Has the massive Obama stimulus plan put us on a collision course with virulent inflation?

It sure looks that way.

Let me explain …

When the U.S. Commerce Department on Friday said the U.S. economy contracted at a 1% annual pace in the second quarter, the report was actually seen as good news: It was a slower decline than in each of the two prior quarters, and economists had expected a contraction of 1.5%.

“This is good news,” Nariman Behravesh, an economist with IHS Global Insight Inc. (NYSE: IHS), told The San Francisco Chronicle.

But here’s the wild card: Although government spending did increase during the April-to-June quarter, only about 7.7% – $60.4 billion – of U.S. President Barack Obama’s stimulus package had actually made its way into the U.S. economy by June 30, the quarter’s official conclusion. Of that total, the largest component went to U.S. states to …

Has the massive Obama stimulus plan put us on a collision course with virulent inflation? It sure looks that way. Let me explain …

When the U.S. Commerce Department on Friday said the U.S. economy contracted at a 1% annual pace in the second quarter, the report was actually seen as good news: It was a slower decline than in each of the two prior quarters, and economists had expected a contraction of 1.5%.

“This is good news,” Nariman Behravesh, an economist with IHS Global Insight Inc. (NYSE: IHS), told The San Francisco Chronicle.

But here’s the wild card: Although government spending did increase during the April-to-June quarter, only about 7.7% – $60.4 billion – of U.S. President Barack Obama’s stimulus package had actually made its way into the U.S. economy by June 30, the quarter’s official conclusion. Of that total, the largest component went to U.S. states to help defray the jump in

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Below are some of the key sections of the Summary of the Fed Beige Book and my reaction to it interspersed. I have also bolded what I consider to be remarks worthy of emphasis in the report. "Reports from the 12 Federal Reserve Districts suggest that economic activity continued to be weak going into the summer, but most Districts indicated that the pace of decline has moderated since the last report or that activity has begun to stabilize, albeit at a low level..." In other words, the economy is no longer falling off a cliff, but it has not started to climb back either. This is consistent with most of the other economic data we have been getting recently. "Most Districts reported sluggish retail activity...Manufacturing activity showed some improvement in the Richmond, Chicago and Kansas City Districts; while St. Louis and Dallas reported some moderation ...

Outlook Global markets appear to be shaking off the recent unprecedented withering of the financial system and are looking for an upturn. But is it sustainable or is it a short-term event? So far, a string of drastic actions by the Federal Reserve and both the Bush and Obama administrations has yet to turn around a bunker mentality. Banks fear lending money to each other and to their customers. Businesses are reluctant to hire and boost capital investments. Consumers have hunkered down. All the economy's problems are feeding off each other, creating a vicious cycle that Washington policymakers are finding difficult to break. Even if the turmoil gripping Wall Street were to let up and badly shaken confidence in the banking system were fully restored, a "broader economic recovery will not happen right away." Obviously, the technology industry is not immune to the current economic ...

This company is a real sleeper.  David Fessler of Investment U has “been on the lookout” for a stock like this.  He expects that “Neutral Tandem will be a direct beneficiary” of broadband network expansion.

Recession resistant and sure to benefit from President Obama’s energy policies, David explains why this  Sleeper Stock is the way to go.

This from David:

Sleeper Stocks… Are There Any Left?

Regular Investment U readers know I’m an old propeller head (retired engineer). As such, my focus has been on the energy, infrastructure and technology sectors.

Since the beginning of the year, I’ve been on the lookout for stocks that stand to benefit as a result of President Obama’s stimulus package, and the energy policies his administration plans to enact during his term as President.

As investors – regardless of our political persuasions – we are looking at some exciting months and years ahead and some

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Neutral Tandem, Inc. (Nasdaq: TNDM): Stock of the Day

by David Fessler, Advisory Panelist, Investment U

Sleeper Stocks… Are There Any Left?

Regular Investment U readers know I’m an old propeller head (retired engineer). As such, my focus has been on the energy, infrastructure and technology sectors.

Since the beginning of the year, I’ve been on the lookout for stocks that stand to benefit as a result of President Obama’s stimulus package, and the energy policies his administration plans to enact during his term as President.

As investors – regardless of our political persuasions – we are looking at some exciting months and years ahead and some great opportunities. I’ll be talking about them here, and in various publications our paid subscribers at the Oxford Club receive. You can learn more about them here.

Yesterday I went searching for a “sleeper” stock. You know the type: a

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Managing Director Peter Jacobs brings more than twenty-five years of experience in the telecommunications and technology sectors to the company. Previously, he served as a president of a nationwide telecommunications inter-exchange carrier where he was responsible for the conception, development, and rollout for the prepaid calling card. Later, he successfully rolled out the first machine-vended telecard in America. Within two years, a nationwide network of 3,000 of these advanced vending machines was in almost every major truck stop in the U.S.

Corporate Counsel William Haseltine has more than two decades of experience in corporate and securities law and has practiced around the world. He spent nearly ten years at the U.S. Securities and Exchange Commission where he was Special Counsel, working in the Office of International Corporate Finance, the Office of Disclosure Policy, the Office of Chief Counsel and the Office of Disclosure Operations. His expertise lies in small businesses and

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