Conventional wisdom is probably useless from a direct investment standpoint, but there is value to knowing what conventional wisdom is. After all, that’s how you can identify the deviations from it.So, real quick, we thought we’d slice up the main nuggets of conventional wisdom right now based on what we’ve been seeing:
- The ECB, via the LTRO, has successfully backstopped European banks, and so a financial crisis now unlikely.
- Greece may or may not hard default, but either way, they’re a lost cause…
- … And after Greece comes Portugal. They’re screwed too.
- But nobody else is in huge trouble, really.
- The biggest risk this year is in the Mideast, especially in dealing with Iran.
- Obama is the favourite to get re-elected, provided Europe doesn’t blow up the US economy.
- The US economy will grow this year, but at a mediocre pace — just like 2011, probably.
- China will slow a little bit this year, but won’t crash.
- The US is staging the most impressive growth right now, as Europe/Asia still disappoint.
- There’s a big risk of hard fiscal retrenchment in 2013…
- … But Congress will step in and avoid the hard pain at the last second, like it always does.
- The US will basically have low rates forever.
- US equities are still in a secular bear market, and are priced for low returns.
Any objections or suggestions of what should be on the list?