Forecasters will begin to reduce their estimates for 2011 GDP in the near term, eventually by perhaps 1%. Clients to prepare for this reality up front.
Background: Mid Q4 we predicted that the economy would perform far in excess of estimates, and the reasons why. We predicted that forecasters would revise their estimates for 2011 GDP much higher. That was the result. Mid December, PIMCO, Goldman and others revised their forecast from 2%, to 3 or 3.5%. Key - since consensus drives price change, clients were provided with a leg up in making their planning or investment decisions.
That bring us to Q1 and eruption in the Mid East. Few observers have yet to appreciate the implications of this event. The very real risk is for much higher crude into Q3, perhaps beyond. Even today’s 105 print (May contract, WTI) is corrosive if maintained for any time. That’s the best case.
We understand from Gordon Wood in Revolutionary Characters that the founders Jefferson, Madison and Paine envisioned, “A world held together by the natural interests of commerce.” They understood that, “In both the national and international spheres monarchy (or despots) and their intrusive institutions were what prevented a...harmonious flow of people’s feelings and interests.” That is - democracies get along.
This is the eventual destination, Mid East. It’ll just be a heck of a ride getting there.
Robert Craven
Background: Mid Q4 we predicted that the economy would perform far in excess of estimates, and the reasons why. We predicted that forecasters would revise their estimates for 2011 GDP much higher. That was the result. Mid December, PIMCO, Goldman and others revised their forecast from 2%, to 3 or 3.5%. Key - since consensus drives price change, clients were provided with a leg up in making their planning or investment decisions.
That bring us to Q1 and eruption in the Mid East. Few observers have yet to appreciate the implications of this event. The very real risk is for much higher crude into Q3, perhaps beyond. Even today’s 105 print (May contract, WTI) is corrosive if maintained for any time. That’s the best case.
We understand from Gordon Wood in Revolutionary Characters that the founders Jefferson, Madison and Paine envisioned, “A world held together by the natural interests of commerce.” They understood that, “In both the national and international spheres monarchy (or despots) and their intrusive institutions were what prevented a...harmonious flow of people’s feelings and interests.” That is - democracies get along.
This is the eventual destination, Mid East. It’ll just be a heck of a ride getting there.
Robert Craven
Seems like a good time to start taking profits and hold on to cash.
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