The fundamentals of the U. S. economy aren't looking so hot to ordinary people or to CFOs. Duke University published last month its quarterly CFO Survey. It's an ideal survey for bond bulls. The CFOs have mild optimism but in general plan to cut jobs and capital spending next year. They also plan to outsource jobs to Asia next year, where capital spending plans are relatively robust. They do plan to increase their cash balances as profits slowly improve.
Meanwhile, Gallup.com continues to show dismal hiring/letting go numbers.
I have not talked to one person in the small-midsized business community who sees a pickup in business--au contraire, in general.
Amongst my several banker contacts, one thing is clear. The bankers ARE NOT LENDING except to clients who barely need to borrow, or where there is a Federal backstop. Banks are purchasing munis and Treasuries for lack of anything better to do.
Yes, every traditional cyclical indicator suggests good growth ahead. Perhaps this is the pause that refreshes. But as a physician, I treated every case as a new one. Anomalies occur. Somehow the current economic/financial/markets case just feels different. Right now, I'm taking "the under" on the economy. (Not too brave, since I'm agreeing with Dr. Hatzius of Goldman Sachs!)
Prosperity must be just around the corner . . .
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