The traditionally bearish Jim Grant sticks to his positive U.S. economic outlook in an interview with Consuela Mack. He points out how over-optimism usually results in over-pessimism, and that this is where we are now.
He believes that data will continue to positively surprise consensus into 2010, both in terms of broad macro numbers and that found from company reports. He uses the recent Caterpillar results and outlook as an example of companies performing far better than people expected.
He also highlights risk is mostly a function of price, not necessarily the type of asset. For example, thus U.S. treasuries might be riskier than stocks if the price has run on one yet collapsed on the other.
There’s also a lot more.
Start from 3:20 in the video, and watch from there.
“How zippy is the recovery?”
Mr. Grant: “Pretty darn zippy… The finest expression was that of a long seasoned economist, Pigou, a Brit actually, sounds French, the era of optimism dies in a crisis, which is followed by the era of pessimism, which is born not as an infant but as a giant.”
“How robust will the recovery be”
Mr. Grant: “I think it will surprise to the upside… I’m not going to give a number nor can I give a date.. but I think it will be surprisingly strong… the consensus is for our gross domestic product to grow 2.5% after being adjusted for inflation, I expect it will be much better than that.”
(Lead via Infectious Greed)