SAR #9218

Things change, but not as much as suspected.

At the Circus: Initial unemployment claims fell this week, and the 4-week moving average also fell - eight tenths of one percent. Wages and salaries fell 4.7% and nearly 1 in 10 (9.4%)Americans is unemployed. Hard to put lipstick on it.

Factoids: TrimTabs CEO Charles Biderman points out that over 10% of the 41 million US mortgages were delinquent at the end of May and 5 million mortgage holders are no longer bothering to make their mortgage payments. He feels this is not a good sign. Commercial real estate has dropped over 30% y/y, in step with a 36% decline in demand for space.

Target Date: Some of the non-believers are planning to get together on October 25th and chant "Dow 6617." Then they're going to check CNBC and see if the banking system collapsed, too.

Modesty: Bernanke isn't all that modest; the reason the Fed doesn't want anyone to audit the agency is not to keep stuff about Goldman Sachs and the other banks secret. Nope. What the Fed really, really wants to keep hidden is the manipulation and outright fraud that is its daily bread.

If... Then... If: Goldman Sachs says that if there's a recovery we could have a recovery driven run-up in commodities prices next year, if we have a recovery.

Autopsy: Where did it all go wrong? No, not the credit spree. Not even the hallucinatory housing bubble. The first foot wrong was pretending that manufacturing was something that underpaid teens in sweatshops in foreign countries could do, while we became a knowledge and service economy. Wealth comes from making things. Real things. Trade means trading the things you make for things someone else made. If you don't have things you made, then you make debts. We got real good at that. Shipping our jobs and our factories to our trading partners was not globalization, it was stupid.

Road Kill: Wall Street bankers and lawyers are circling the still twitching corpse of AIG, ready for a billion dollar feast.

Picture This: There are no longer any major chain supermarkets in Detroit. Food is available from corner stores, for a price. You won't see a story on the nightly news about this, though. Guys in combat fatigues won't let you take pictures of the food they are guarding.

How They Do That? Personal income dropped by $159 billion (1.3%) in June while spending increased $41.4 billion. Excuse me, this is where we came in.

There's Something Happening Here: The government hands out candy & is pleased to report the children are eating it. Demand has been stimulated. Is this a boost in demand, or simply a way to get more folks in debt by moving next year's demand to next month? Spending money that hadn't been earned and never will be earned is how we got here. Instead of more debt, we need to spend the next 5 or 6 years paying for the party our debts.

Porn O'Graph: Consumer deleveraging, not.