> The economy as a whole does not need to do well.
>The tax cut helps capital incomes. The falling dollar helps
>US exports and profits, as long as it does not get out of
>hand, which it could. Also, still living in happy talk land
>of post-Iraq "victory" (those polls show most Americans
>don't give a hoot about the mess over there), and Big
>Al is talking about an interest rate cut. Yields on bonds
>suck right now compared to yields on stocks. And after
>three years of a bear market, some upward momentum
>can really feed on itself at this time.
Hi Barkley - welcome back.
You're right that the economy as a whole doesn't need to do well - for a while. But if there's no second-half acceleration, and with it a pickup in profits, then there will be a great disappointment upon the land.
Interest rate cuts are nice, but if they come with a deflationary stagnation, a la Japan, then a 0.25% fed funds rate won't bring the bull back to life.
As Dallas Fed president McTeer said earlier today, the economy needs to be growing faster.
Doug