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He Who Sees No Data (Bernanke) can look at the following chart, and pretend no one else is looking.  He claims to be “data dependent”, but that must be a joke.

This morning’s ISM Non-Manufacturing reading for the month of December came in above the all so important 50 line (economic expansion line), at 50.1. This was another sequential improvement versus the November reading of 48.7.

Now, both the ISM Manufacturing (released earlier this week) and Non-Manufacturing surveys are holding at/or above the levels we saw in early 2008. These, to the plain eye, look a lot like the Letter ‘V’. Unfortunately, the willfully blind of Washington groupthink aren’t allowed to see these charts, and the rate of return we are issued by the US Government on our savings accounts remains ZERO as a result.

I am by no means suggesting that this V-bottom is sustainable. But I am definitely not refuting that a V-bottom has occurred. It’s now a fact. To have witnessed the incompetence of the US Federal Reserve’s forecasting ability in missing this chart on the way down in late 2008 was one thing. Now we are seeing them miss the entire bounce on the way up, and it is both professionally embarrassing and sad altogether.

I remain bullish on US Treasury Yields (short SHY) and bullish on the US Dollar (long UUP) for the intermediate term (3 months or more). Either the Fed’s mea culpa is coming, or something far darker than I can imagine for America’s place of leadership in setting global monetary policy.

America’s Creditors are watching.


Keith R. McCullough
Chief Executive Officer

Bernanke's Letter V - ISM6