Is Obama like Clinton or Bush?

- Macro viewpoint: Is Obama like Clinton or Bush? "Continued gridlock in Washington would be very bad for the economy. We expect a reluctant compromise on taxes at the last second."
- Fed watch: QE2: Pondering when and how "The Fed has adopted a clear easing bias, but there is no rush: the economy is weak but not drifting toward recession and Bernanke will want to get broad support from his committee before acting. The Fed has a number of options to further stimulate the economy. Now that they have acknowledged that inflation is “somewhat below” acceptable levels, one way to ease further would be to the “extended period” language to the inflation outlook. The Fed could also tie its asset purchase program to bond yields – buy whatever amount is needed to bring the 10-year yield down to a specific range."
- Housing watch: Builders still downbeat "New home sales remained close to record lows, the NAHB housing survey remained depressed and single-family permits fell, setting the stage for further declines in housing construction. The housing market will be a clear drag to GDP growth this quarter and next."
- The week ahead: New month; New ISM "We are not expecting any major revelations in next week's data flow and expect continued evidence of a weak economic landscape. The main event will be the release of the ISM manufacturing index on Friday. We are expecting the index to decline to 54.0, its lowest level since November 2009. We'll also receive the personal income and spending report."

Merrill Lynch US Economic Weekly 20100924

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