| America--a somewhat tarnished image in many | | | | London, Singapore, etc. |
| corners of the world. A resolution of the Iraqi | | | | National Debt--our gross national debt at roughly $9.0 |
| situation hopefully sooner-rather-than-later will help | | | | trillion is 67% the size of annual U.S. economic output |
| restore our image | | | | (GDP). The Japanese national debt is 150% the size |
| Bush--very low approval ratings limit his ability to get | | | | of theirs. Ouch! |
| desired legislation passed. The President has his work | | | | Oil Prices--around $62 per barrel in recent days. The |
| cut out for him over the next 20 months to build a | | | | consumer in me wants to see gasoline prices well |
| positive legacy. The good news? Tax cuts. The bad | | | | below $3.00 per gallon. The economist in me would |
| news? Iraq | | | | like to see oil prices around $100 per barrel for 3-4 |
| Consumer Confidence--has remained reasonably high | | | | years. Such a price would provide a powerful |
| this year, despite the economic "headwinds" of prior | | | | incentive to get serious about conservation, |
| Fed tightening and high energy costs. Confidence | | | | renewable energy, better use of coal, nuclear, oil |
| remains somewhat fragile, however, given anxiety | | | | shale, etc. |
| about terrorism...especially on American soil...and soft | | | | Politics--childish and boorish behavior on both sides of |
| home prices in mostly coastal markets | | | | the aisle in Washington is ridiculous...and all too typical. |
| Dollar (the)--has weakened modestly in recent | | | | Is cooperation really that difficult? |
| months, primarily versus the euro. In my view, | | | | Quarterly Economic Growth--expected to strengthen |
| additional modest weakness is actually welcome as it | | | | as '07 matures. The first quarter's 1.3% real (inflation |
| will help reduce our trade imbalance with the world | | | | adjusted) annual growth pace is likely to be revised |
| Energy--the U.S. imports a record 60% of the oil we | | | | lower on May 31. Current quarter growth seems |
| use daily. A concern? Roughly 90% of the world's oil | | | | closer to a 2.0% real annual rate. We see a 3.0% real |
| is in the hands of people who don't like us | | | | growth pace by the end of '07 and in '08 |
| Federal Reserve--on the monetary sidelines for nearly | | | | Retirement--the term will take on new meaning in |
| 11 months now, following seventeen 0.25% tightening | | | | coming decades as more and more people "bridge |
| moves between June '04 and June '06. Our best | | | | the gap" (work two or three days a week) between |
| guess has the Fed being able to ease policy slightly in | | | | working full-time and moving into full retirement. Most |
| 2007's final quarter | | | | retirement-age Baby Boomers will prefer to keep one |
| Global Economy--strong growth remains the norm, | | | | foot in the workplace for a long time to come |
| despite high energy prices. Another year of real | | | | Stocks--our "aggressive as most any others'" |
| (inflation adjusted) growth above 4.0% now unfolding | | | | forecasts of stock prices continue to be exceeded |
| would be the strongest five-year period since the | | | | by the Dow. We spell out reasons why gains will |
| early 1970s | | | | continue in our new book econAmerica to be |
| Health Care--one of the most important challenges in | | | | released by Wiley next month |
| coming years as America deals with ever rising costs | | | | Taxes--Democrats will talk during the next two years |
| and a rapidly aging population. Tort reform is | | | | about the need to repeal the Bush tax cuts. |
| mandatory. Various health care experiments at the | | | | However, it likely won't happen. Why? The flow of |
| state level may show promise | | | | tax revenue into Washington is absolutely |
| Inflation--of rising concern during the past 18 months, | | | | astounding...and "if it ain't broke, don't fix it." The |
| tied to high energy and commodity prices. In my | | | | budget deficit for FY2007 could be down to $150 |
| view, less of a concern down the road given intense | | | | billion |
| competition, aggressive consumer behavior in getting | | | | Unemployment--averaged 4.6% last year and 4.5% |
| "a better deal," solid gains in productivity, and the | | | | so far in '07. The rate is likely to move closer to |
| cost-saving nature of the Internet | | | | 4.7%-4.8% over the balance of the year...and yes...still |
| Jobs--the U.S. added nearly 7.4 million net new jobs | | | | remain below the average of the '70s, '80s, and '90s |
| during the past 40 months, although the pace has | | | | Visitors (Foreign)--likely to come in droves in coming |
| slowed in '07. A return to extremely tight labor | | | | months, especially from Europe and Asia....and they |
| availability in coming years is a given | | | | spend aggressively! Be nice, be kind, and invite them |
| Knowledge--and the Ability to Think--the key to | | | | back |
| individual success in an increasingly sophisticated | | | | Wall Street--simply stated...I remain bullish on stocks |
| economy. Ongoing education and training are now | | | | Xports--American exports of goods and services in |
| lifelong realities for many to be successful | | | | '07's first quarter rose 9.8% from that of the same |
| Leadership--watch this one. Democratic leaders in the | | | | period a year ago, the 17th consecutive quarter of |
| Congress seem more interested in attacking and | | | | export growth. Imports (including oil) remain too high |
| embarrassing the President than actually getting | | | | Youth--my parents "came of age" with Pearl |
| anything done. If this continues, their reign could be | | | | Harbor...my peers with Kennedy's assassination and |
| short-lived. Remember the minimum wage increase | | | | Vietnam. For millions of Generations X and Y, |
| promised by Pelosi? Still undone | | | | September 11 will be forever etched into their |
| Merger & Acquisition Activity--many deals are | | | | consciousness |
| being done to take companies private...and therefore | | | | JaZZ (Utah)--now into the NBA's "Final Four" after |
| largely exempt from the costly Sarbanes-Oxley | | | | dispatching Houston and Golden State. Can they win |
| regulatory burden. Congressional reform is sorely | | | | it all this year? Like the little train...I think we can...I |
| needed. The alternative is for the U.S. to continue to | | | | think we can... |
| lose its position as the global financial center to | | | | |