Flash Floods & Run-Off

Tired of all the “green shoots” metaphors?

As in, “the weak-but-recovering economy is starting to sprout green shoots.”

My alternative analogy: the economy is likely to remain cool and soggy.

That’s what you get when you combine unprecedented monetary and fiscal stimulus (water), and cool conditions (recession).

At some point, the ground becomes saturated.

What happens when the ground can’t absorb any more water, yet it keeps raining?

You get run-off and even flash floods — that is, hyper-liquidity chasing finite investment opportunities.

That’s my take on the stock market’s dramatic run-up since March, and the volatility roiling the commodities markets (oil, gold, copper, etc.).

P.S.: want another analogy? The (economic) patient’s fever has broken — but his body is still showing the after-effects of years of abuse and neglect.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

Leave a Reply