When the Boss says, “We're all in this together.” We're not.
The Right Threat: Losing a million jobs a month is not nearly as dangerous to Wall Street as the average house price falling $10,000 in a month. Take away Fannie, Freddie, Ginnie and the FHA, and you bankrupt the entire financial system. Which explains almost all of Washington's fiscal policies.
Resource Exploration: South Korea is joining China and India in prospecting for oil in places like Canada.
What Happened to the Cabbage: If the trumpets, drums and strings pay absolutely no attention to you, you are not actually leading the orchestra no matter how much you wave your arms about. So too, Obama as Commander in Chief to McChrystal, Odierno, Petraeus and Mullen – not one of whom would have a job if Harry Truman was on the podium.
Good/Bad News: In the near term, oil prices are unlikely to rise over $150 a barrel – because way before then oil prices will kill the recovery.
Home Sales Noise: Sales of existing houses either rose 9.4% in September, or fell 5.2%. Depends on how much adjusting you want with your statistics. Under either interpretation, house prices fell and are going to keep falling.
Spandex: By traditional measures of earnings and profits and the shape of the real economy, the stock market is at least 40% over-valued. But don't tell the speculators – they see her as Rubensque.
Tea Leaves: A group of Asia-Pacific leaders are promoting a regional free-trade alliance – modeled after the European Union - to reduce their dependence on US and European customers. Right now it is seen as a ten year project, which might include some sort of regional currency, modeled after the euro. Just talk, but it throws its shadow ahead already.
The Harvest: “People spend longer between jobs than in the past, and if/when they do find new work, it is often at a lower level of pay than before. “ And that's being optimistic.
Diagnosis: Observing a 50% run-up in the Dow since March, with only deterioration in the real economy since, Robert Shiller opines “"Somehow we got into this really speculative mentality and I don't think we're out of it yet." Y'think?
Unusual Suspect: Traditionally, when the Western economies tanked, the price of oil went with it. Except for a couple of times when the price of oil tripped up the economies. Things change. The price of oil tripped up Western economies, but China kept on increasing its use of oil. And now that's lead to the price of oil reviving before Western economies did. This does not end well.
Tounge Twister: Roubini says there is a serious crash on the way (the last one was a warm-up exercise?) but gold is not the answer. Not “unless you have Armageddon or another depression.” He didn't offer any reason for not expecting Armageddon, nor explain the difference between the two.
Quiz: Weak-kneed pacifistic budget hawks are in general agreement that the United States is on the road to ruin. Is the US (a) a dying empire. (b) a banana republic. (c) a failed state, or (d) Ruin? Why everything's just fine.
Early Warning? Last week Citi abruptly terminated its gasoline station affiliated credit cards and began raising credit card rates to 30% on many unsuspecting customers without warning (and apparently with little or no reason). What is Citi preparing for ?
Reverse Psychology: The Senate plan to curb carbon emissions would hand out – free – permits that would let utilities, refineries and manufacturers continue emitting carbon dioxide. Well, why not, they give Wall Street a blank license to steal...
Porn O'Graph: Were've I seen you before?