Markets & Economy

As Fed tapers, its European counterpart may just be getting started

Expect dramatic action by the European Central Bank next week

Here in the U.S. we enjoy the sturdiest economic situation in the world, no matter how creaky it may feel. But, to look outside ... eyes wider and wider all the time. Today it's especially hard to handicap a new load of information as pre-holiday markets never really opened today and there is no reaction to watch. And next week is breath-catching, with the European Central Bank meeting Thursday and U.S. job data on Friday. So, start big and then study components. Begin in the U.S. and move outward. Always, always stick with Clinton's Law ("It's the economy...."). Above all, the Great Misconception -- that the global economy is still suffering from the financial crisis. Not so. That ended years ago. The world is wrestling with three things: the deflationary "trade shock" from the opening of China 25 years ago; the West's struggle to control its borrowing in a slow-growth era; and the folly of the euro. New U.S. data confirm an unprecedented pattern: at least two-thirds of th...