{"id":31631,"date":"2018-02-26T08:05:18","date_gmt":"2018-02-26T13:05:18","guid":{"rendered":"http:\/\/olduvai.ca\/?p=31631"},"modified":"2018-02-26T08:05:18","modified_gmt":"2018-02-26T13:05:18","slug":"the-myth-of-sound-fundamentals","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=31631","title":{"rendered":"The Myth of Sound Fundamentals"},"content":{"rendered":"<div class=\"row \">\n<figure class=\"columns image image--lead image--ratio-2-1\"><picture class=\"fbg-image__element\"><img decoding=\"async\" class=\" lazyunload lazyloaded\" src=\"https:\/\/webapi.project-syndicate.org\/library\/5bfacaeff4a5946d78094da6d045b28a.jpg\" data-src=\"https:\/\/webapi.project-syndicate.org\/library\/5bfacaeff4a5946d78094da6d045b28a.jpg\" \/><\/picture><span class=\"image__copyright\">Cem Ozdel\/Anadolu Agency\/Getty Images<\/span><\/figure>\n<\/div>\n<div class=\"row fbg-image article__container\" data-sticky-target=\"interaction-article\" data-page-area=\"article-top\" data-sticky-offset=\"20%\">\n<h3 class=\"small-12 medium-10 medium-offset-1 large-8 large-offset-2 xlarge-7 columns article__title article__title--main u-mb-se\" dir=\"ltr\"><a href=\"https:\/\/www.project-syndicate.org\/commentary\/america-low-saving-rate-weak-fundamentals-by-stephen-s-roach-2018-02\">The Myth of Sound Fundamentals<\/a><\/h3>\n<div class=\"small-12 medium-10 medium-offset-1 large-8 large-offset-2 xlarge-6 xlarge-offset-3 columns\">\n<section class=\"u-mt-se\">The recent correction in the US stock market is now being characterized as a fleeting aberration \u2013 a volatility shock \u2013 in what is still deemed to be a very accommodating investment climate. In fact, for a US economy that has a razor-thin cushion of saving, dependence on rising asset prices has never been more obvious.<\/section>\n<section class=\"article__body article__body--commentary english\" dir=\"ltr\" data-page-area=\"article-body\">\n<p data-line-id=\"15e6ad26ff264354892d5e069414680b\">NEW HAVEN \u2013 The spin is all too predictable. With the US stock market clawing its way back from the sharp correction of early February, the mindless mantra of the great bull market has returned. The recent correction is now being characterized as a fleeting aberration \u2013 a volatility shock \u2013 in what is still deemed to be a very accommodating investment climate. After all, the argument goes, economic fundamentals \u2013 not just in the United States, but worldwide \u2013 haven\u2019t been this good in a long, long time.<\/p>\n<p data-line-id=\"1099bafd5d454406a35b455e6ff4ee09\">But are the fundamentals really that sound? For a US economy that has a razor-thin cushion of saving, nothing could be further from the truth. America\u2019s net national saving rate \u2013 the sum of saving by businesses, households, and the government sector \u2013 stood at just 2.1% of national income in the third quarter of 2017. That is only one-third the 6.3% average that prevailed in the final three decades of the twentieth century.<\/p>\n<p data-line-id=\"2378e4d8a6b5424089ae2019a2a055c0\">It is important to think about saving in \u201cnet\u201d terms, which excludes the depreciation of obsolete or worn-out capacity in order to assess how much the economy is putting aside to fund the expansion of productive capacity. Net saving represents today\u2019s investment in the future, and the bottom line for America is that it is saving next to nothing.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<\/section>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Cem Ozdel\/Anadolu Agency\/Getty Images The Myth of Sound Fundamentals The recent correction in the US stock market is now being characterized as a fleeting aberration \u2013 a volatility shock \u2013 in what is still deemed to be a very accommodating investment climate. In fact, for a US economy that has a razor-thin cushion of saving, [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[13875,4148,1180,18964,8402,16188,5024,2442],"class_list":["post-31631","post","type-post","status-publish","format-standard","hentry","category-economics","tag-economic-fundamentals","tag-market-correction","tag-myths","tag-national-savings-rate","tag-project-syndicate","tag-stephen-s-roach","tag-us-equities","tag-us-stock-market"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31631","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31631"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31631\/revisions"}],"predecessor-version":[{"id":31632,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31631\/revisions\/31632"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31631"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31631"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31631"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}