Economic Insights – August 2012

While America’s equity markets have rallied sharply since October 2011, with the S&P 500 up 22 percent, the stock market has been stuck in a fairly narrow range for 18 months.  For instance, the Dow Jones Industrial Average has hovered between 10,650 and 13,280, well below the October 2007 high of 14,165.

Much of this stagnation is due to the fact that a wide range of problems has been priced into the markets.  Prolonged slow economic growth and the increasing burden of big government will continue unless we see a dramatic change i.....