Here in New York the restaurants are full, and just try to get into Century 21, a department store for luxury items at cut-rate prices, because you will have to elbow your way through throngs of folks who are non-English speaking... Indeed, not only are foreigners transacting in cash, but many Americans are doing the same after having been burned by debt in the 2008-09 credit crisis. Therefore, I continue to believe the economy is stronger than most think.
I believe GDP numbers will improve to 2.5% to 3.5% in 2014, which should be the "sweet spot" for equities... When economies grow at a GDP rate of 7%, 8%, 9% - that is when bubbles develop. I think 2.5% to 3.5% GDP growth is actually the sweet spot for the equity markets; and everyone is underinvested for that simple and sustainable growth rate.
~ Jeffrey D. Saut, December 5, 2013 note to clients, as reported in Barron's "Market Watch," p. M16, December 9, 2013