Had the pleasure of hearing Mark Zandi, Chief Economist of Moody's Analytics, at The National Economists Club. He outlines 5 reasons why he is optimistic about the US economy.
1) The De-leveraging process if over. Corporate balance sheets are very strong and corporations are starting to re-lever. Banking core capital ratios also a strong 9.2% Households have also de-levered and delinquency rates are at the lowest in decades.
2) Housing. Mark thinks housing will take off in 2013 and housing starts will jump from 850k to 1.75MM over the next few years. He mentioned that supply side constrains may impede this.
3) US Businesses competitive. Productivity is up and unit labor costs are down.
4) Fiscal Progress. Sees the Debt/GDP ratio stabilizing.
5) Threats are less threatening. Mentioned threats were Iran and oil prices and interest rates rising faster than expected. He was concerned about income and wealth distribution.
