This week we continue the theme begun last week—examining the economy and the stock market as we turn the page on a New Year.
This week we present three articles that in varying degrees, address the economy and markets from different angles. The first article compares present conditions to those that existed prior to the last run-up in house prices and stock prices. The second article reports on the U.S. spending bill that signals divided government is prepared to co-operate and pass a budget. The third article further illuminates the jobs report of January 10, which sent mixed signals about the state of the economy.
Don’t fret about soaring asset prices—this time is different. Despite rising house prices and stock indices breaking records, don’t worry. This time really is different. “What matters for economic stability is not the level of asset prices, and their subsequent deflation, but leverage and contagion….loan to value ratios are rising again, but not yet to levels that are remotely dangerous…the upturn in the business cycle in the US and the UK