Thoughts from the Frontline

Manufacturing the Data

By John Mauldin

August 22, 2003

Manufacturing the Data
Down is Still Down
Stock Market Warning: Sharp Curves in August
Rule # 4 of the Investment Writers Guild
Progress is Our Most Important Product

How can I talk about a mere Muddle Through Economy when manufacturing is rising, the Phillie Fed Index skyrockets, housing and new home construction is on fire, economists are predicting a healthy 3.5%+ GDP next quarter, unemployment claims dropped, the stimulus from tax cuts and mortgage refinancing is just now kicking in, business confidence indicators are rising, The Index of Leading Economic Indicators has risen for the 4th straight month, the dollar is rising and the stock market is predicting a healthy future, etc., etc.?

How can I think we will even come close to a Muddle Through Economy when the mortgage refinancing index has dropped 72%(!) since May 30 (and we all know refinancing was keeping the economy afloat), mortgage applications are falling out of bed even as home inventories rise significantly, almost any type of debt by almost any measure is at an all-time high, bankruptcies are reaching new highs in a "recovering" economy, unemployment (except for…

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