SAR #9827

We don't think about what we take for granted.

How much is that in Drachma? The market's up 60% from the March lows and you're feeling... well, not rich, but better than before. Right? But in terms of real dollars, adjusted to an international basket of currencies, the S&P is back to 1996 levels. Want to talk about gold? Oil?

Installment Plan: Having secretly dispatched 13,000 more troops to Afghanistan, Obama will soon announce his decision about sending more troops to Afghanistan.

British Patriots Act: The English have a long tradition of government supervised freedom of the press. Of late The Guardian has been prevented from reporting the identity of an MP who asked a question, the nature of the question, to which minister it was directed, and who is being shielded from public view in all this. The paper is also prevented from telling its readers it is being censored.

Another Dumb Question: 'Is Bush to blame for the housing bubble?' No, and neither was Clinton. Do you really think any President has more power than Goldman Sachs or JP Morgan?

Wisdom: The challenge facing Bernanke, Geithner, and Obama is how to get the unemployed, underemployed, indebted US customer borrowing and spending again – especially in the face of a 5% annual decline in outstanding credit. When large parts of the citizenry are unemployed and homeless, the community tends to become unstable, a circumstance far more serious and difficult to remedy than the question of toxic assets.

I'll Hold My Breath Until I Die And Then You'll Be Sorry: The major banks – who are not really banks, but investment and brokerage behemoths that own a bank for convenience sake – say that if they have to play by the rules and stop playing pretend with their off-book gambling dens, they'll stop lending. Okay, but I thought the problem was that they had stopped lending some time ago.

Steinbeck or Dickens? Across the US, the public is more and more often being stuck with the cost of burying the unclaimed bodies of the indigent. Another cost of the recession, as are some of the deaths.

Down and Further Down: The downtrend in the value of the dollar stems from the US economy, which is so weak that any increase in interest rates will stymie recovery hopes. If you think that will lead to others viewing the US as weak, well it's still a more-or-less free country.

New & Improved: Previously the government has tried to help struggling homeowners by bribing lenders to modify mortgages. Results have been questionable, at best. So now the Treasury has a new program. It does nothing to modify the mortgages or keep people in their houses, but it does try to soften the language so as not to offend the people who are getting kicked out of their homes, and allows them “to make a graceful exit.”

Table Scraps: CIT, the loaner of last resort for millions of small businesses, is toppling into bankruptcy, and unlike Morgan Stanley or AIG, no one at the Treasury or Fed cares. Of course no one at the Treasury or Fed ever ran a small business and CIT's leaders never worked for Goldman Sachs.

Numbers Game: In 2001, while producing 2.5 mbd, ExxonMobil forecast it would produce 3 mbd by 2006. In 2006, it produced 2.5 mbd and promised to make it to 3 mbd by 2010. It's late 2009, ExxonMobil is producing 2.4 mbd and is going to spend $4 billion to buy into an oilfield that won't be profitable at less than $100 a barrel.

Program Notes: In Act One, the problem of deflation will arise. In Act Two, deflation will give way to inflation. In Act Three, inflation will give way to hyper-inflation. Or possibly it will be a long one-act play featuring stagflation, fresh from a ten-year run in Japan.