Without an employment report published for September it is hard to tell how things are going. My sense was, and still is, that things were beginning to get better, and by that I mean that the economy was finally taking a step in the right direction towards the goal of solid economic growth–which is still far away–after months of stagnation triggered by the Bernanke announcement.
It is also possible that we will never get to that stage in this business cycle that began almost six years ago. Yet this cycle might be particularly long because the economy might never sustain a growth rate greater than 3%. As of today, I have to also keep believing that some people in Washington will not let us come near to a debt default because if that were to happen none of this discussion would even matter.