January 8, 2018

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.

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WE CAME UP SHORT.

We just wrapped up a shorter-than-normal, urgent-as-ever fundraising drive and we came up about $45,000 short of our $300,000 goal.

That means we're going to have upwards of $350,000, maybe more, to raise in online donations between now and June 30, when our fiscal year ends and we have to get to break-even. And even though there's zero cushion to miss the mark, we won't be all that in your face about our fundraising again until June.

So we urgently need this specific ask, what you're reading right now, to start bringing in more donations than it ever has. The reality, for these next few months and next few years, is that we have to start finding ways to grow our online supporter base in a big way—and we're optimistic we can keep making real headway by being real with you about this.

Because the bottom line: Corporations and powerful people with deep pockets will never sustain the type of journalism Mother Jones exists to do. The only investors who won’t let independent, investigative journalism down are the people who actually care about its future—you.

And we hope you might consider pitching in before moving on to whatever it is you're about to do next. We really need to see if we'll be able to raise more with this real estate on a daily basis than we have been, so we're hoping to see a promising start.

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