from Wolf Street:
Expectations run high for the US economy to experience an acceleration from the paltry 2% per year GDP growth we’ve had since the crash. Surveys record optimism among purchasing managers, builders, and consumers. Manufacturing remains strong, and there are even hints of the long-awaited capital expenditures boom.
But dark spots muck up the picture of the engines that have been driving this slow growth of the US economy. Among them:
The unsustainable nature of auto sales. They have been powered by mad long-maturity loans with sky-high loan-to-value ratios to sub-prime borrowers — a boom that is already causing regulators to fret and is almost certain to end badly. Any decline in sales will hit auto production.
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