I’ve long predicted that the balance sheet recession was likely to come to an end somewhere around 2013/2014 and it looks like the de-leveraging process in the USA has certainly slowed. This excellent chart from Morgan Stanley (via Joe W) shows how the de-leveraging has improved over the years. Unfortunately, we’re not quite at a point where the public sector can hand off the baton yet. We still have some work to do so we’re likely looking at something closer to a 2014 hand-off of the baton. Of course, that’s assuming the fiscal cliff doesn’t torpedo the private sector recovery right when it looks like it’s starting to catch its footing….
Source: Morgan Stanley via Joe Weisenthal