Home

Try YouTube in a new web browser!
Download Google Chrome

He described a recent trip to Temecula, California:

Hes the inventor of what we at BI call "The Scariest Jobs Chart Ever" which shows how this jobs recovery compares with other post-recovery comebacks. In a 30-minute conversation with Business Insider, he explained how charting these numbers every single month for nearly 8 years has allowed him to "let (the data) tell you a story," and accurately track each twist and turn weve seen during this historic period for the U.S. economy. Because hes been so uncannily good at assessing the state of the economy, we had to get his take on whats coming next. Despite some concerns about the Fiscal Cliff, and the omni-present threat of a Europe blowup he says " Im not a roaring bull, but looking forward, this is the best shape weve been in since 97 ." Underpinning his optimism is the fact that the State & Local bust will no longer be a drag in 2013, and that the housing turnaround story has a long way to go and is more robust than anyone would have expected, particularly in the hardest-hit areas. "Temecula is a little inland city in southern California, written up as one of the disaster areas of the housing bust. And its a long commute to anywhere for work, so high gas prices kill them too. But I drove out there not long ago to see a friend who lives out there, and theyre starting to build again. And the local mall about a quarter of a mile from his house that was built during the boom that was all empty stores - its completely full. We went there for dinner and it was packed."


That leads him to another shocking claim: It wont be long before California (!) has a balanced budget again. His general outlook is also quite optimistic, and he explained why he doesnt get seduced by the gloom mentality: Youve been around long enough to know that theres a whole industry of gloom and doom, that the ZeroHedge mentality kind of guys. Im almost 60 years old. All my life theres been people telling me that the worlds gonna end for this and that reason in the next few years. I dont think so, I think things are getting better in general. And theres reasons for that. Theres good technology, Im talking to you on a cellphone today that I couldnt even imagine when the first cell phone came out. I tend to be positive about the future. I was telling people, when I started my blog in January 2005 that I wasnt a doomer. This has allowed him to avoid traps that have snared other economists. He describes an early disagreement with David Rosenberg, the well known Canadian bear, who was previously at Merrill: I remember when I wrote a post - I think it was in January of 2009 - you know who David Rosenberg is - he wrote a commentary back when what he wrote was free. and Im pretty sure about the timing that auto sales were going to collapse a lot further, and he had some arguments on it and I went and looked and thought " auto sales also cant go too much further, people have to replace their cars ." And so I wrote this article that says look, auto sales are near the bottom - we were at a 9 million annual rate then- I said theres just no way - we have to be selling 12, 13,14 million because people need new cars every 5-7,8 years. It was a simple, but correct way of thinking about things.