World mkts are scared to death, one reason prices on US Treasuries spiked (yields tanked). The US is still considered the world’s safest harbor (the UK and Germany providing secondary anchorage).
Most observers can only see US weakness ahead. We’re more constructive (see earlier sketch). Friday’s July Payroll number will be the first test.
Next, many expect EU contagion to hit European banks. Indeed, these banks are finding short term funds (LIBOR) harder to come by, recent days; US m mkt funds are not buying their CD’s.
Robert Craven
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