Update for Tuesday June 8th

We seem to have lost the 'need for transparency' that is so oft spoken of and promised at all levels of our government. Now Bernanke is speaking in 'vaguely optimistic' terms about all that is going on in our world's economic systems. With continued trouble abounding in just about every economy that is looked at, leverage (debt) continuing to grow at unparalleled levels and the interconnectedness of all of the industrialized economies of the world, I don't believe Mr. Bernanke is as forth coming as he might should be at this time…
I do appreciate this comment from this economic update -
"Unlike the US, these European nations have determined that the greater risk to stability is the growing level of sovereign debt, rather than a weak economy."
So, when do we wake up?
prb

Subject: S&Y PSG Morning Update for Tuesday June 8th

In an interview yesterday (6/7), Fed Chairman Bernanke said
- he does not expect a “double dip” recession and
- that the US recovery is proceeding at a moderate pace.

He also said the
- unemployment rate will remain high for a while and
- the Fed would begin raising rates before the economy reached full employment.

The Chairman also addressed the problems in Europe and suggested the steps the EU, IMF and individual nations have taken recently are appropriate and should help resolve the crisis. This vaguely optimistic macroeconomic outlook by the Chairman is not unexpected, but contrasts with the generally pessimistic attitude of the fixed income markets that the European debt/deficit situation is far from over and sovereign risk continues to represent a real threat for investors.
Both the Germans and British announced additional austerity measures yesterday (6/7) that will entail relatively large cuts in government spending.

Such austerity programs will inevitably
- dampen the strength of the economic recovery,
- reduce global aggregate demand and
- affect growth rates not only for Europe but also Asia and North America.

Unlike the US, these European nations have determined that the greater risk to stability is the growing level of sovereign debt, rather than a weak economy.