But therein is the seed of my concern. The rate of consumption in the U.S. has been higher than the rate of salary growth and higher than the rate of borrowing. It means people are dipping into savings. What we have is a somewhat precarious situation. The U.S. stock market has gone up.
People feel better off.
They have consumed more. This has given another twist to the virtuous cycle. But you don't have to be a genius to work out that if it turns around and the stock market turns around, then the whole thing unravels. Our best guess is that U.S. consumption will slow a bit. The concern is that the stock market could react badly to poor earnings estimates and come off by 1,000 points or so.