Wednesday, November 02, 2011

Busy day...

The market started off on the upside after it seemed like Europe had stabilized their Greek situation (more on that in a moment).  Throughout the day the bulk of the news flow was what one would consider to be negative for stocks - the FOMC minutes didn't save the day and Chairman Bernanke's outlook continues to deteriorate.

Consider that in January of this year, the Fed was predicting US GDP growth of 3.75% for 2011 and 3.95% for next year.  Well, today that prediction was lowered to 1.65% for 2011 and just 2.75% in 2012.  This is why I always say long-term economic projections are so difficult.  The Federal Reserve has access to more data than any other institution in the world and yet they missed their GDP prediction by a huge margin for the current year.  If this is the variability in current year predictions how can you place any weight on forecasts for GDP and budgets that go out 15-20 years.

The Fed also offered their first outlook for 2014 unemployment - 7.25% in 2014.  If this holds true it will make for a very difficult stretch for American employees.

I was going to post a series of photos detailing this man's conversion of a 4 wheel bike into a crazy, human powered Porsche look-a-like, but there were just too many pictures.  Do yourself a favor and click through to check out this project.  I can picture a couple of design geeks building one of those over the weekend :)


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