In March of this year the markets were hitting new highs. All indices shared in the festivities. The unemployment rate dropped to nearly 5%. Oil prices dropped too, giving hope to the consumer economy and diminishing inflation expectations, as inflation all but disappeared. In general, the outlook for the economy was positive. Then, slowly, the outlook began to change.
The International Monetary Fund spoke frequently of the declining outlook for the global economy. We had noted that previously, and we moved our money back to the U.S., saying the U.S. was the “best house on a bad block”. Commodity prices, other than oil, began to decline in response to China’s slowing growth rate.