We hope that you have all had a chance to read the commentaries dated September 14th and 19th, where we recommended that investors focus on the positive economic impact of monetary and fiscal stimulus in the next six to nine months. Our focus is much more long-term than most. While most economists and financial news commentators have chosen to focus on the near-term recessionary effects of this past week's events, we are taking a contrarian stance.
History shows that military engagements or war are stimulative to the U.S. economy.
In the very short-term, we will see a sharp drop in confidence and spending, and this most likely will drag Q3 GDP lower. It is too premature to make any new revisions to either Q3 or Q4 until we see some of the weekly data on sales, jobless claims, and so forth. We have listened to a lot of misinformation regarding the short-term impact of this past week's events on U.S. consumer confidence and spending. Before we get started, we want to mention that Fed Chairman Alan Greenspan in his address to Congress this week about the impact on the U.S. economy, said, there has been pronounced disengagements from commitments both in business and consumers. Our research on the data bears this out substantially.