SAR #12033

Best to settle for small hopes and quiet despair.

Remembering Saddam: U.S. officials said they have seen no intelligence to indicate that Iran is actively plotting attacks on U.S. Soil; nevertheless, we intend to attack them first, with the media cheering all the way. Preventive invasion number whatever. Just because they have not - according to the CIA - decided to build a nuclear device isn't going to let them off the hook.

Unfinished Sympathy: The rumor now is that a final deal between Greece and its private bondholders will be signed any day now. This week. Probably. Greece is fast approaching a "condition of absolute poverty."

Mene, Mene, Tekel u-Pharsin: The Congressional Budget Office now predicts real GDP will grow only 2.0% in 2012, then slow to 1.1% in 2013. It sees unemployment at 8.9% in 4Q2012 rising to 9.2% a year later. And it sees Social Security tapping the $2.8 trillion Trust Fund starting in 2019.

The Big 'D': European monetary aggregates (M1 and M3) have been shrinking dramatically for the last couple of quarters as bank lending ground to a near halt. The annual growth rate of M3 declined to 2.0% in November from October's 2.6% rate and fell to 1.6% in December. Such contractions in monetary supply are generally correlated with rapid and steep slowing of economic activity, edging into deflation.

Overheard: "An improbably large number of things will have to go right in order to avoid a major decline in stock market value in the months ahead."

Fog Of War: "Had that portion of the decline in the labor force participation rate since 2007 that is attributable to neither the aging of the baby boomers nor the downturn in the business cycle not occurred, the unemployment rate in the fourth quarter of 2011 would have been about 1¼% higher than the 8.7% recorded". Translation: The BLS numbers are bogus and real unemployment is 10%."

Choosing Sides: American Airlines wants to cut 14,000 union jobs and stick the Pension Benefit Guarantee Corporation with a $9 billion obligation to take over its underfunded pension plans covering 130,000 people. The Union and the Government are not enraptured by AMR's plans. Stockholders, however, are pleased and bondholders delighted.

Morning Line: Homeland Security assures the nation that there are no major Super Bowl threats.. One presumes they were talking about terrorists, not Patriots.

Gift To The Magi: Romney gave $100 million in assets to his sons that was, for tax purposes, worthless. Legally. You need not ask how he managed it because you don't have near enough money to use that sort of tax trickery.

Hubris: Obama argues he has authority to bomb sovereign nations and that 'drones have not caused a great number of civilian casualties'. The source of this 'authority' is as mysterious as the President's poor grasp of the sanctity of human life. When did it become acceptable to kill “just a few” civilians?

Process: When a Republican wannabe denigrates Blacks or Latinos or the poor, Muslims, the President or climate scientists, they are not talking about Blacks, Latinos, etc. And they are certainly not talking to the poor or scientists. They are talking to the rabid right, the bigots who are going to decide which bozo moderate Republicans will have to swallow as their candidate.

Got Rhythm ? Pfizer has recalled a million ineffective birth control pill packs and suggested that its customers rely on back-up methods. Gotta watch out for those placebos.

Can't You Kids Play Nice? An ad running in Hong Kong calls mainland Chinese 'locusts'. Back in the civilized US, an adviser to Gingrich's SuperPAC claimed that Democrats wanted to abort black babies. Where's Goebbels when you need him?

Rest In Peace: Of the necessary deleveraging that is now underway, PIMCO's Bill Goss says "We are witnessing the death of abundance and the [birth] of austerity, for what may be a long, long time." No flowers. Donations accepted.

Porn O'Graph: Cannon fodder.