Apocalyptic soothsaying is in.
Pundits. Economists. Religious leaders. Like a Louis Vuitton handbag, everyone seems to be sporting a tale of inevitable doom . The perfect accessory for every occasion.
One might think that we are racing towards The Rapture at warp speed.
Consider Saturday, May 21.
The family and I had just returned from a sweaty, Midwestern grill-a-thon. Justin Timberlake was hosting SNL. The aromatic poetry of beer and bratwurst permeated my memory like a favorite song.
At 11:35 pm, Timberlake and Sandberg were belting out the words to their latest ode to hilarity (click here to see that). Suddenly, I I realized that I had but 25 minutes to live.
I glanced at my sleeping bride. I thought of my two young sons. The unfinished Bucket List items... climbing K2. Learning Mandarin. Flying Hooters Air.
At 11:59 pm I yanked the covers over my head. Staid my tears. And braced for the inevitable.
Sunday morning at 7:17 am my three-year old hit the bedroom door like a linebacker, shouting something about lizards and pancakes.
Then it hit me. Time to get a grip. We're not going anywhere.
But what about the national debt?
We face quite a pickle with regards to the debt situation. Anyone with any awareness of the U.S. government's real financial situation knows that time is running out.
The government admits to $15.5 trillion in debts. But, when those debts are calculated under Generally Accepted Accounting Principles (GAAP), the same standard to which we hold our companies, the debt balloons to over $70 trillion.
$70 trillion divided by 300 million-plus Americans equals $233,000 per person. $233,000 in U.S. federal government debt owed by each of my sons, my wife and I. $932,000 owed by the family.
That does not included personal, state or municipal debt.
How do we pay that off? It's going to be difficult. But we'll figure out a way. And, contrary to what the Dr. Doom says on CNBC, or in his latest book, we have some time to get our house in order.
Beyond that? From where I stand, things don't seem so bad.
Real GDP, while less than hoped for, has expanded for seven straight quarters. Corporate profits are at record highs. Consumer spending is $450 billion above levels in 2008. Private sector payrolls have expanded for 15 consecutive months.
The market may be concerned about the conclusion of QE2. But, at some point, we have to snip the umbilical cord and see if the baby can breathe. All of these artificial injections and stimulus programs have not been as helpful in action as they appeared in conception.
2008 was not on the Mayan Calendar. It was a crisis of government policy. The housing bubble was caused by low Fed rates and subsidies. The panic was caused by a series of bad reactions to the end of the housing bubble.
And today, much of this current softness is spillover from the Japanese disaster and related manufacturing disruptions. The disastrous weather in the Midwest has negatively impacted an already disastrous housing market.
But, surprisingly, the Dow Jones Global Real Estate Index is up nearly 10% on the year. Could the U.S. market be far behind? The bottom is out there.
When Japan's manufacturing sector is back on track and the U.S. auto companies are back on line, GDP will rise accordingly.
The Fed will continue to suppress interest rates, another positive sign for equities. This looks like a temporary lull in an otherwise upward trajectory.
And when we find that no longer to be the case, we change our tune. But for now, stick with growth equities, mid-caps, industrials and select emerging markets. Let our bonds and other yield-driven instruments work on our behalf.
And put the box of bullets, baked beans and bottled water away. This world will someday end. But the current prognostications of its demise have been vastly exaggerated. Stay tuned.