From rugged individualism to obese complacency
Reconcilliation: So the battered wife - that's us - is going to let the abusing husband - that's the Fed - back in the house. He's promised to reform. He may try, but his drinking buddies on Wall Street still have far too much influence over him. It's only a matter of time before he falls off the wagon and begins slapping us around again.
Another BRIC from the Wall: Russia and China have agreed to expand the use of their own currencies in bilateral trade. Is this the beginning of the end for the dollar as a reserve currency and if so what's the understudy?
Yes, But : Unemployment has turned the corner, giving strong indications that the end of the contraction is near. The worst, they claim, is behind us. Maybe so, but over 600,000 Americans filed for unemployment this week, and the U-3 rate will be well over 10% by the end of the year. As a result, consumer demand will remain puny. But not to worry, consumer spending makes up only 70% of the economy....
Erection Correction: A 35-40% decline in commercial real estate values is seen over the next few months.
Objects in the Windshield are Closer than You Think: Those party-pooping scientists are back at it: The world, they say, faces "abrupt and irreversible climatic shifts" as global warming's effects will arrive sooner than expected.
Qualification: Indian PM Manmohan Singh, commenting on the BRIC meeting in Yekaterinburg, said that replacing the dollar as the global reserve currency would be a highly complex undertaking. He did not say it was impossible.
Flipping Houses: In the last 2 years HUD has acquired about 110,000 foreclosed houses and paid various lenders $12 billion. It has turned around and sold most of them at a $6.7 billion (55%) loss. HUD has about 38,000 houses currently for sale; make an offer.
Just Asking: How does "more of the same" qualify as a reform?
Short Term Memory Loss: Less than a year after $4 gasoline killed SUVs, they're back. Not only are they back, they're selling at sticker prices because of the production cuts last year. Used truck and SUV trade-in values have returned to last year's highs, too. Meanwhile, warning of the return $100 a barrel oil are blissfully ignored.
Long & Short: "Fed Buying Treasuries; China Selling Treasuries."
One Trick Herd: Wall Street's so proud of itself for conning the taxpayer into covering their losses that they're ready to bring back outrageous bonuses. It'll be fun to watch the peasants gather around the bonfires....
The Old Folks At Home: Some claim the US has to raise the retirement age further and further and scrimp on health care, too. Put the oldsters back in the workforce. Great, just what the economy needs over the next few years - lots and lots of old farts competing for jobs as greeters. That'll solve everything. I thought old people like me were supposed to spend our assetts and consume, consume consume. It's a full time job.
Taxing Problems: State income-tax revenues have fallen 26% in the first 4 months of 2009 over 2008. The pain is widespread. But what went on in Alabama, North Dakota and Utah?
Old Hat: The herd is coming around to Shiller's point of view - at least the rational ones.