Investors Are Getting a Little Too Happy For My Taste

I don’t want to turn into a total Cassandra about the economy, but the Wall Street Journal isn’t providing me any comfort:

December 13: Everyone is giddy. “Forecasters are increasingly optimistic the U.S. economic expansion could continue beyond the 2020 presidential election….Most of the private-sector economic forecasters surveyed in recent days by The Wall Street Journal said the odds of a new recession by late 2020 were below 50%. The average probability of a recession in the next year was 14%.”

January 4: Even the bears are giving up. “Jeremy Grantham, a skeptic of the U.S. stock rally, said this week that investors ought to brace for explosive short-term stock gains….He is the latest high-profile investor and market strategist to change their stance in recent days, as some of Wall Street’s most closely-followed seers have tried to come to grips with the continued rise in stock prices.”

January 8: Hedging is for wimps. “After a long stretch of stock market tranquility, more investors are concluding that paying for hedges to protect against any sudden downturn is a waste of money….‘I haven’t seen hedging activity this light since the end of the financial crisis,’ said Peter Cecchini, the New York-based chief market strategist at Cantor Fitzgerald.”

January 8: Borrowing is all the rage again. “U.S. consumer borrowing posted the largest monthly gain in 16 years, buoyed by increased consumer confidence in the economy. Outstanding consumer credit rose by $27.95 billion in November from the prior month, the biggest increase since November 2001, according to new data from the Federal Reserve.”

These are the kinds of behaviors that become common just when things are about to turn around. The key problem, of course, is defining “about to.” When GDP starts bumping up against potential GDP—which is happening now—that’s an obvious danger sign. But that can mean a recession is anywhere from a few months to three years away:

You pay your money and you take your chances. I’m less giddy than most, but I don’t know anything more about this stuff than you do.


The more we thought about how MoJo's journalism can have the most impact heading into the 2020 election, the more we realized that so many of today's stories come down to corruption: democracy and the rule of law being undermined by the wealthy and powerful for their own gain.

So we're launching a new Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption. We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We'll publish what we find as a major series in the summer of 2020, including a special issue of our magazine, a dedicated online portal, and video and podcast series so it doesn't get lost in the daily deluge of breaking news.

It's unlike anything we've done before and we've got seed funding to get started, but we're asking readers to help crowdfund this new beat with an additional $500,000 so we can go even bigger. You can read why we're taking this approach and what we want to accomplish in "Corruption Isn't Just Another Scandal. It's the Rot Beneath All of Them," and if you like how it sounds, please help fund it with a tax-deductible donation today.

We Recommend


Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.


Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.