A DIFFERENT PERSPECTIVE

The Wall Street Journal had the same take on My last post on Monday with a different perspective.  The leading article was bemoaning the fact that both Stan Fisher and Janet Yellen were in the legislative business having both strongly warned about refining Dodd/Frank except perhaps for a bit of tinkering with the Volker Rule.

Now I have all the respect in the world for the editorial board of the WSJ, but come on guys, let's move back to Realville.  What do you expect from a bunch of beaurocrats...very smart beaurocrats mind you...who for the last  God knows how many years have been given a free ride on all things economic through the damn near complete abrogation of the Congress' fiscal responsiblities.  If you have been placed on the top of the hill you ain't Colin' down.  The view is good from up there.  Don't blame the Fed, blame the politicians.  The Fed is composed of human beings (surprise!) with all the foiiablies of humans.  Don't like it?  Tell your pol friends to start doing their job.  If they don't don't complain.

Anyway, having gotten that off my chest, a review of the past couple of days.

The economic data today was  surely surprising.  The economy is the second quarter grew at an annual rate of three per cent. Why? How?  To be honest, who knows?  There are explanations and concerns that this is not sustainable, which maybe true, but there are a lot of smart people scratching their heads today.  More surprisingly, to me at least, was that despite hurricanes, riots, the Little Fat Porker, Congressional disfunction and every thing else swirling around out there, consumer confidence came in at the second highest number in years.  What's going on?  On this one I return to what we observed on our road trip; every one seems to be hiring and with jobs, comes confidence. Yes, there are the usual load of bed pans and burgers but there's real stuff out there even in the fly-   over zone.  In our town there has been a tremendous resurgence in the downtown which is not exactly  Battery Park.  But $400.000 for a three bedroom out here is mucho dinero me amigo.  Something is going on and one can only hope it continues.

On a global note, despite all the good news, the dollar continues to head south.  The Euro hit 1.20 today since...well...I can't remember when.  One thing I can't understand is whilst the currency weakens the ten year touched 2.10% briefly yesterday.  Any help out there?  It honestly makes no sense but these are strange time.  Of course the strength of the Euro is making life rather for Sr. Draghi and his conviction that continued QE is the way to go.  In theory, the plan should strengthen the long end and weaken the short end: nope, it's been the other way around.  And now he's running out - of product.   Perhaps approach the pols to go further into debt?  Just kidding...then again, that just might work.