The Last Bear Standing

This week we look at the growing disconnect between the US economy and the stock markets. One is slowing and the other is exploding to the upside. One of my mentors once said that it is the duty of the markets to prove the most-possible people wrong. So far, I am clearly in the wrong category. We will look at some explanations as to why, ponder if this can continue, and more. (I will conclude the letter I promised last week in next week's letter. There were still a few details I needed to get it ready.)

But first, a quick note. My daughter and associate Tiffani has prepared a photo tour of my recent trip to South Africa and put it on our website. You can click on the following link and see it, as well as find a link to the e-letter about my thoughts on South Africa. (If you do not have a cookie in your computer, you will get our landing page. Simply put in your email address and then either click the link again or hit the link to "Other Material by John" on the upper left-hand side of the page.) http://www.frontlinethoughts.com/africa.asp

The Last Bear Standing

"An economist is a trained professional paid to guess wrong about the economy. An econometrician is a trained professional paid to use computers to guess wrong about the economy." (Sent to me by friend Kathleen Camilli)

The last few weeks we have seen a series of negative economic data, culminating with Friday's surprisingly low estimate of first-quarter GDP at 1.3%. As we will see, the housing…