In 2005, Snow alarmed many with his wide-eyed "discovery" of the Chinese economic miracle after a tardy visit to the mainland last fall. And this week he kept on entertaining, issuing a wake-up call to the financial press to jump-start its coverage of the U.S. economy, telling the Chamber of Commerce: "The press may find this economy of ours to be downright boring, but I don't find it boring. Rather, it is a reason for optimism."
Be careful what you wish for, Mr. Secretary.
The U.S. economy and stock market may have been woefully boring in 2005, but history shows that may not augur so well for 2006 or 2007.
Sure, the economy proved remarkably resilient in the face of hurricanes Katrina and Rita, not to mention the spike in interest rates and gasoline prices. President Bush's tax cuts, the housing boom and a lavish expansion of the money supply have consistently kept the recovery on track.
Still, for my money, I'd rather have a treasury secretary who is worrying about what could go wrong in the new year rather than one busy chastising reporters for not cheering about what went right the year before.
Here are some factors that could keep financial news from being anything but boring in 2006:
• Oil: The black stuff continues to be the major fly in the ointment when it comes to the economy in 2006. After a startling 40% run-up in 2005, crude prices jumped another $5, or 9%, in the first week of 2006 alone.
• Ben Bernanke: The Princeton economist will have to deal with the "freshman curse" that has haunted all recent Fed chairmen.
• The U.S. Dollar: That Bernanke crisis could be triggered by a downward spiral in the value of the U.S. dollar. Already, 2006 has brought us the biggest daily decline in the value of the greenback in five years.
• Housing: Signs of a slowdown abound, and the soft-landing scenario appears to be the most-likely fallout in 2006. Still, the effect on consumer spending remains to be seen.
• General Motors: The troubled automaker will be fighting for its life in 2006. The psychological toll of a GM bankruptcy on U.S. consumers, if it happens, is hard to fathom.
• The U.S. Consumer: Even without a headline-making corporate bankruptcy or financial scandal, consumer sentiment will be tested in 2006. Not only are the new bankruptcy laws now in effect, banks are raising their minimum credit card payments on hundreds of millions of credit card holders.
Just some potential potholes to consider, Mr. Secretary. You're correct — the U.S. economy goes into 2006 with a good head of steam. Hopefully, it will build on that strength in the New Year. Still, it never hurts to worry about what could go wrong — because at least once in awhile it actually does.
Terry Keenan is the anchor of Cashin’ In and an FNC business correspondent.
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