While many continue to fret over GDP growth, employment levels, forclosure fraud, and a myriad of other concerns, Charles Schwab’s Liz Ann Sonders says it’s the fretting itself that may be the biggest impediment to market gains.
“I’m always most intrigued by the story that the least amount of people are telling, and the story people aren’t telling is really the optimistic story,” Sonders told CNBC at Schwab’s Impact 2010 investor conference. She sees reasons for concern, but overall thinks the economy is moving toward a “Goldilocks” state, one in which growth is moving along at just the right speed. “I frankly am happy that that we have a slow pace of growth right now, because it’s driven less by a profligate consumer,” she said. “What we want right now in my view is low single-digit growth with more of a business spending driver than a consumer driver.”
Overall, Sonders — whose calls of the start and end of the 2007-09 recession proved quite accurate — says she’s “quite optimistic,” according to AdvisorOne.com. “The economy is like a combustion engine — everything is there, we just need a spark,” she says, adding that the “underlying pillars of support you need are stacking up” in the housing market. Among those pillars: a drop in what she calls the “real” mortgage rate — the nominal rate minus the depreciation of homes.