The More they Stay the Same

Nigel from June 2007:

The "Goldilocks" economy is showing no signs of leaving and stock market bears and housing bears are getting sick of waiting outside.

Housing numbers are proving to be challenging for sure. This is no record breaking year, but no collapse either. Meanwhile the equities markets are breaking new records almost everyday. That big drop-off that occurred at the end of February has recovered and then some!

Jobs are good with unemployment near record lows and inflation is only pushing a little. Fuel prices have jumped through the roof, but it doesn't seem to be making that much of an impact. The bond markets are seeing yields increase which is pushing up mortgage rates to the highest they've been for several years. All this mixed economic data, but we're still, for the most part, doing well.

Welcome to the Goldilocks economy where despite economic numbers being scattered all over the place, most people are doing just fine.

I don't mean to be all "Pollyanna" in this post. There are some scary scenarios forming that could harm the economy and our way of life. Think about the last time this country was in an unpopular military situation, with an unpopular President, record high gas prices and rapidly increasing mortgage rates. Yes folks, it could be 1979 all over again.

Or we could be on to something new and different. The world is much different now politically, economically and technologically than in 1979 and burgeoning economies in China, India and Eastern Europe make 2007 a much different place and opportunity than that of 28 years ago.

Yes, we could be sitting on the eve of destruction with bears ready to pounce, or we may have Goldilocks with us for quite some time. I'd prefer the latter. How about you?

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Plus ça change, plus c'est la même chose.