Confusing Indicators of growth

Reading a number of report on forecast growth in the US economy, first is Bruce Krasting who has a good following and the other Artemis Capital Management.  Looking at their analysis produces two very divergent forecast:

Krasting is taking the view that the recent data (employment in particular) would lead to believe that 3% growth is on the cards for the U.S. economy.  Krasting has not fully bought the story (he's a bear like me) but data is data and as an ex-FX trader is agnostic on sentiments, he looks at hard numbers.

Artemis looks at different market factors, asset correlation, market volatility (especially the overall surface) and finally hard data on money supply -- which have been spiking of late.  He reads a risk of recession.

Part of the problem is that indicators are all over the place, as in all recessions.  Usually when looking at part recession we only remember the elements that "caused" the recession, forgetting data that did not fit that story -  because we know how the story ends.  Looking forward there are certain truth to the U.S. economy (they are true elsewhere but easily observable in the U.S. and more relevant to the Canadian economy).

1. America is in the middle of a massive deleveraging (willing or otherwise) process. First, because a massive debt binge has to eventually come to an end, but also because of demographic forces.
2. American housing problems are still at the core of the problem, and the asset pricing problem seems to be spreading from the sub-prime to the prime market (exhibit:  PrimeX pricing that is imploding -- an index for prime mortgages that is in free fall)
3. Consumption as a percentage of GDP is too high, and has to fall back to "historical" average.  In China, consumption is less than 35% of GDP, in Canada and OECD consumption is around 55% of GDP, in the U.S. consumption is 75% of GDP.  China and America are the outliers, and will revert to the mean -- eventually.
4. America's financial system is almost as dangerous as it was in 2008, in certain asset classes (derivatives) America's top 4 players have gross exposure of $350 trillion (more than 6 times the world GDP).  The European banking network is vastly over-leveraged -- contagion risk to the U.S. is extreme, and there is absolutely no way that a TARP 2.0 will be passed this time around (neither the Republican or the Democrats would vote to support another Wall Street bailout -- especially after Wall Street has been saying that they have no risk of collapse).
5. Demographic forces are playing havoc will the economic systems of OECD countries (including Canada), 10,000 American retire every single day... this will shift consumption patterns for years to come.  Not only are they retiring but their nest eggs have been decimated by the 2000 and 2007 financial crisis.  Now that they are being prudent and investing in fixed income, yields have collapsed.
6. The American underemployment problem will persists for at least a decade.  As long as America's economy doesn't re-balance its system.
7. U.S. money supply data seems to be indicating a recession
8. The absolute immediate risks facing the American economy is the collapse of the European banking system.  Several governments are now realizing that they will probably have to "nationalize' a number of their domestic banks (Dexia is the first of many).
9. A soft landing in China is possible, but unlikely.  Few government have the ability to engineer a controlled economic slow down.  Moreover, there are disturbing new trends emerging in the Chinese financial system -- such and bank deposit, that seem to disappear... the money is taken out but no outlets are being found.
10. It is increasingly evident that both Greece and Ireland will have to be let go from the Euro -- they just don't have the resources to repay their outstanding debt (never mind meeting their social contract obligations).  The question is will they leave or will it be Germany that leaves the Euro?

  These are the risk facing America now -- A weak economy could survive one or two of the above "risks", but anything more could lead to a renewed and deep recession.  It is important to note that most of the risks facing America now are externalities.  Things over which the U.S. policy makers have no control (BTW the whole derivatives business is out of control -- there is absolutely no will by the Democrats to do anything, and the Republican are being obstructionist -- as a matter of principle).

Finally, I have no conclusion to offer here.  Many because America (and by default Canada) could get lucky here.  but its unlikely!