Postings will be light to nonexistent for the rest of the week as I indulge in some mid-summer R&R. The usual editorial tricks resume on Monday, August 2. Meantime, stay cool, be well and watch out for falling economic numbers.

As rebounds in corporate profits go, recent history is probably about as good as it gets. That’s no surprise, considering that the hammering of corporate America just prior to the rebound was no less extraordinary. The implication: the best days are behind us. That doesn’t mean that corporate profits are destined for trouble, but recent history delivered a backdrop of nirvana for the stock market. If something less, and perhaps considerably less is coming, so too are attitude adjustments. The question is whether the crowd’s expectatiions are fully and fairly adjusted?

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Zero-coupon Treasuries with maturities of 20-plus years are reportedly the top-performing investment this year through July 22, posting a 21% return so far. Ok, so what’s going to dominate for the second half? A repeat performance with zeroes? Naw, it couldn’t be. Well, it’s not likely, right? On the other hand…

It’s more complicated than it appears. From today’s Wall Street Journal: “After studying more than a decade of deflation in Japan, economists have slowly realized they have no idea how it works.”