That was an atrocious Philly FED!! Businesses were sitting around watching congress fight over bunch of nothing in July. So MFGs got no orders out of that inaction.
Combine that with elevated PPI and CPI you get stagnation.
R word is flying around again. Ben Bernanke is probably going to have to say something more significant at Jackson Hole. But did he already do that at last FOMC meeting? That 0% rate for 2 yrs is like QE3. What more can the man do?
And Mr. Trichet is going to need to reverse hikes for sure. Do we really have a "meeting of the minds" in Wyoming now? We are going to need a herd of rabbits pulled out of their hats in order to keep US and European economies from tipping into recession.
That initial dump on the open accelerated after the ugly econodata. I am still in the camp of VIX north of 40 being sold into expiration, resulting in a bounce for stocks. But this is just one trader's opinion :)
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