State of the Economy: Tug of War

 
Quarterly Economic Report
January 17, 2012 Posted by:

When the going gets tough, people sometimes revert to playground antics with today's choice seems to be "tug of war." This traditional game pits two sides pulling on a line with the objective being to gain enough of the line so that it cannot be brought back from the other. The members of the losing team typically end up flat on their faces, while the winning team celebrates a hard-fought victory.

Unfortunately, many issues facing the marketplace today are taking shape in this form. Tugs of war are occurring all around us and the resulting uncertainty is driving investor and consumer behavior.

2 comments
Posted by Neil Goldberg, January 20, 2012 at 5:03 PM
"Joe,
Nice commentary on this strange "push-me, pull-you" world we're in just now. For example, I cannot recall more agitation as the Dow steadily climbs. Keep up the great work.
Neil"
Posted by Joe Morgan, CFA, February 1, 2012 at 10:08 AM
"Thanks for the note, Neil.

A similar thing is happening in the bond market with something like 99% of economists being bearish, but the market still rallies. It makes you wonder who's left to sell!?"

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