Given the moves in the markets, you have to wonder whether Japan is going to surprise on the upside on growth.
The economy has hit an air pocket, at minimum.
I think there's a one word summary out of this thing: War.
The missing link is jobs. But I would guess the odds are 70 or 80 percent that we're going to see strong job growth in the next few months.
I personally think that it's going to be quick, that the Iraqi army will join the Italian army in historical folklore.
One of the biggest fears, from an economic point of view, would have been a catastrophe in the oil fields. That hasn't happened and it looks like it probably won't happen. In a sense, that's a bigger deal for the economy than if the war lasts one week or four weeks.
Sure, the plan could push Treasury yields up. But if it contributes to an increased efficiency of the economy and boosts growth, what's not to like?
The idea that there is going to be a war is thoroughly accepted in the financial markets right now. But nobody can know what the exact contours are going to be.
A lot of people are going to be watching the employment report for evidence of whether the economy has hit escape velocity.
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