A quote from “The West Wing”:
Larry: “If the economy is heading into a recession–”
Josh: “No, no, no. We don’t ever use that word around here.”
Ed: “What word? Recession? …What should we call it then?”
Josh: “I don’t care. Call it a boat show or a beer garden or a bagel.”
Larry: “So if it is a… bagel, the Fed thinks it’s gonna be a mild bagel.”
I think that’s the path we are on, a mild bagel with a risk of renewed inflation concerns. The subprime meltdown or whatever you wish to cause the current crisis, has caused liquidity to dry up. The Fed, although a bit late, will need to drop rates and pump money into the system. This may very well pull us out of the, er, bagel, but it will touch off a bit of inflation. Just my thoughts on this. Enjoy the weekend, don’t lose any sleep over the market.
Edit – If you go to Google and search on “mild bagel” (I’m feeling Lucky) you get my blog.