Tuesday, October 27, 2009

SAR #9300

Don't be so worried, we're just the control group.

Crop Report: The Chicago Fed's National Activity Index suggests that growth in national economic activity improved in September, reaching levels that “coincided closely with the end of the four previous recessions.” The official recession might be over, but how are things at your house? Do you still have a house?

All China, All the Time: Goldman Sachs predicts China's increasing demand for diesel will drive oil to $85 or more by January. China's oil demand rose 12.5% in September, the 6th monthly increase in a row, ant its LNG imports hit a record high, too. Coal imports rose 7% in August, which is impressive if only because China is the world's largest producer (and user) of coal. Don't those folks know there's a recession going on?

Deja Vu All Over Again: This time it's the uncanny retracing of bad loan experiences by banks today, compared to banks in the 1930's. Just a coincidence that the pace of bad debt write-offs today exceeds the early years of the Great Depression. Nothing to it, move along.

Either/Or? Robert Reich has an interesting article on what Obama should do and when he should do it. It would be more palatable if he didn't set up the discussion with the observation that “while affordable health care is important, making a living is more urgent.” Wouldn't want to tax Mr. Obama by suggesting he tackle two things at once.

Narrow Window: The free market folks are saying that a healthy recovery does not need to create jobs for a lot of the unemployed, because “a healthy economy cannot be measured simply on the basis of jobs figures, because not all jobs produce wealth.” Maybe not, but most jobs provide income for the worker and her family.

Just Cut It Out: Apparently that's the treatment that works for severe migraines.

Mr. Sunshine: Since asset prices are being inflated by a weak dollar right now, a dollar reversal could smash this rally, says Nouriel Roubini. This will be a substantial risk once the Fed is pushed to increase interest rates. When in the last quarter century or more, brief periods of militarism aside, has the dollar not lost value? And if the Fed raises interest rates significantly, inflation will eat the value of the dollar for breakfast, lunch, and dinner.

Planning Ahead: In Switzerland, keeping with its conservative outlook, steps are being taken to replace the power currently obtained via hydro-power from melting glaciers – once the glaciers finish melting away.

Remarkable: Paul Krugman, in a short note on the renminbi/yuan name issue, pointed out that one of his comments was to be taken as a joke. Why he limited it to just the one is beyond me.

The Old One, Two: The GAO reports that within ten years the USA's debt, as a % of GDP, will exceed that at the end of WWII, and will grow steadily higher forever. But before that, about 2016, Congress will lose the surplus income from Social Security taxes (2016) and Medicare will be broke (2017). They conclude “that the federal government is on an unsustainable fiscal path.” The sentence would be more accurate if the word 'fiscal' was left out.

Asked and Answered: The headline asks: “Will Obama's Economic Policies Destroy the Dollar?” No, that's already been taken care of.

Harvest Time: After tanking the world's economies, mortgage securitization got a bad name. According to Barclays, it was a bad rap. So Barclays is going to see if there's an appetite among the incurably greedy for another flyer on AAA rated tranches of Slice&Dice backed by rising unemployment and broken promises.

Porn O'Graph: Spending doesn't increase if you spend your allowance paying off debts.

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