Bond Outlook June 16 2010

Calm has descended on financial markets, but whether that is because of the World Cup or a reflection of a return to genuine stability is unclear. What is now clear, however, is that our description of the recession as “L-shaped”, or to use John Mauldin’s phrase, resulting in a “Muddle-through Economy”, is widely accepted as a fair description of the current economic state of affairs. Bernanke himself says as much but in that special banker’s language which softens the impact of an otherwise strong statement.