When Dr. Alan Greenspan became chairman of the Federal Reserve, he moved from the world of rhetorical economics to the world of action. His most recent memoir attempts to make sense of how the financial crisis of 2008 came to be and how we can better predict future crises, along with the role of gold in a global monetary system.
The GDP report was unusually boosted by trade in the third-quarter. Typically, exports add and imports drag from the report. The net contribution from both sides of the ledger was 1.3% and the highest reading since the second-quarter of 2009.
Oil rallied further after the leaked Fed story. Apparently the Fed did not want the market thinking that rates were going up anytime soon so they dropped a dime to their buddy Jon Hilsenrath at the Wall Street Journal.
Two weeks ago, biotech was really strong, last week not so much. Last week Transports was strong, maybe this week it won’t be as much. But I will tell you that certain stocks that recently were on the cusp of breaking out, didn’t.
Even after five years of the Fed’s most aggressive accommodative policy in history, there is still a lack of hoped for quality credit creation in the economy, which could be a sign that the greatest deleveraging of the U.S. economy since the Great Depression is still not complete. The Fed’s unrelenting dovish policy appears to support this concern.