Economic Yellow Weeds

So many have called a bottom to the economic debacle. Honestly I have no opinion...but become more of a bear when it is almost accepted as common knowledge the worst is over. The VIX prior to the last several days was hitting extreme lows showing complancancy. Even from an economic standpoint there is a growing divergence between business sentiment surveys, which have shown great improvement and industrial production, which is down sharply. More so it was down 1.1% in May. Face it...9.4% unemployment is a very high number. All of those unemployed are not going out shopping or paying their credit card bills.

The other 800 pound gorilla can be inflation is on the way with all the money that was printed. This is surely fantastic for commodity trend followers but a wealth destroyer for others. Let alone discussions I have had in the real estate industry that there are warehouses of files of not yet foreclosed upon homes sitting. People are living in homes for 1-2 years without paying their mortgages.

It sure seems there are more yellow weeds than unwise optimism.

Andrew Abraham

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