NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.
Among the posts this past week was an entry about the global economic recovery.
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The Global Economic Recovery Is Foundering
From my "15 Surprises for 2014":
"Surprise No. 1: Slowing global economic growth and fears of stagflation emerge.
"At the core of this year's surprise list is that the U.S. economy disappoints (with domestic real GDP growing at +1.75% or less, half the expected rate offered by the consensus) relative to consensus expectations. Many (e.g., Harvard's Martin Feldstein) are worried about the economy overheating, but global growth also fails to meet forecasts (and is only +2.5% against consensus forecasts of +3.6%+).
"The case for slowing growth is not necessarily quartered and dependent on rising interest rates. Rather, central to my surprise is a "spent-up not pent-up" consumer whose fragility may be exposed and an uptick in economic inequality as trickle-down policy grows increasingly ineffective.
"The recent rise in unemployment claims, higher gas prices, slowing population growth, the higher costs of health care, slowing retail sales and a pause in domestic automobile and housing activity likely presage that slowing growth is in store for 2014.
"U.S. real GDP growth is under 2%, and worldwide growth is under 3%, making the difference between anemic growth and recession increasingly one of semantics. (Note: The U.S. stock market has a forward P/E ratio of nearly 17 with a 2% real GDP growth rate, while China has a forward P/E ratio of about 7.5x with a 7% real GDP growth rate.)