BEIGE BOOK (Bloomberg)
“Americans spending more on cars and housing helped the economy maintain a “modest to moderate” pace of expansion from early July through late August, even as borrowing costs increased, the Federal Reserve said today. Manufacturing expanded “modestly” and consumers spent more on travel and tourism, the Fed said today in its Beige Book business survey, which is based on anecdotal reports from its 12 districts. Hiring “held steady or increased modestly.”
…“Growth isn’t accelerating and there’s no escape velocity that some members would like to see” before tapering, said Yelena Shulyatyeva, a New York-based economist at BNP Paribas SA, a primary dealer that trades government securities directly with the Fed.” Story at…
…Emerging economies are particularly vulnerable to a tightening of United States monetary policy, the International Monetary Fund warned in a note prepared for the Group of 20 meeting in St. Petersburg this week.” Full story from Reuters at…
National Bureau of Economic Research – and among the few economists who warned in 2007 of an impending recession and credit crisis – recently observed:
“The danger of mispricing risk is that there is no way out without investors taking
losses. And the longer the process continues, the bigger those losses could be. That’s why the Fed should start tapering this summer before financial market distortions become even more damaging.’” Excerpted from the “Hussman Funds 2013 Annual Report” by John Hussman, PhD. Annual Report available at…
Wednesday, the S&P was up 0.8% to 1653 (rounded) at the close.