Just when you thought it was safe to go back into the water, here come the sharks. Let’s start with some good news. As the charts on economy show, business activity is picking up nicely. The economy is growing. New orders are soaring and profits are strong.
All this is to be expected. The acceleration in the pace of business activity follows the Fed’s shift to an expansive monetary policy this past year. Following a normal 6-9 month lag, spending has recovered.
In spite of the recovery, stock prices have wavered over the past two weeks before today’s sharp decline.
Commentators attribute the weakness in stocks to problems in Greece. Problems in Greece should be simply problems for Greece. Unfortunately, the European Union, the IMF and (according to some reports the Obama Administration) have committed to helping Greece try and close its deficit