Bi-partisan establismentarian opinions aside, there seems to be building consensus that all isn't well (enough) both in the U.S. and the world.
Morgan Stanley lowered its tracking estimate for gross domestic product in the first three months of the year to a 1.5 percent annual pace from a 1.9 percent forecast. Barclays Capital in New York lowered it to a range of 1.5 percent to 2 percent, down a half point. GDP climbed at a 3.1 percent pace in the last three months of 2010.
The trade gap shrank 2.6 percent to $45.8 billion from a larger- than-previously-estimated $47 billion in January, according to figures from the Commerce Department today in Washington. Another report showed the cost of imported goods jumped in March by the most in almost two years.
So how much did the cost in imports rise? From the Bureau of Labor and Statistics:
U.S. import prices rose 2.7 percent in March, the U.S. Bureau of Labor Statistics reported today, following a 1.4 percent advance in February. The March increase was driven by both higher fuel and nonfuel prices. The price index for U.S. exports increased 1.5 percent in March after rising 1.4 percent the previous month.
So how is consumer confidence doing?: At a nine month low!
And here are some lowlights from Mish:
Expect to Hear the "R" Word Soon
The ECB is hiking and that will not do Europe much good.
Japan is obviously hurting.
In the US, state budgets are a wreck and little or no help is coming from Congress.
In the US, mall vacancies are high and rising
Residential housing in the US remains an absolute disaster
China is hiking to stave off property bubbles and inflation
The Australian housing bubble has popped.
The UK is a fiscal disaster.
The overall global economy is much weaker than most think and the global macro picture is awful.
Roubini chimes in: "Portugal may end up as a worse mess than Greece/Ireland. Plan A (bailout) may fail even before you can design Plan B (debt restructuring)"
Spain is also at the doorstep of insolvency with China trying to prop it up.
As to the state of health of U.S. banks: "I don't like these banks being as big as they are," Mr Volcker told a conference at Bretton Woods in New Hampshire on Sunday night. But "to break them up to the point where the remaining units would be small enough so you wouldn't worry about their failure seems almost impossible," he said. Are we to translate that as 'without the implicit backing of the Federal Reserve, these banks would never survive in their current shape and size'?
Is the Fed the main culprit with its expansionist monetary policies of the past decade? Is Mish right? Questions abound. Time will show, however it is hard not to be pessimistic.