As for the rest, we shall see. The world economy continues to grow at 5.2%. Businesses with solid profits and balance sheets have no problems finding willing creditors. Moreover, profits are much, much higher than predicted this quarter, which should, with some more consideration, make creditors even more willing to lend.
Now, are some residential lenders in deep trouble? No doubt. Are many homebuilders in duress? Again, no question, especially if those builders did a lot of business in California and Florida (and maybe Arizona.) Is the quuestion of “Who’s holding the bag?” still open? Again, no doubt, and that’s hurting all of the financials, both the guilty and the not-so-guilty. But I have to agree with Sam Zell – as long as corporate and personal incomes continue to rise, there’s really no imminent threat of a recession.
BTW, where are the individuals who predicted sub 1% annualized growth in the second quarter? I’m eager for those folks to explain their back of the envelope computations.
