Tuesday, March 13, 2012

The Dismal Obama Normal: Paranormal

To compensate for the gap between the past 10 years' actual performance and the 80-year mean growth rate of 3.5%, the coming decade should deliver growth at a 5.3% clip. The general acceptance of sub-par growth is an under-reported story that will have serious consequences. 

There is recognition that "the New Normal" properly characterizes today's era, meaning we are bending the mean down in the aftermath of Lehman 2008 while our markets supposedly embark on a semi-permanent deleveraging process. This strikes me as too anodyne a term to describe a decade-long period of slow growth and near-zero interest rate on savings accounts. Bill Gross of PIMCO is asking investors to consider using the metaphor Paranormal, in reference to a universe in which no amount of liquidity makes lenders want to lend, and no one can afford to save.
...We need the visionary Newt model. Energy=JOBS.

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