It's a strange September. Feels more like late summer than early fall. The hurricane that pelted Manhattan with rain made a Thursday feel like a Friday and the markets are acting like it's late August on most days.
Times like these make me warm to old chestnuts. Like Stephen Roach, the economist at
, and his Ahab-like obsession with global growth. For several years now, Roach has opined that we're on the brink of global synchronous growth, the kind of broad economic action that could strain New Era concepts of low inflation coupled with steady, stable growth.
In the past, the Roach thesis has gotten unwelcome surprises from a Mexican blowup, an Asian blowup and a Russian blowup. But now, he believes that his long-held faith will finally get its reward. In a recent report, he argues that the long run of disinflation -- temporarily sustained by global crises in recent years -- will give way in the coming year to strong growth and inflationary pressures.
Could the inflation bogeyman be around the corner? Certainly our fire-breathing economist
believes that the good times of low inflation are behind us. And rising long-term interest rates along with the Fed's more concerned posture indicate that the experts are warily searching for inflation's return. Obviously, the return of inflation in any meaningful way would severely undercut the stock market's strength, bringing with it the required tough medicine of rising interest rates from the Fed.
But is such a scenario on the horizon? Despite higher oil prices, commodity prices remain anemic at best. And even as the globe -- especially Asia -- gurgles back to life, there remains enormous untapped capacity still available for increased economic strength. Despite Roach's "optimism" concerning his thesis, and despite Padinha's conviction about his own thoughts, the inflation scenario hardly looks like a lock. And I can't help but recall that only a few months back the concern was deflation. Steady, stable noninflationary growth will give you such a world -- alternating attempts to decipher unseen change.
We've launched message boards on
and you shouldn't hesitate to weigh in on the Topic du Jour. Everything from
best. Lots of good chatting.
Check it out!
Uh-Oh for GE?
, expert contrarian indicator this past year (oil prices, net shares,
, etc.), weighs in this week with a cover of
Jack Welch. Could this era's equivalent of the
cover jinx do its dirty magic again? Unlike oil, Jack can actually think. It'll be interesting to see what unfolds. For the recordkeepers, the cover appears on newsstands Friday and GE closed up 2 3/4 to 120. We'll check back on that in a few weeks.
The truth hurts.
column. This week he examines
Inside Wall Street column. Good, crackling reading.
season has started and my
look just as good as ever. Super Bowl-bound for sure this time. And unlike the last four times, I'm betting on a Minnesota winner in winter.