Wednesday, August 15, 2007

A Temporary Power Outage

Wall Street remains caught in a tizzy over a power outage in the credit markets. But Main Street is in fine economic shape, according to the latest reports out of Washington.

Industrial production — one of the most important coincident indicators out there — is steadily rebounding. Overall, it’s up 2.9 percent annually over the past three months. Manufacturing is up 4.7 percent. Auto output has increased 19.4 percent. Computers and office equipment are up a whopping 25 percent.

These are big numbers. And Americans are buying what these businesses are producing. Overall retail sales are up 4.8 percent for the past three months at an annual rate....

Click here to continue reading my latest syndicated column arguing that the financial liquidity squeeze triggered by the sub-prime virus is a very difficult near-term problem.