Friday, June 25, 2010

The worst is yet to come

Ambrose Evans-Pritchard, International Business Editor writes Published: 9:44PM BST 24 Jun 2010
"... Fed watchers say Mr Bernanke and his close allies at the Board in Washington are worried by signs that the US recovery is running out of steam. The ECRI leading indicator published by the Economic Cycle Research Institute has collapsed to a 45-week low of -5.7 in the most precipitous slide for half a century. Such a reading typically portends contraction within three months or so.
Key members of the five-man Board are quietly mulling a fresh burst of asset purchases, if necessary by pushing the Fed's balance sheet from $2.4 trillion (£1.6 trillion) to uncharted levels of $5 trillion. But they are certain to face intense scepticism from regional hardliners. The dispute has echoes of the early 1930s when the Chicago Fed stymied rescue efforts..."
Full text 
Comment: Once upone a time one used to say: it will get worse before it gets better; now it is the other way around, things got a little better for a while only to get much worse from now on. 

No comments:

Post a Comment