Stipp: What risk factors are out there? What keeps you up at night? What are you probably most worried about as being a wild card in your thesis for the markets and the economy?
Ramsey: Well, I'm still bothered that even though there's very strong evidence that we've moved in to economic expansion, globally. I am troubled that if you X out the countries in Europe that had the credit problems, if you X those out and look at global bond yields in, let's say, fiscally responsible countries with, I suppose, quotation marks around the "fiscally responsible."
But at least the ones where the markets have not yet called them to task like they have in Greece, and Spain, and Portugal. Those bond yields, we do a global bond yield composite that's around 3.5% right now. What it tells me is there's still a great deal of fear that we could sink back into a double dip.
Now, my contrary take on that is, that fear itself that underlies all this, is probably a good thing. It means that payroll employment has been kept at bare-bones levels given the recovery we've already seen in demand. It means that inventories have been kept at bare-bones levels.
So to some extent, the lack of belief in this economic recovery is almost a positive element. In other words, people have not gone overboard, obviously, in rehiring and rebuilding inventories. There continues to be this skepticism, which I think is longer term bullish, but we need to wade through this little period of credit problems in Europe.
But long story short, I'd like to see long-term bond yields, here in the U.S. and abroad, start to move up. To me that would be a sign that some pricing power is finally starting to return, that credit demands are starting to firm up. So I'm bothered by the fact that the bond market continues to catch a pretty strong bid day after day.