Braille Economics

Braille economic analysis is what I resort to when the crystal
ball gets too murky. It consists of moving your way into the
future by grappling with the economic data and inching your
way along. Besides, no one is paying me to make forecasts now.
Forty plus years of investing and trading has taught me that
you do not have to be the first kid on the block to know what's
going to happen to make good money and / or dodge bullets. (One
important key to success in the businesses of investing and
trading is to learn how to dodge bullets.)

I have not bought into the recession camp. It is slow out there
now in the US and maybe getting slower. But I have yet to see the
sort of broad imbalances between production and consumption that
signal an involuntary build of inventories that leads to plant
down time and furloughs. Customarily, excess inventory is a
linchpin for a down cycle. The bad news here is that inventory
data on the broad economy comes late in the reporting of
monthly data. Two further points: Many businesses have the
supply chain management capability to control inventories rather
well. But, employment gains and real earnings progress has been
scant this year, so it may not take gaudy inventory excess to
usher in a downturn. So I inch along....

Unlike many economists, I remain concerned about inflation. As
I discussed a short time back, we did have a blowoff in the oil
price. The recent $10 bl. correction is a help, but oil remains
in an ominous uptrend that will sap most households of
purchasing power if it persists.

THE ODD ITEM: The new US NIE asserts that Iran is aggressively
developing fissionables but does not appear to have an active nuclear
weapons development program underway. WHATEVER, this document does
undercut the ability of GWB and the Shooter to kite the oil price
for the boyz in the great Southwest. Maybe less swagger from these
two will help settle down the oil market.