The DJIA has rolled over a bit since the release of the latest Beige Book from the Federal Reserve, yet the market is still higher.  Ditto for the S&P.  The Fed’s Beige Book is supposed to be a collection of information on the current economic conditions put together by each Federal Reserve Bank in its district.  The data is to be taken from bank directors and interviews with key business contacts, economists, market experts, regional managers and more.  This Beige Book is very similar to many others when the economy is not yet at a marked recovery and no longer falling.  In short, it is all gray.

The main theme for the July and August period is one of stabilization.  Flat retail sales were noted by most regions, with some help from ‘cash for clunkers.’  Also noted is a continued downward price pressure in housing prices and labor markets remaining weak.

The banks noted that credit standards remain tight and that loan demand is weak.  On other words, we’d say that de-leveraging is being seen at the top and bottom.

The full text of this month’s gray book can be found here.

JON C. OGG
SEPTEMBER 9, 2009