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Bonds Are a 'Safe' Investment: A Big Lie Gets Even Bigger
Some trends are obvious enough and visible to all investors. Others are more subtle, but just as potent, and these often slip "under the radar."
The World Bank's recent "downgrade" -- the magnifying of its 2009 forecast for the global recession to a 2.9% contraction from the previously released 1.7% pull-back grabbed headlines, and it sparked a whole new round of selling on Wall Street.
Further, sentiment appears to be building that the much-anticipated Q3/Q4 global economic recovery may not arrive on time.
But what slipped under the radar were two other data points that suggest that those investors who believe the evidence incontrovertibly points to a recession through Q4, may want to make another sweep of the research, including:
Bottom Line: Until additional data (including housing starts, durable goods orders, factory orders, and monthly job lay-offs) convey otherwise, the view from here argues that a U.S. economic recovery will start in Q3/Q4, followed by a euro-zone recovery in Q1 2010.
- The E.U.'s recommendation that member states scale-back fiscal spending, and the political entity's concern that some of the fiscal spending may become entrenched, fanning inflation
- President Obama's statement Tuesday that he doesn't think a second stimulus package is needed, at least not yet
Bottom Line: Until additional data (including housing starts, durable goods orders, factory orders, and monthly job lay-offs) convey otherwise, the view from here argues that a U.S. economic recovery will start in Q3/Q4, followed by a euro-zone recovery in Q1 2010.
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Reader Comments (Page 1 of 1)
6-24-2009 @ 11:34AM
Lee Gibson said...
I agree with your generally optimistic assessment of the situation, but I do have to ask how a "recommendation" and a Presidential "statement" count as "data points."