firms thrive in bullish economic environments.
Since 1850 there have been 33 economic expansions. These 33 expansions averaged 37 months or 3.1 years.
But the expansions in the US economy have increased in length as the US economy has matured. Since 1945 the average expansion has lasted 56 months or about 4.65 years. If we want to get really narrow, the last 3 expansions have been even longer at 93 months or just shy of 8 years.
We’re now in month 38 of our economic expansion which means we’ve reached our maturity date using the long-term averages. We’re still about 18 months outside of a recession using the post-war era data. Obviously, these are averages, but the bottom line is, the odds of going 8 full years (both Obama terms) without another economic contraction are extremely low. That doesn’t mean it can’t happen, but my guess is President Obama’s second term won’t be quite as friendly to him as his first….
Read Some Related Articles on Pragmatic Capitalism -
There Isn't $10.8 Trillion "Stuffed Under Mattresses" Because of QE
I have to comment on this MarketWatch piece because I've now seen a number of people comment on it claiming that consumers are choosing to hold more low interest bearing ...read more
Rail Traffic Keeps on Chugging Along
Intermodal rail traffic posted a 5.4% gain in the most recent week bringing the 12 week moving average down to 6.1%. That is a strong reading, but also a 3 ...read more
Is the Global Financial Asset Portfolio the Perfect Indexing Strategy?
If there was such a thing as an indexing purist that person would simply buy all of the outstanding available financial assets in the world and call it quits. In ...read more
All-Time Highs in the Stock Market are Perfectly Normal
“If you think the market’s “too high” wait ’til you see it 20 years from now.” – Nick Murray ...read more