I'm not an economist or an investor - but I have a job, and like every other working person I'm critically interested in what the economy is likely to be doing. I'm puzzled about the purpose of this short article - it appears to be aimed at short-term investors because it relies on modest but very recent fluctuations of three indices - the premium paid by higher-risk borrowers for credit, the value of the Yen vs. the Dollar, and the "headline inflation rate." By my igonrant understanding, the U.S. economy is headed for a tumble "some time in the future" because we are financing ourselves on borrowing, both governmental and trade, and this is not sustainable unless there is a default, which would throw the worldwide economy into ... More »

Helpful overview about recent market changes, which the Economist attributes to a sudden rise in risk aversion. This concise analysis points to two warning signs: credit spreads in premium rates paid by borrowers have risen on American high-yield bonds; and the Japanese yen has also risen against the falling dollar, suggesting a waning speculative appetite -- and possibly a declining interest in foreign investments to fund America's current deficit. Helpful analysis, well-sourced and clearly presented.

It looks like a short range trading caution, probably mostly meaningful if you are a finance and investment focused person.

Interesting, informative, and accessible. Though I invest my own retirement funds and belonged to a stock club for some years, I'm not really conversant with these macro-economic triggers. This made the theories easy to understand. How accurate they are remains to be seen. I'm put in mind of John Kenneth Galbraith saying that economics exists only to give astrology a good name!

typical caution from the economist, who were warning about deflation a couple of years ago; they flag macro risks well. and the article is worth reading. but their big picture forecasts are not as good as their reporting. they've successfully predicted 9 out of the last 5 major threats with their approach.

Maybe if people were more risk averse in advance of problems this kind of article wouldn't be necessary. But it's an interesting quasi technical analysis of where our economy might be heading. I've seen several articles in other publications recently wondering what would happen if developing countries (especially China) decided to stop shoring up the dollar and started investing more in their own infrastructures - the recent Atlantic Monthly had some good material on China.

A total dog-bites-man story about the unpredictablity of the future. Bottom line in this story is: "investors should not yet be pressing the panic button. But they ought to be more alert than they were a month ago." Sound advice! Indeed, timeless advice, advice that any idiot could give on nearly any day of any year in the past century, inasmuch as it sums up to "be careful out there, you never know what might happen tomorrow!" Well, yeah.