Pragmatic Capitalism

Practical Views on Money & Finance


Credit Suisse is still very bullish.  In a recent strategy note they highlighted 4 reasons not to let the bears get you down:

1) The outlook for corporate spending
Corporates are underinvested, with free cash-flow as a proportion of GDP at a record high of 4% of GDP and the investment share of GDP at a record low.

2) The outlook for employment
Our US employment model is consistent with jobs gains of about 100-125K per month in the US (equivalent to 1.2% growth in employment and roughly a 2% increase in consumption on an annual basis, assuming no change in the savings ratio and a slight increase in hours worked).

3) US housing affordability
Housing affordability in the US is high – and it is therefore hard to see a sharp downwards movement in US house prices (even though they may fall 5% in the second half of the year, according to our US homebuilding analyst Dan Oppenheim).

4) China should have a soft landing
We think China will have a soft landing, given that:
a) Inflation is abating

b) A fall in house prices is manageable

c) Long-term growth prospects are intact

Source: CS

Got a comment or question? Feel free to contact Cullen via email here or on Twitter here.
Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering asset management, private advisory, institutional consulting and educational services. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

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