Pragmatic Capitalism

Practical Views on Money, Finance & Life


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

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.
Cullen Roche

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