Zeev's Turnips Patch-No Politics (ZEEV)

[Zeev Hed]

I don't think so, the economy is really not doing as bad as it "feels". My understanding of the "cycle" is that AG has no choice but to raise rates, maybe as high as 3%, if for no other reason that he knows that a consumer led recession is coming sooner or later and he got to have ammunition to "stand against the wind" (namely a rate from which a decrease will have an impact). As far as business is concerned the short term rates are not that important, it is the long term rates that count. Because of the wide current spread, there is ample room to raise short term rates with only minimal impact on the long term rates. Thus the initial few fed rate increases will have only minimal impact (except of "psychological") on economic activity. Once he gets to the 2.5% to 3% rate, then the long term rates may start and follow and have an impact. Frankly, I fear the feds like most generals are fighting the last generation's battles, inflation, and because of globalization deflation is to be feared more than inflation, but WTHDIK.

By the way, CSCO and NMS have little impact so far on Asian markets, they are uniformly higher.