Sunday, August 21, 2011

The week ahead

It looks like the Libyan rebels have taken Tripoli but I'm not sure that's any reason to celebrate. Every other country that has had a revolution - Tunisia, Egypt, etc - has struggled to transition to anything resembling a stable government.

There is pretty consistent talk starting to leak from people in the know that the US (and maybe the G-7) needs to embark on ANOTHER giant stimulus program of some sort. The numbers I've seen have been between $1-$2 trillion which seems shockingly aggressive given the bickering that occurred in Washington over cutting about a $1 trillion from the budget.

The most prominent idea seems to be an "infrastructure bank" which was an idea that I was in favor of back in 2007/2008. Prior to the giant bank and auto bailouts and before the explosion of other spending, this idea seemed like a smart way to leverage our shrinking resources. However, after watching the debacle in Washington two weeks ago I don't think there is any appetite to do anything grand like this.

You'll also hear a great deal this week on Chairman Bernanke's upcoming Jackson Hole speech. Last year at this speech Mr. Bernanke leaked QE2 news and sparked a sharp stock rally that continued through November. The market has clearly indicated it wants a similar speech this year.

I'll let you google it yourself but there's still some interesting news "leaking" out of the Gulf of Mexico re: BP's Deepwater Horizon's rig that was lost last year.


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