Blogger Jeff Matthews (who is perpetually not making things up) has just penned an epic open letter to Monsieur Bernanke in opposition to the next trillion bucks worth of quantitative easing. Matthews has doggedly cataloged a Kirstie Alley-sized truckload of corporate data points that scream “recovery”. The insights gleaned from this quarter’s big conference calls completely nullify any justification for QE2 whatsoever.
The letter cites growth and recovery color from Marriott, Union Pacific, Blackstone, Norfolk Southern, WPP, W.W. Grainger, Caterpillar, Manpower and Delta Airlines. We get an amazing array of insights and stats from some of the most relevant cyclical companies in the US.
For the most part, the CEO’s of these companies are glad to report that:
a) Business is coming back – even in Europe and America.
b) Hiring is not far off, pricing and demand did not stop slipping until well into 2009, give us a minute here, geez!
c) Deflation is non-existent outside of housing prices.
I have already announced that I am in the Raise Rates camp, or at least, in the stop-pouring-kerosene-on-the-fire-camp. After reading this fantastic post, I nominate Jeff Matthews for the Head Counselor slot at this camp. We play volleyball, sit around the campfire and look on in slackjawed amazement as the Fed acts like any further printing will speed up the de-leveraging and recovery process from here. It won’t.
Save your powder, Ben, and hop onto a few of these conference calls. And please be sure to read this letter: