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Bad weather or bad shape?

Published Thursday, June 26th, 2014

Was the US economy in 1Q a victim of bad weather or was it fundamentally in bad shape? Yesterday the US economy’s contraction was revised from -1% to -2.9%, a fall that far exceeded expectations. Despite the shock and an initial pause, US stock markets closed higher basis the “rear view mirror” justification. Second quarter data has been ok, the forward looking windscreen indicates a clear road ahead and if there are obstacles there is always a dovish Federal Reserve backstop.

In Iraq the rear view looks a lot better than the forward view. The situation looks bleak as ISIS continues to make progress and the Prime Minister al-Maliki refuses to form an inclusive government of national unity. Yesterday there was the surreal situation of US and Iranian drones and Syrian war planes flying over Iraq all in support of the same side.

Over in Europe it is verbal bullets that are being fired leading up to a confrontation in Ypres tonight when the EU leaders meet to decide who will be the next President of the European Commission. This time around it looks certain that Ypres will witness the defeat of the British, although given the symbolic significance of the town confirmation of the defeat may be delayed 24 hours when they all move to Brussels.

to read the rest of the report, please click here 

Posted by David Hufton