Tan Ink Blots, by George Zachar

January 17, 2007 |

The Tan Book today is like a shrink's ink blot test, where an ambiguous image is used to tease out the mindset of a patient.

A dour bond market is focused on this:

District reports generally described labor market conditions as tightening and cited examples of some businesses having difficulty finding qualified workers. [Read more here]

and not on this:

Overall prices increased moderately. Prices for energy and a number of materials have eased, and competition has kept prices for final goods in check. Atlanta, Chicago, Minneapolis and Kansas City described price pressures as easing or moderating.

We'll shortly see rigorous text analysis of the report, with faux-precise discussion of how bullish or bearish the report is on the economy.

In reality, both the markets and the Fed are looking at the same patterns in the data, and tomorrow's Bernanke testimony before the new Democratic Congress will provide far more information than today's Tan Book.





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