►Seven Faces of “The Peril”
James Bullard, president and CEO of the St. Louis Federal Reserve Bank: “In this paper I discuss the possibility that the U.S. economy may become enmeshed in a Japanese-style, deflationary outcome within the next several years…I emphasize two main conclusions: (1) The FOMC’s extended period language may be increasing the probability of a Japanese-style outcome for the U.S., and (2) on balance, the U.S. quantitative easing program offers the best tool to avoid such an outcome.”
Monthly Archives: August 2010
MANUFACTURING & JOBS: IMPERFECT TOGETHER
Today’s ISM Manufacturing Index was a winner in the sense that it showed the goods-producing sector expanded for the 12th straight month. Growth is good, more so than ever at this critical juncture. The crowd certainly understands this. As the AP reported today via the LA Times: “Wall Street reacts favorably to the Institute for Supply Management report, the first major economic indicator for July, sending the Dow up 208 points.” It’s certainly good news, but does it fall short on the labor front?
JULY WAS HOT, BUT COOLER DAYS AHEAD ARE LIKELY
July was a great month for the major asset classes—prices rose across the board. It was the best calendar month overall for the markets since last November, the last time that all the broad measures of stocks, bonds, REITs and commodities posted gains in a single month. Indeed, the Global Market Index (a passive measure of all the major asset classes) rose 5.7% in July, its best month since May 2009.