It's time to try
something almost anything else.
The Other Shoe: Don't sweat the stock market's jitters, its the slow freezing of liquidity that will pull the wheels off the wagon. The US dollar today has a negative value, and the Fed is not going to raise short term rates, so the dollar will remain under mounting stress. Look for things to get worse in the money markets.
Cognitive Dissonance: The yield on 10-Year Treasuries has dropped below 2.10%. At that level – according to traditional wisdom – stocks are 30% overvalued. After Tuesday's market, make that 35%.
Carpe Diem: Mitch McConnell intends to rescue Social Security and Medicare from their “clearly unsustainable path” by insisting on gutting both programs via “significant entitlement reforms.” The complete quote, for you Latin scholars, is “Carpe diem, quam minimum credula postero.”
Eney Meeny, Miny, Moe:Maybe S&P's chutzpah wasn't the main cause of Monday's madness – maybe one or two big hedge funds got a call from Mr. Margin, and one thing led to another.
Finger On The Pulse: “Rather than fight for a bold jobs plan, the White House has apparently decided it’s politically wiser to continue fighting about the deficit. The idea is to keep the public focused on the deficit drama – to convince them their current economic woes have something to do with it, decry Washington’s paralysis over fixing it, and then claim victory over whatever outcome emerges from the process recently negotiated to fix it. They hope all this will distract the public’s attention from the President’s failure to do anything about continuing high unemployment and economic anemia.”
Cartography: Here's a short review of how the US managed to go from surplus to disaster in 12 years – or in three Presidential terms, whichever is less.
Home Sweet House: House prices fell 6.2% y/y in the second quarter and are down about 30% from the 2006 peak. Foreclosures made up 19.7% of all sales, down from the March peak of 21.4%. Fake signatures on fraudulent foreclosure documents remain steady.
Factoid: 1,470 of our overtaxed millionaires paid no federal income taxes in 2009.
Previews: Since 1939, the market has seen 30 declines of 15% or more over four months, but such declines have only resulted in a recession one third of the time. The thing to watch for is a 20% jump in the 4-week moving average for jobless claims, which is now at 408,000.
Chickens, Roosting: The Feds are suing Goldman Sachs for $491 million in damages for selling to credit unions that subsequently failed $1.2 billion of MBS that were "destined to perform poorly."
General Principles: Michael Burgess (R-TX), says that President Obama needs to be impeached, but doesn't have a particular reason in mind. John Bruning, Tea Party sweetie in Nebraska, says welfare recipients are like "raccoons scavenging for insects." Tea Party favorite Allen West (R-FL) claims that the Republican's refusal to raise taxes had nothing to do with the S&P downgrade - despite S&P's press release that cited the lack of increased tax revenues as part of their decision.
Quoted: “I’m strong – my wife’s strong, and we make it. I’m not struggling. My family eats; we eat every day.” Ray Abrams, 45 whose only job is as a groundskeeper two days a week, taking home $135. We eat every day...
Appearances Count: Forget S&P and the deficit/debt stuff – the thing that makes the US look weak is the political shenanigans inflicted on the country by an extremist right actually wants economic Armageddon.
No Smoking: Much of what we do every day is - directly or indirectly - contributing to the end of our industrial society through any number of catastrophes: global warming, peak oil, over population, resource depletion, and on and on. None of this is news, but we prefer to pretend ignorance. Like smokers, we will deny and delay until we, and our way of life, are dying, then seek a miraculous cure.
Audition: Ratigan reprises Beale.