Zeev's Turnips Patch-No Politics (ZEEV)

[Zeev Hed]

Market watcher, I would not worry about fighting the feds as much as fighting politicians with a burning desire to stay in Washington comes 2005. These guys are extremely sharp, and they smarted further from the failure of Daddy bush in 1992. They know all the tricks in the trade, they have all the right contacts, and they control the fiscal spigot. Typically, when the government opens wide the fiscal spigot, the feds counterbalances with tightening the monetary reigns. Guess what, this thing is so well engineered, that so far M3 has barely gone up yet, thus the feds is far from finished with its spigots (some would say, though, that the fact that M3 growth is so puny is by itself evidence that the feds, like George Burns, is trying to play billiard with a rope...). I thought it would be better politically to start this ramp later in the Autumn, so that by next year's heat of the contest no hymn "it is the economy, stupid" will have any ears. I may be proven wrong on that timing.

Longer term, I agree with you, excess capacity, stretched consumers and a worldwide recession looming do not augur good things, but the market claims all that has been discounted already. Since the US, I don't really see a negative GDP quarters until maybe the third quarter next year (but not enough growth either to stop the increase in unemployment) at the earliest, the market could engage in some wishful thinking for longer than bears can bear...

Zeev