The disintegration of our society will surely bring dis-integration.
Retail Summary: Shoppers up, shopping down.
When's Good For You? If Congress had to pass a separate, specific tax to pay for the war in Afghanistan, do you really think they'd do so? Ditto, Iraq. What about paying for the wars by taxing Wall Street profits and speculator transactions? Nope, better keep taking the money away from our children.
Powerful Indicator: US coal consumption to generate electricity is down 11% y/y. In that it takes electricity to make the economy go 'round, obviously the carousel has slowed no matter how much Wall Street pretends a recovery is underway.
Priorities: 1 in 4 mortgages is now under water, 1 in 3 Americans have either lost their job or live with someone who has, 1 in 4 children is on food stamps and one in 8 families are. We spent over a trillion dollars bailing out Wall Street and friends. It will cost about a million dollars a year to keep each soldier in Karzai's opium patch and after the 'surge' there will be over 70,000 of them.
Delamination: In the end, it is not about the missed payments, nor even about the whole $59 billion, which isn't all that much on the world stage. It's that Dubai World's debt was presumably guaranteed by Dubai and the assumption was that someone with oil money – the UAE or Abu Dhabi was guaranteeing Dubai's backstopping of Dubai World's debt. How much commercial real estate debt has been established, consolidated, aggregated and securitized on the assumption that the layers upon layers were all going to hold?
Curtains: Bernanke warns that looking behind the curtain will spoil the magic and show the cupboard to be bare.
Global Lies Nation: As Americans begin returning to work, many find they must accept 40% pay cuts. It's not so much a result of the credit/mortgage disaster, but that other disaster – shipping US production and jobs overseas into the global 'free market'. If you want a job in the globalized economy, you have to accept the going rate, which will be ever lower.
You Ain't Seen Nothin' Yet: Scientists say the three-year drought in California could be just a foretaste of droughts that would last decades, perhaps centuries. It's happened before and may well again. But don't worry, it's just another of those climate change scare stories.
Patterns: Not only do we live in 'interesting times' but we live in a unique time, where looting the past and mortgaging the future meet and end. Understanding this is prerequisite to understanding where we are and where we are going.
Bring Out Your Dead: At least 56 things to worry about, now or soon.
Petro-dollars: The sky, it seems, is not the limit for oil prices, but $90 bucks a barrel may be and $150 most certainly is. The US economy cannot function if it must spend more than 5 or 6% of GDP on petroleum.
Thought for the Day: “Our wars, even though they’re destroying our economy, are making a lot of people rich.”
Porn O'Graph: Glows in the dark.