The Last Hurrah? An economic storm is coming. The sun is still shining today, but, with almost all the net growth in Q3 coming from the trade sector, the clouds are forming on the horizon.

Second Thoughts on Bernanke’s Nobel Prize. The Bernanke approach did not include fixing mark-to-market (MTM) accounting, which was the key ingredient that turned a limited financial fire into a raging inferno that almost burned down the entire US financial system.

Reports: Solid Growth, Persistent Inflation... we think inflation will eventually slow down. But that doesn’t mean it’s going to slow down as fast as the Fed thinks.

No Recession, Yet. We are not “recession deniers,” we just don’t think one has started yet.

More Trouble Ahead. Why a recession?... a monetary policy that’s tight enough to control inflation is going to send the economy into a recession.

Will Higher Interest Rates Tame Inflation? Interest rates don’t determine inflation; the amount of money circulating in the economy determines inflation. And this is where the problem lies.

The Fed: What to Expect and What to Watch... the Fed is almost certainly going to raise rates by three-quarters of a percentage point (75 basis points), just like it did back in both June and July.

Home Prices Plateauing, Rents Catching Up. The maximum drop in home prices from the peak to the bottom in this cycle should be around 5%, not a 25% implosion like last time.

Biden’s Student Loan Fiasco...In effect, colleges could create massive and perfectly legal money-laundering schemes.

Economic Data...One thing we must remember when looking at economic data is that everything is distorted.