Saturday, February 27, 2010

SAR #10058/Weekender

The market has already priced in the bad stuff, they say.

Multiple Listing Service:  Sales of new houses in January fell 11%. Sales of existing houses fell 7.2%.  Both were... unexpected by those who think unemployed consumers are  rushing out to support the recovery, even while mortgage rates are on the rise.

Lottery:  Q4 2009 GDP was revised downward to 5.7% (and would have been less than 2% without inventory restocking), and the year's figure is down2.4%.  It's the worst full year contraction since 1946, when we were switching from making bombs to making babies.

Long/Short:  There are a lot of reasons the IMF cannot (and will not) help Greece, but the main one is the Greeks and their insistence they get a share of the proceeds – while the IMF would insist whatever money can be found should go to the international banks.

Bank Shot:  A chunk of ice the size of Luxembourg came loose from Antarctica and crashed into another big chunk and now both icebergs are bobbing in the ocean, melting away.  Researchers say the two could lower the oxygen level of the adjacent ocean, disrupt ocean currents, and change weather patterns around the globe.

Promissory Shortfall:  The UN has announced that not enough empty promises to cut CO2 emissions have been made to keep global warming below 2ºC even if, by some fluke, they were actually kept.

Asked and Answered:  Do toxins cause autism?  Quite possibly . It is likely something we have done to the environment that is doing this to us.

Oxymorons:  In order to insure the security and safety of the public, US military intelligence found it necessary to spy on the activities of Planned Parenthood.  And people wonder why Bin Laden is still at large – he doesn't go to Planned Parenthood meetings!

Perfect, Just Perfect:  Senator Bunning (R-KY) single-handedly blocked extending unemployment benefits for those who have been out of work the longest.  Senator Kyl (R-AZ) has estated better reasons.

Me! Chose Me!  The head of the IMF wants to be given the power to regulate the world's financial systems.  All of them.  For our own good.  Seen any flying pigs lately?

Expect The Unexpected:  No, it's not a Monty Python bit, bad economic news is always unexpected.  Except 'round here.

Pig, Poke:  Moody’s - having blessed them when they were new – now says losses on sub-prime backed securities will amount to 19% on the 2005 vintage, growing to 48% write-offs for the 2007 vintage.  Alt-A securities will do a tad better, with only a 14% loss on the 2005's growing to a 35% write-off on the 2007's.  We hope these revisions haven't caused any inconvenience.

Lip Service:  “Small businesses are the heart of the American economy.” Heard that one lately?  Yet America is 76th out of the 77 richest nations when it comes to small-business ownership.  Since 1960, non-farm self-employment has fallen by 50%.

The Wisdom of Crowds:  A majority of Americans do not trust the government to protect the civil rights of citizens.  Corporations' rights seem secure.

Porn O'Graph:  The not-so-evil tax rates.

Friday, February 26, 2010

SAR #10057

What do we do when this doesn't work out?

Snow Jobs:  Weekly initial unemployment claims swept up to 496,000 – 36,000 higher than expected.  This is the highest level since November. Some are inclined to blame it on the snow.

Just Say 'No!'  Now Obama is going to reform health care by taxing worker's health benefits and giving the money – hundreds of billions – to the private, for profit health care industry.  And this is way better than what the Republicans want to do to you.  Change is not to be mistaken for progress.

Tarnished Silver Lining:  Orders for durable goods grew 3% in January, twice the rate expected.  But excluding the transportation sector, they fell an unanticipated 0.6%, the biggest decrease since last August.

Asked and Answered: Congressman Frank: “Do you think there is any realistic prospect of America’s defaulting on its debt in the near future?” Chairman Bernanke: “Not unless Congress decides not to pay.”

Watch & Learn:  Moody's has joined S&P in warning Greece that if it does not drastically reduce its budget deficits by cutting social services, public payrolls and pension costs,  it will suffer a multi-step cut in its bond ratings, making the bankers ever richer at the country's expense.  Of course this sort of banker blackmail would never work in the USA.

Box of Chocolates:  People is now defined to include corporations. Money is speech.  And Toyota is us.

Show Me The Green:  In planning for the new energy regime, the main constraint to consider is how much power at 20 cents a kwh will the economy be able to afford, not how much it would take to replace today's use.  Today's level of use is not sustainable at the prices alternative fuels will demand.  Wind, solar and ethanol have much higher costs than fossil fuels.  How much we'll need will depend on how much we'll be able to afford.

Saying:  Lead, follow or get out of the way.  Housing is a leading indicator – way down.  Employment is a lagging indicator – way down.  Stand back.

Scary Story:  Asian emerging markets no longer need to depend on the kindness of Western markets – they are recovering quite nicely trading with each other, the selfish brats.

Three Card Monte:  In oil availability, don't get fooled into watching for peak oil and don't sweat production figures too much.  But watch the net exports from the big producers – because we're going to have to get by on their leftovers, after the home folks fill up their cars.

Time and Again: Equipment financing was down 24% over January 2009 – which was pretty much the bottom.  The downturn reflects a lack of demand for financing, not a lack of financing.  If you don't think they're oing to come, you don't build it.  Or buy the equipment.

What Part of No Don't You Understand?  Being China's chief climate change negotiator is as challenging as being Lady Godiva's tailor – the world's biggest carbon polluter has no intention of cutting its greenhouse gas emissions any time soon, so all Su Wei has to do is say “No.”

Porn O'Graph: Here buyer, buyer , buyer.. c'mere buyer.

Thursday, February 25, 2010

SAR #10056

Our motto: contribute less, consume more.

Day Late, Several Dollars Short:  Alan Greenspan now says that the current economic collapse is “by far the greatest financial crisis, globally, ever”, including the Great Depression.  He's real glad it didn't happen on his watch.

Snow Job:  Mortgage applications were down 8.5% last week, seasonally adjusted. But not, apparently, adjusted for the snow.  Nearly 30% of all houses with mortgages now have negative equity – that's 11 million potential foreclosures.

Location, Location: The new US embassy in London will cost $1 billion, plus overruns and the usual graft.  The US embassy in Baghdad was a bargain at $700 million and the thing going up in Islamabad is well over $850 million and rising.  Neither of them has a moat.

One If By Land:  Admiral Mich McConnell, former director of national intelligence, says that if cyber-war broke out today, the US would lose. “National security and our economic security are at stake.”  And here I was worrying about my on-line medical records

Spade/Spade:  The National Association of Realtors wants Fannie and Freddie “converted into non-profits.”  I thought they already were.

Preview:  State tax revenues fell 4.1% in the fourth quarter, making it 5 declines in a row and all but certain that further cuts in payrolls (nearly a million more are expected) and services will be required as the states struggle to close a $180 billion gap in their 2011 budgets.

Debt Load:  According to the unvarnished data, deficit hawks who go around preaching doom and disaster are... well, wrong. And what they're peddling is a load of …. bad data, questionable assumptions and ulterior motives.

Ooops: B efore today's report on new house sales, economists predicted the extension of the homebuyers tax credit would lift sales from a nine-month low.  What the report said was that new single-family house sales fell 11%.  Why do these clowns still have their jobs?

Cautionary Tale:  Various politically motivated polls show that Americans no longer support the idea of lowering health care costs.  But in honest polls which accurately describe the health care reform legislation find just the reverse – Americans want and support health care reform.

'splain to me:  If there is no global warming, where did an area of Arctic ice ten times the size of California go? It used to be frozen but it isn't anymore.  Worse, there is nothing politically plausible we could do now that would prevent the Arctic from becoming ice free in a few years.  “I haven't met a single scientist who thinks there's anything we can do now that can save the sea ice in total. ...humans won't act unless there's a disaster.”

Rose Colored Glasses: In the magical world of the FHA, the coming drain on its resources is nothing to worry about – it can always turn to the US Taxpayer to bail it out.

Wednesday, February 24, 2010

SAR #10055

Remember, in politics perception beats reality.

Mission Impossible:  The objective of the current military campaign in Afghanistan's poppy capital is not the Taliban, not the poppies, and not establishing democracy (whatever that might look like when decanted from a Humvee).  It is, according to senior military officials, to win the hearts and minds of the American public and to convince them to back another five or six years of war.  The death of 1,000 US soldiers hasn't drummed up much support.

Problem, What Problem?  In the fourth quarter of 2009, the number of banks on the FDIC's problem bank list jumped 27%, to 702 banks with assets totaling $402 billion.  The FDIC says the deposit insurance fund is now $20 billion in the hole – and that's after raising $46 billion through the program that forced banks to pre-pay their premiums through 2012.  Now when banks fail the depositors won't lose their money, but they'll just have to give it back to Uncle Sam via taxes to cover the payments.

Who's On First?  AIG documents – that the Fed kept secret for over a year – reveal that Goldman Sachs originated most of the CDOs that brought down AIG.  After they sold the CDOs and knowing they would fail, Goldman then used their insider knowledge to stick AIG with the CDS to cover the loses they knew were coming. “Slithering” was the descriptor used.

Just In Time:  Just as it was looking like Peak Oil Production had arrived, the cornucopians discovered it was really Peak Demand.  So the stable production from 2005 forward is now explained by claiming that price has nothing to do with demand, it's just that modern economies no longer need as much petroleum.  Is that whistling I hear, over by the graveyard?

Sturm und Drang:  Niall Ferguson says that (A) US debt levels are unsustainable, (B) US debt will never be repaid, but that A and B do not matter as long as (C) we all pretend we've not figured out A & B, because when we reach C, (D) the empire may collapse suddenly – due to excessive debt.  It has, he says, happened many times before.

Dueling Banjo's:  Either the 20-city Case-Shiller index fell 3.1% last year, or home prices in 20 U.S. cities rose in December for a seventh consecutive month, indicating the recovery is well under way.  Your choice.

Size Counts: In Missouri – where school budgets, women's shelters and child-care subsides have been cut - it still pays to buy the bigger boat.  A yacht, if possible.  They are tax exempt, while bass boats are not.

Flushed: Subtropical waters – think Gulf Stream – are flowing along Greenland's coasts reaching Greenland's glaciers, accelerating the loss of ice. These increased warmer currents might also warm methane hydrates on the continental shelves, speeding their release.

Perspective:  Goldman Sachs says that the amount of Greek debt they helped manipulate – 2.36 billion Euro - was “a rather small amount.”  True, true.  Remember that Goldman only got $300 million for this bit of skulduggery, “a rather small amount” compared to their $16.2 billion in bonuses last year.

'Gonna Take My Ball And Go Home:  Shell has told Nigeria that any oil industry reforms that cut into profits would force the oil majors to leave the country, leaving it with no oil income instead of the pittance they now get.

They Hold Their Noses:  There are over 100 Republicans running around criticizing Obama's stimulus and insisting that it produced no jobs while conveniently forgetting that they rushed up to the trough and took as much money as they could. Even Schwarzenegger wonders how they can do this.

Is It Twilight Yet?  The era of sustainable capacity from Saudi Arabia's vertically drilled oil wells ended about 1990.  The era of sustainable production from their horizontal wells ended in 1997... In 2003, Saudi Aramco switched to Maximum-Reservoir-Contact wells.  Now the MRC's are out and the Saudis are pumping CO2 into the reservoirs to force out the last dregs.  The law of diminishing returns doesn't seem to play favorites.

Reading Assignment:  A paean to Palin.

Tuesday, February 23, 2010

SAR #10054

until the whole thing crashes.

Deus Ex Machina:  It is not just the Greeks who played sophisticated finance games with CDS – think Spain, Portugal and others - and it is not just German Landesbanks – insert the names of several big European banks here - that bought them.  But one thing common to all of these transactions is that someone must have insured these risks.  A lot of people suspect that that 'someone' was AIG and that now the US taxpayer (who owns AIG, despite the executive bonuses) will have to make good on both the banks' bets and the sovereign debts.  Will the US bail out Greece? Yes, it will have to.

Get Shorty:  About 16% of January house sales were 'short sales', Move-in Ready REO and damaged REO houses accounted for 13% of sales each.  A few non-distressed, non-foreclosed houses were also sold.

Coup de Coup d'état:  Turkey's Islamist-leaning government has arrested 21 generals and admirals in connection with a 2003 plot to overthrow the government.  The Turkish military - which sees itself as the protector of the democracy Ataturk founded, has regularly overthrown governments it viewed as blurring the line between mosque and state.  The seven year delay and the government's hazy explanation of the plot suggest that Prmie Minister Erdogan's government may be reacting to something other than the stillborn 2003 plot.

Speculating:  Back in 2008 when oil went up, up, up, the allegation was that speculators had driven the prices up.  But now, with the world's economies in the tank, oil is still $80 a barrel.  Maybe the rise in oil prices had something to do with supply fundamentals.  Maybe the same 'supply fundamentals' will drive the price up once again if we ever get to a recovery.

Details, Details:  Obama has announced the US will throw another $1.5 billion at “out-of-work home owners to prevent preventable foreclosures." Details are so far scant, but the money will be aimed at those states where Democrats are facing tough elections foreclosures have been exceptionally high.

Shin Bone Connected To The...  As unemployment rises, sales of sausage biscuits and eggy tacos fall.  If you're not driving to work, you don't drive by the drive in.

About Wishes:  The Ohio Coal Association and the State of Texas want to take the EPA to court, alleging that CO2 and the global climate change it causes are not harmful to humans.  Did they think this through? Isn't this just the briar patch Dr. Hansen and his fellow scientists desire:  A public and impartial court looking at the evidence, instead of a group of PR lackeys manipulating public opinion?

Them That Know, Sell: US insiders continue to be heavy sellers of their companies' stocks.  The same is true in Hong Kong.  How long before the votes are counted?

Big Boys Don't CryJohn McCain has finally figured out that Paulson and Benanke lied when they said the $700 billion TARP was going to focus on the housing crisis.  The TARP IG says Paulson told some other fibs about the “too big to fail banks” and some members of congress say the Bush administration warned it would impose martial law if TARP wasn’t passed.

Proverb: Reform doesn't come from bipartisanship.

911, What Credit Card Will You Be Using?  In Tracy, CA, the first thing the 911 operator wants to know is your 911 account number (a $48 annual fee lets you have unlimited medical emergency calls) or how you are going to pay the $300 fee it takes to get the emergency service on a one-time basis.

Multiple Choice:  The United States, the world’s largest economy and is no longer a viable economic player.  (a) True.  (b) False. (c) Shhh, you're not allowed to think that!

Calling Up the Reserves:  Ambac, MBIA Inc. and Assured Guaranty, the three largest insurers of state and local government bonds, have set aside $520 million to pay claims on securities that government budgets can no longer pay.  That is four one-hundredths of one percent of the total amount insured.  Are you feeling lucky?

Porn O'Graph:  What do you suspect happens in a country that depends on credit when banks do not extend credit?

Monday, February 22, 2010

SAR #10053

Are we past the point of no return?

New Kid in Town:  Senator Scott Brown, sympathizing with the Austin tax-bomber:  ‘No one likes paying taxes, obviously’.  Wonder how he feels about bombing Federal Buildings in Oklahoma City?

New and Improved:  The downward spiral for American workers that began with shipping jobs overseas and accelerated with globalization has produced a cohort of long-term unemployed/unemployable, the newly poor who used to be middle class and now are being forced onto the public dole – quite probably for many years to come.  Demographers and social commentators will come up with a new name for them. Perhaps Busters instead of Boomers.

PS. I Love You:  "Effective April 1, 2010, we reserve the right to require seven days advance notice before permitting a withdrawal from all checking accounts... “  Citibank.

Redefined:  Within Monsanto's executive offices GM has two meanings – it can stand for 'genetically modified' when applied to certain crops, or for 'greatly manipulated' when referring to the scientific research on those same crops.  Or so says the man who ran their operations in India for eight years.

What A Strange Idea:  Dutch sentiment against continuing their nation's part in the American war in Afghanistan caused the coalition government to collapse. Imagine, a nation where public sentiment matters...

14 June 1982: Argentina is trying to regain the Falkland Islands via sanctions on British banks with ties to the exploratory oil drilling now underway – which Argentina claims violates its sovereignty.  Two things: (a) why not wait and see if there's any oil worth fighting over.  And (b) Remember what happened the last time they tried to kick the Brits out?

Damned If We Do, More Damned If We Don't:  Denialists want to do nothing to avoid the onrushing train wreck that is global warming, claiming scientists admit that the models are less than perfect.  But what the denialists intentionally misunderstand is that the uncertainties (from the politically arrived at 'consensus forecast') are far more likely to understate future warming than exaggerate it. MIT's model now shows that there is no chance (a zero probability) of keeping this century's temperature rise to 3.6ºF - the supposed 'goal' of the failed effort in Copenhagen.   The most likely (median) increase by 2100 is 9ºF, if we sit idly by.  So by all means, let's sit idly by – it'll be a great adventure!

Bottled Water:  Chesapeake Energy wants to truck 663 million gallons of chemical-laden waste water from its Pennsylvania 'fracking' operations to New York and dump it into a hole adjacent to Lake Keuka, one of the scenic Finger Lakes.  Another argument for good fences.

Point of View:  Either Saudi Arabia's oil production fell 274,000 barrels a day in December, or they increased their spare production capability by that amount.

Test:  California's giant PG&E will spend over $25 million this year on a statewide ballot initiative that would mandate approval by a two-thirds majority before a local government could enter the electricity business. Guess which side they're on.  Bonus:  Guess why they want more than a simple majority.

Quoted:  Stuart Brand – of Whole Earth Catalog fame – now says that it is too late for 'back to nature' to save us.  "To survive now we need nuclear power, genetic engineering, giant cities.  We must manage nature or lose civilization."  Do I get to pick a side?

Porn O'Graph:  Out of every $1 in income gain made in the last decade, 65 cents went to one guy, while 90 other folks fought over 12 cents.  On average each got one tenth of one cent. The rich have won.

Saturday, February 20, 2010

SAR #10051/Weekender

"Our neighbors are our neighbors."Salaad Nur

Olympic Speed:  In January, US bank lending fell by $100 billion, a record annualized decline rate of 16%, the fastest rate on record.  This will make it hard for an economy that runs on credit to make to the podium.

Hidden in Plain Sight:  In the excitement about the 30,000 increase in new unemployment claims and the comfort found in having continuing claims unchanged (well, not much comfort for the 4.56 million that make up that number), what was missed was this:  The backlog of total unemployment claimants jumped 280k to 11.7 million.  As high levels of long-term unemployment become the norm, Goldman Sachs with exquisite timing and its patented tin ear, issued a report this week called "The Labor Market: Crawling Out Of A Deep Hole."

Patches: If the Greek debacle leads to some sort of hurried patch for the Euro and the European Monetary Union, it will eventually (and not all that eventual, either) lead to more patches.  They should either give up now or make it truly a single currency – the currency of a single nation.  Then the question would be, how long before the civil wars break out?

Inflation edges higher: If you are one of the diehards that continues to buy groceries and gasoline, your CPI rose 2.6% over the last year.

Innumeracy: Some are claiming that the end of the foreclosure crisis has arrived because – for the first time in 3 years - the number of homeowners falling behind on their loans is declining. Before you get all excited, consider this: Every month for the last 27 months the pool of homeowners has been depleted by foreclosures. Maybe the reduced number of delinquents simply reflects the greatly shrunken pool of candidates. Even the worst bankers must have made some good loans.

Little Boy Blue... Come blow your horn, the sheep's in the Meadow and Wall Street is planning another raid on Social Security.  Arm yourself with this quick but superb history of previous raids.  And Obama isn't looking after the sheep.

Just In Time:  It used to be that companies would first hire a few temps then later increase their staffing.  Now it seems that using temps has moved from “interim solution” to “solution”.

Can't Make This Stuff Up:  Goldman, under investigation for helping Greece hide the extent of its indebtedness and perhaps guilty of helping hide another $85 billion or so, has managed to get one of its alumni appointed as Debt Czar where his job will be to hide GS's involvement while increasing their profits.

Quoted:  "By failing to demand that torture stop and those who ordered it--like Cheney--be held to account, Americans are complicit in war crimes, just like the Germans who failed to stand up to Hitler were complicit in crimes against humanity."  I think he's talking about you.  And me.

Bandwagon:  Joining those health insurers already singled out for large (like 56% and 32%) rate increases, now the Medicare private plans that were going to be so much better than the government's plans and save you money too are... jacking up the premium 14%.  Stop worrying about peak oil prices and concentrate on peak premiums.

Closeout Sale:  For the 9th consecutive quarter new single family housing starts declined – to 71,000 started in Q4 2009, less than the 82,000 new homes sold.   An inventory clearance sale – prices reduced – everything must go?

Shock:  Wal-Mart same-store sales fell 1.6% last year. If not at Wally-world, where are folks shopping? Ah, there's the problem. But profits were up 22%, which makes you wonder...

Christening: Why do we have to call the war in Iraq anything other than what it is: Our War in Iraq? Do the innocent bleed less if Obama rebrands it? Can the guilty get away with even more?

Friday, February 19, 2010

SAR #10050

Given the limits to perpetual growth, when do we hit the wall?

The Story Thus Far:  The Fed raised the discount rate from .50% to .75%.  This is the rate the Fed charges to lend reserves to banks overnight.  This is either meaningless or the end of the world or a bit of psychological warfare or possibly a repeat of a giant mistake.   Or maybe it is just another illustration of how little reality actually means to the world of rumors, fears, greed and illusion that is modern finance.

Doing the Hustle:   Done your taxes yet?  Did you have to include any of the $140 billion that Wall Street paid the happy few last year?  Where in hell did these profits come from?  What do these folks do that's worth ten percent of that amount?   Did Goldman go from bailout - $13 billion plus whatever they hid – to billions in bonuses because they are clever, or because we're not?

Pounding:  Britain apparently forgot its New Year's resolution and went on a spending binge in January, borrowing 4.3 billion pounds when the plan was to save about that much.  By the end of the year the UK will be ahead of Greece in the budget deficit/GDP race.

Map & Compass:  Feeding Wall Street and its international siblings has cost the world's governments so much that by the end of this year total government debt will exceed a full year's GDP. And we – or they – are not done borrowing yet.  Future obligations, hurriedly and mostly secretly made, loom on the horizon, blotting out any chance the government, any government, will have of making good on its promises to its citizens.  Many of whom vote.

Misbehaving:  Deflationary expectations stubbed their toe on January's PPI, which was up 1.4% as food and petroleum rose (it was an uncomfortable 0,3% excluding them).  To go along with this bummer, unemployment claims were up 31,000, not down as expected. The 4-week average was essentially unchanged at 467,500.

Just So: I liked the headline so much I didn't read the article: “The Biggest Threat To Banks Is The Pitchfork-Wielding Public.”  So, we're starting to get through to them.

Truth as Propaganda:  HHS Secretary Sebelius assures us that the 39% hike by Blue Cross in California is not a fluke.  In at least six states increases in the 50% range have already been imposed, and more are likely to follow. The Administration hopes that this will encourage a letter or two to Congress.

Flashback:  All men may have been created equal, but lately some differences have come to light.  Mainly it's the rich – they are not like you and me.  While most of us keep on trying to get by, the top 400 American families upped their income by 31%, to an average $344 million.  Each.  A year.  Granted this was back in 2007.  And their effective tax rate was 16.6% - lower than most of the middle class.  You don't think there are overlords?  These folks took in (I refuse to say earned) more in the first three hours of the first day of the year than most Americans did in the whole year.  And now nearly 31% of the bottom 10% of Americans are unemployed and earning nothing. Shame.

Soggy Boggy Ground:  Permafrost – permanently frozen ground – has moved over 130kilometers (80 miles) north in the last 50 years.  If this trend continues great swaths of permafrost will melt in the foreseeable future, raising questions about the future rate of methane release.  Probably means a longer mosquito season, too.

Profit Motive:  There's something wrong when investors hope more people will go to jail.

Alphonse and Gaston:  After years of each party blaming the other for increasing deficits, the prophesied day of reckoning is at hand.  So now politeness steps in and each wants the other to step into the quagmire first. The Dem's are not going to win.  The GOP'ers are not going to win.  And most certainly, the public is not going to win.

Thursday, February 18, 2010

SAR #10049

The plural of anecdote is not ‘data’.

Sovereignty:  Gorge Soro's is back, betting against the fiat currencies – which is all of 'em at last count, but the pound and euro seem to be the immediate targets.  Italy is seen as the largest threat to the euro.  Some want the IMF to step in and save Greece the UK with austerity programs and the usual bag of tricks.  Anybody got a program?

Greenish Shoot:  US industrial production increased 0.9% January and the industrial capacity utilization rate rose 0.7%.

Definition:  A deficit hawk is a politician who voted for every pork barrel project that sent at least $10 to his/her home district and endorsed tax cuts, new entitlement programs, and a couple of unnecessary wars before finding the true faith.  Many have but recently converted from the church of “deficits don't matter' (aka Reaganism).

Housing - Bad to Slightly Better:    S&P claims there are at least three years of shadow inventory (repossessed properties, as well as distressed mortgages facing foreclosure) overhanging the housing market.  Maybe more, because mortgage applications are down, and a new wave of foreclosures is expected to hit this fall.  Housing starts were up 2.8% m/m in January, and 2.1% over last year.  This  unimpressive rebound is good because builders are not adding to excess inventory, but bad because builders  aren't building  many houses.  Sales of existing houses are expected to fall as interest rates  rise as the Fed backs out of the MBS market – if funding can be found at all.  Permits for new houses (as opposed to starts) were down 4.9% from December, as builders prepare for a slow-down once the Federal tax bribes expire.

Relapse: Capital One reports that credit card account charge-offs increased in January m/m, as did delinquencies. When a customer's account is charged off – thus lightening his debt - do economists count this as part of the supposed increase in savings?

Now and Then:  We can't afford to keep spending because we'll never be able to repay the debts and will end up inflating away our future.  But we must keep spending or we'll have no future.  Given it's suffer now or suffer later, later gets the nod.   A new and improved (and bipartisan and thus not going to do anything) commission - National Commission on Fiscal Responsibility and Reform – is set to find some way to have our cake and eat it, too.

Teaching Point:   Greece doesn’t own the printing press that makes its currency.  It can’t borrow to fund its deficits, it has to – suddenly and painfully - live within its means.  Greece's budget deficit is 12.2% of GDP, while the US deficit is 13% and growing.  But the US does own the printing press. Inflation beats blood, sweat and tears.

Illness:  If inflation is the cure, are we sure we want to be cured?  The key questions to answer before you take sides are these:  Will your wages keep up?  Will inflation eat away what's left of your retirement savings?

Clarity: Fog along the California coast has has decreased markedly over the past 100 years, which is a problem for the giant redwoods that depend on the humid fog to counter water loss due to summer's heat.  While experiencing more stress, the redwoods are not going to become extinct in the near term – but that's a human near term.  Redwoods have a different time scale.

Interesting Interest:  How much interest will the US pay on its debts? Simple, just multiply the interest rate times the duration and...  Nope. Depends on what the definition of interest is.  If you're interested, go read the article.  You'll lose interest fast.

Porn O'Graph:  You gotta play to win.

Wednesday, February 17, 2010

SAR #10048

Normal is a town in Oklahoma.

Contagion:  Greece is small potatoes; the UK may be the first major economy to come under attack for its excessive and unsupportable sovereign debt, some wonder if the sovereign swine flu will spread to the US – after all, it already shows many of the symptoms: budget deficits, possible ratings downgrades, and lots of short-term debts coming due. Merrily Lynch does not think so, but it recommends a large helping of fiscal austerity, just in case.  Germany has rejected the idea of bailing out Greece, insisting there is "no way around" Greece having to adopt painful austerity measures (or maybe not).  [Similar 'painful austerity measures' are pretty much what the deficit hawks have in mind for the US.]

Tough Love:  Not nearly as many mortgage modifications have been undertaken as was promised and even fewer have succeeded.   Over 70% of those that qualified – and most did not – will eventually fail anyway, so say to recent reports.  There are about 7.7 million houses in some stage of default/delinquency (they've reached another all-time high), and another 5 million to go through foreclosure over the next few years.  No wonder Treasury officials are worried about the next wave of foreclosures.

Role Playing:  The United States has become the world's policeman.  China is well on the way to becoming the world's banker.  Guess which pays better . The question, for both, is how long can you keep it up.

Smoke & Mirrors:  Foreign holdings of short-term U.S. treasury bills fell by $53 billion in December, and $500 million for all of 2009.  If the neighbors are not going to finance our foolishness and we can’t,  who will? 

Weather Report:  How bad the economy has been depends on where you fit in the class system.  The bottom 20% have undergone a depression. Those in the middle have experienced a deep recession, while those at the top of the heap have pretty much seen full employment and wish the rabble would just shut up.

Late News:  The Bush Obama administration is considering indefinite detention without trial or charges for enemies of the state.

Crystal Ball:  When the Fed stops buying up all the mortgages (a) mortgage interest rates will climb less than .75%  (b) mortgage interest rates will climb over 6%, or  (c) mortgage rates will be immaterial, as house sales will essentially stop.

Common Decency:  American politics happily and unthinkingly embraces exceptionalism, both at home and abroad (how else to explain invading Iraq & Afghanistan - or any other country we want whenever the mood strikes - or insisting that 5% of the world's population gets to consume 25 or 30% of its resources? ).  Our political life consists of a party which refuses to govern and another that is philosophically opposed to the idea of governing.  There are no rules, no concept of fairness or decorum or concern for the people or for democracy.  It is a matter of what you can get away with in a country suffering from electile dysfunction.

Duh?  Some complain that if American and European biofuel production goals are reached it will lead to higher food prices, at least 100 million more hungry people in the third world, and more crowding into slums as small farmers are forced off their lands.  Something should be done about those food prices.

Political Economics:  Shell says that if the UK would give it greater tax incentives it could make more oil and gas appear in the North Sea.  No geologists need apply.

Tuesday, February 16, 2010

SAR #10047

Stock markets mislead the logical.

Big Brother:  After careful consideration, the EU has decided to help Greece by watching carefully as Greece tries to solves its problems without any help from them.  Meanwhile the Greeks seem in no mood to save themselves and the Germans, who apparently will do the job eventually, are not thrilled about it.  Everyone will unite in blaming Goldman Sachs.

Teaching Point:  One of the first steps Greece took to tighten up its finances was to ban all cash transactions over 1500 Euros.  How they gonna know?

In Short:  There is not enough surplus productive activity in all of Europe to support the populations in the manner they've become accustomed to. The same is true for the US – but the US is still pretending otherwise.  There are no ifs, not for the Europeans and not for the Americans, short of a rapid retreat to some affordable level of existence.  It will not be pretty.  Not there, not here.

The Roof:  Global warming deniers say the science is faulty and rather than spending more on expanding the scientific investigation, we should put the money into Creationist Theme Parks.  It's like fixing a leak in the roof by taking off all the shingles.

Lies, Damned Lies, & Goldman Sachs: Investment brokers used to trade on their sagacity, now they're known for their duplicity. Will Goldman Sachs, caught with it's hand in the Greek cookie jar, be punished? Probably not. “There is a case to be made that the money center banks, in particular Goldman and JPM, are sometimes acting as instruments of US foreign policy.”   Quite possibly the reverse is also true.

Discount World:  Dubai World is seeking to restructure $22 billion of its debt by offering to pay 60 cents on the dollar.  Seven years from now.

State of the States:  Utah plans to do without 12th grade.  Nevada is rationing day care diapers.  Harrisburg, PA seeks bankruptcy protection.  A town in Rhode Island fired every high school teacher.  And Los Angeles has a $212 million budgetary shortfall that will approach $500 million next year.  Despite the begging, the Senate does not seem inclined to hear the pleas of the people, for fear that in saving them they'll be blamed for deficits.

Turnabout:  Government regulators used to monitor the stability of their banks.  Now the banks watch the governments, worried about their stability.

Aftermath:  In many markets over 50% of homeowners could not buy a house if they did not have federal help in the form of the tax credit bribe, the FHA insurance scam, and Fannie/Freddie buying up the paper – which the Fed then buys.  These programs are all coming to an end.  So is whatever it is that's passing for a housing recovery.

Where Are We Going?  The future seems “unremittingly bleak” when the social and cultural consequences of diminished expectation, chronic unemployment and sullen separation from the American Dream descend to crush much of the population.

Oxymoron:  People are debating the future of the Euro as though it had one.

For Your Entertainment:  For the economy to recover, the consumer has got to spend, spend, spend.  They've been told that and still insist on “saving” - which is becoming a cultural norm and is not going turn out near as well as the savers think.

Nothing Happing Here:  Researchers report that the world's oceans are acidifying at the fastest rate in the last 65 million years.  I doubt it, for the world is only 6000 years old . Besides, what's a little acid indigestion in the great big ocean?

Reposessions:  Of the $730 billion in outstanding private and federal student loans, 60% is not being “actively repaid.”  They’re just overdue, like library books.  Education – an investment in your future.

Porn O'Graph:  Parallel universes.

Monday, February 15, 2010

SAR #10046

Producing numbers isn't the same as producing wealth.

Asked and answered: Can Eurobanks survive a Greek default?  Probably not, certainly not without massive government bailouts – which seem unlikely to be offered. Société Générale is not enamored of bailing out Greece: “Any 'help' given to Greece merely delays the inevitable break-up of the eurozone.” That's  French for 'Let 'em freeze in the dark.' But the problem is not going to go away (although it may be temporarily 'solved'). It may have begun in Greece, but it is spreading to Portugal and Spain.  It is contagious and virulent and is unlikely to remain confined to just these small economies.

Seems Like Old Times:  US rockets killed 12 civilians in one attack as the search for hearts and minds got started in Helmand province.

Orientation:  Some folks – mostly those who make more money than most of us – admit that the US is unequal in terms of income, but claim that the US “is an extremely mobile society from year to year”.  Yeah, downward of late.

Name That Tune:  The US imports most of its manufactured goods, exports mainly raw materials. It is dependent on foreign loans, has a malfunctioning public health system, has immense disparities between the wealthy and the population at large.  Just like most other Third World countries, except they are often kleptocracies.... oh, wait!

Breaking the Good China:  A lot of money managers are (still) infatuated with China, pointing to a decade with an average GDP growth of 9%. But that was based on exports.  Now the 10% growth is based on lending – a 27% increase in loan-to-GDP ratio.  That's a lot of money.  It could become a lot of inflation and it certainly is a lot of credit.   We know what comes after “a lot of credit.”

Time Marches On:  The 5.6 million Americans drawing “extended” unemployment benefits will start tumbling into the mist next month – up to a 5 million will be without any income by June.

Be Very Afraid:  Soon the Fed will begin raising short-term interest rates and reducing outstanding bank reserves.  But don;t worry, Mr Benanke says “we have the tools to reverse, at the appropriate time, the currently very high degree of monetary stimulus.  We have full confidence that, when the time comes, we will be ready to do so."  Full confidence, that's what the man is full of. Confidence.

Good News/Bad News:  The good news is that you've still got a job.  The bad news is that you are paying for all those who've already lost theirs.  Or your children will.

Atlas, Shrugged:  Rep. Paul Ryan, ranking Republican on the House Budget Committee, has put out a new “Roadmap for America's Future,” which proposes the everyone under 55 should not get Medicare when they retire, but would instead get vouchers with which to enrich private health insurers.  But don't worry, Newt Gingrich is there to save the day: “Don’t cut Medicare. The reform bills passed by the House and Senate cut Medicare by approximately $500 billion. This is wrong.”  Newt Gingrich?

Whose Counting?   The CBO says the US overall debt/GDP ratio will rise from 53% now to 77% by 2020. Moody's says the CBO is being modest and that by 2020 the ratio will be “well over 100%”.  Which is well into the danger zone – just ask Greece, Italy, Portugal...

Things That Go Bump In The Dark Port::  A bunch of aluminum from Africa and South America ended up in some ports in northwestern Japan. Suspicion is that it is Chinese aluminum that has been declared surplus to requirements and quietly dumped.  In that Chinese buying has supported the commodities market for the last year, this may be a bad sign for the market.  See your doctor if symptoms persist.

Tailoring:  Asked about the Bush administration's claim that torture was 'legal' – despite both US and international law to the contrary - Cheney said that the Justice Department arrived at the legal opinions their masters desired.

Mea Culpa:  We'd like to blame Wall Street. Or the Government. But today's economic problems stem from our demand that we be pandered to, that we deserve more, that we are entitled, and that we should be able to get without saving, without even working. We wanted to believe in magic, but choices have consequences.

Saturday, February 13, 2010

SAR #10044/Weekender

The losses are still there, and they've grown.

It's All Greek to US:  Number six on the debt/GDP ratio list is the United States, not that far behind Greece and headed to the same sort of struggle to even begin to get back in balance.  Worse are the individual states – and not just California - New Jersey took the spotlight away from Nevada by announcing a “fiscal emergency” and cutting $475 million from schools, $62 million from higher education and $12 million from hospitals – all together a $1.6 billion freeze - amid the usual blah-blah about “move efficient and effective....”

Click Your Heels:  China reports that its electricity consumption increased 40% y/y in January.  Magical.

Speed Bump:  The Congressional Oversight Panel says that in 2011 “every American will be affected” as US banks stand to lose $200 to $300 billion on commercial real estate loans.  Nearly half the $1.4 trillion in CRE loans falling due in 2010-2014 are currently underwater, endangering 3,000 small US banks.

Past / Prologue:  The Obama administration wants to push Bush era monitoring of cell phones onto firmer legal grounds – not that there's been any letup in monitoring you.

Pace Yourself: The difference between inflating our way out – where the dollar becomes worth less (and eventually worthless), and sovereign default – where the dollar becomes worth less (or worthless) overnight, is timing.  Safe, as in the dollar is a 'safe haven' depends on a great deal of self-deception, what Coleridge called “the willing suspension of disbelief.”

The Best Medicine:  Jon Stewart's 7 minute skewering of the GOP's “It's a trap! It's a trap!” response to an offer of a public discussion with the president on healthcare is worth the attention.  Take notes.  If you're old enough to remember the negotiations about the shape of the negotiating table back in the Vietnam era, you'll feel right at home.

Perfectly Safe:  It has been determined that a mud volcano in Indonesia that has pumped out 100,000 tons of mud a day for nine months, covering 3 square miles to a depth of 65 feet, is the result of drilling for gas. But 'fracking' in the Marcellus Shale is perfectly safe.  So far.

Quoted:  “The present is a tunnel between the past and the future. It might be more or less lit and we think we know our immediate direction and route. Otherwise what is going on outside is beyond our most frantic efforts.” -  Demetrius

Cost of Unemployment:  Unemployment cost the US about $150 billion last year.  But that's just the beginning, because the long-term unemployed are likely never to return to their former income levels.  And these costs fall primarily on the poor and the unschooled. The increase in long term unemployment will widen the chasm between the haves and the have nots, to the detriment of the political health of the nation.

Veto! EU lawmakers have refused US demands they let NSA “share” European banking data and insisted that EU standards of privacy be maintained.

Almost There: One in eight (12.4%) stores in the town centers of British cities have closed during this downturn – making many streets look like abandoned American malls. In some smaller towns the percentage of closed shops reaches 25%.  Let's hope they're not leading the way.

Mother Hubbard:  US corporations have stuffed $1.18 trillion in cash into their cupboards.  Companies don't spend money on expansion (or even re-hiring) unless they think there's profit to be made.

Porn O'Graph:  Them that has, gets.

Friday, February 12, 2010

SAR #10043

There's a difference between 'say' and 'do'.

Exceptionalism:  Why does the US get away with doing the same thing the Greeks are doing?  Because the US has never repudiated a penny of its debts, while the Greeks do so on a regular basis.  The US simply slowly erodes away its debts with relentless inflation.  All governments eventually default, including the United States – but better to do it slowly, so as not to scare the horses.

Back to the Future:  Republicans say they want to start all over and “do healthcare right.”  They said the same thing in 1994.  While 63% of all voters want comprehensive health care reform, the GOP does not.

Arcana:  The Fed has approved membership in the Federal Reserve System for a subsidiary of the Depository Trust & Clearing Corporation – the Trade Information Warehouse – as the legally accepted global repository for over-the-counter credit derivative transactions.  This membership means the Fed will guarantee all CDS transactions through the Warehouse.  That's a “gross notional value of $25 trillion”, and whatever portion of that goes south will be made whole by the taxpayer.

Fact Check: When Obama cited a 4% to 7% savings rate as “high”, he misspoke.  Yes, the administration would like to see the consumer consuming and running up more debt, not saving money, but 4 to 7 percent is not - historically – high. 10% is about average.  It's his way of paraphrasing his predecessor's urging the citizenry to get out there and shop.

Unbiased View: T he head of Russia's Gazprom has advised the UK that plans for thousands of wind farms should be scrapped in favor of building more gas-fired plants.  And he knows where they can get some gas, too.

Ups'n Downs:  While January's foreclosure filings were down 10% m/m from December, the experts say the same thing happened last year and foreclosures will surge this spring as attempts to put off the inevitable phase out.

Complexity and Dependence:  Our ancestors had the knowledge and skills to walk into the forest with an ax, a rifle and some livestock and make a life.  Today, if the power goes off we become nervous, worried that the TV and the Internet might be off for hours.  For most of us, it is the government that makes civilization possible - water, sewers, public health, roads, buses, and yes, even snow plows.  What will we do when the complex interdependent network that makes the whole thing work stops working? How much of it should we let the GOP starve?

Footwork:  Fannie and Freddie are planning to buy back from their mortgage-based securitizations those loans that are 120 days or more delinquent.  They will, of course, pay 100 cents on the dollar and end up sitting on stack of relatively worthless mortgages.  This accomplishes two things – it increases the marketability of their MBS and masks the continuing deterioration of the housing markets.

Up, Up and Away: In the Sierra Nevada, over the last 35 years various butterfly species have moved ever higher up the mountains to escape warmer temperatures in their original habitats.  Those that reach the mountaintops, having done the best they can, have "nowhere else to go but heaven."

Mistaken Identity: The war on terror has actually been a war on the Constitution.  The loss of habeas corpus was bad enough, but it was followed by indefinite incarceration without a trial or even charges.  And torture.  Now it is “defined policy” that the U.S. government can murder its own citizens abroad on the sole basis of some unidentified authority judging them to be a threat to the Constitutive.  No arrest, no trial, no conviction - just execution on suspicion of being a threat.  Previously, citizens (at Waco and Ruby Ridge) were killed by accident.  Now it's policy.

Hide in Plain Sight:  Why is there a large 'shadow inventory' of not-quite foreclosed houses?  Because keeping the house in the owner's name lets the bank duck the taxes, avoid paying the utilities and any homeowner's fees, and skimp on maintenance.  But the biggie is that they don't have to take the loss and if they own other houses in the neighborhood, it helps artificially keep up appearances and prices.  But the gap ( pretty chart) between serious delinquencies (about 6.5%) and foreclosures (at 2.5%) insures that the un-foreclosed cannot stay that way forever.

Thursday, February 11, 2010

SAR 10042

Maybe it will all work out.

Indoor Game:  While the anti-science crowd goes on about record snowfall, climate science predicts we will see more extreme precipitation events year-round as warming puts more moisture into the atmosphere. This has been the warmest January in the 32-year history of satellite records.

Just Say No:  Rachel Maddow dismembers the GOP in ten carefully documented minutes.  Give a listen.  If you're with her, it's great fun.  If you're still with them, maybe some light will seep in.  None of this is secret. The GOP no longer stands for anything, does not care about policy or governing, and is not susceptible to embarrassment.

Tides:  Imports up, exports down, net a minus $40 billion.

Money For Nothing:  Remember all the money the Fed spread around to encourage banks to loan it out?  The money the banks loaned to the Treasury instead?  Now, to keep the banks from loaning it out and pushing up inflation, the Fed will pay them extra interest to park it with them as 'excess reserves'.  Win-win for everyone but the taxpayers.

How Green Is My Valley:  In the eastern Sahara camels now graze in areas barren for hundreds, perhaps thousands of years.  Acacia trees and shrubs are growing, birds and gazelles are flourishing.  This trend has been underway for 20 years.  Even satellites have noted the greening of the Sahel.

Our Freedoms: Some quick thinking TSA officers spotted a student using flash cards to study while waiting for his flight and detained him for five hours as they tried to figure out if studying Arabic was sufficient reason to incarcerate him permanently.

Early Birds: Chinese authorities have instructed holders of US assets to dump everything but Treasuries and government guaranteed paper from GSEs.  Is this the first robin of a higher interest-rate spring?

An Observation:  There is a small but vital distinction between supporting the United States and supporting the government of the United States.  One is theory, the other practice.

Check-Up:  Yet another poll shows that the majority of Americans want lawmakers to pass a “comprehensive” health reform bill.  Including a public option.

When Will They We Ever Learn:  Out of the depths of the Great Depression came the labor movement and a steady diminishing of the inequality between the bosses and the rest of us.  Then in the Reagan years the owners began to claw back their unequal share and have been widening the gap ever since.  They've even conned many into thinking it's a good idea, a good idea that wages are lower now than in the 1970's, a good idea that Wall Street executives make tens of millions in bonuses while children go hungry and millions are without health care.  Brother can you spare a dime?

No Pain, No Gain:  Rats given electric shocks while doing a task to earn food pellets stop working.  If they reward is chocolate, they ignore the shocks and keep on working.

Magical Mystery Tour:  A photo-journalist working in Iraq for Reuters was dragged from is home in the middle of the night, incarcerated for 17 months and then released.  No charges, no explanation.  Just one of many foreign journalists who have been arrested and held without charges by the US military in Iraq.

Walk In My Shoes:  A racial-minority group in Oregon plans to offer scholarships to white kids who major in race relations in college.

On Your Mark:  The downturn is not over, it was put on temporary hold through enormous government spending and debt.  There has been no revival of actual productive enterprise, no expansion of jobs or wages.  The bounce in GDP and the markets is due to the Fed's massive money expansion – it is an illusion.

It Can't Happen Here:  Germanys highest court – in what is seen as “a good day for children and families” - tossed out the country's welfare program, finding it unconstitutional because it did not guarantee a “dignified minimum income” for recipients.

Porn O'Graph:  Confirmation, hockey sticks are bad for you.

Wednesday, February 10, 2010

SAR #10041

Only the richest and the poorest breed indiscriminately.

Ticket To Ride:  Some add up all the debts the US has and will have and conclude that US Treasuries should be rated as junk bonds.  True enough, but that ignores the rather serious observation that even though the US will eventually inflate away its debt, it is the only game in town.  Gamblers gotta gamble – they all know the game is rigged against them.

Growth Industry:  Folks have figured out that Fannie and Freddie (and Ginnie and FHA) are actually in the foreclosure avoidance business, and business is booming.  The only way to prevent foreclosures is to prop up the price of houses – so they're assured a steady stream of work for years.

Foreign Aid: One third of every dollar in US aid to Haiti goes to pay US military expenses in delivering aid to Haiti.

Too Much Doom:  Predicting imminent doom has become such a popular  cottage  industry I'm thinking of switching sides and becoming a booster.   But they've gotta change the flavor of the Kool Aide first, I can't stomach the current flavor.

Be More Afraid:  Al Qaeda has made attacking the US by July a high priority.  Doesn't mean they're going to, just that they'd like to.  So says Dennis Blair, our Director of National Intelligence.

Away” Found: There have been several international attempts to slow the trashing of the oceans.  They have failed.  The net effect has only been the warm and fuzzy feeling generated by fooling ourselves.  Our oceans have become vast garbage dumps.

Explicate:  "They're not knowin' what are we gonna do if we don't have Tea Party support."  Winning submission will be sent to Ms. Palin.

Chorus:  Richard Branson has become the latest to suggest that the world's economies might just want to do a bit of preparation before the oil crunch arrives, an event he sees descending on the world by 2015 and making the current credit crunch look like an appetizer.

Lowest Common:  Two Democrats have joined the Republicans in trying to prevent a fair civilain trial for the kidnapped, abused and tortured 'suspects' held at Guantánamo.  Why Republicans fear a public civilian trial – other than the possibility of not-guilty verdicts – remains unclear.

Blood in the Water:

How they got there doesn't matter, the PIIGS do have unbalanced budgets and high debt/GDP ratios.  So does the US, for that matter. That’s not the point – the point is vulnerability.   And certainly Greece, with the population of LA and the area of Kentucky – isn't worth all the noise. Its total governmental debt (300 billion Euros) is pocket change, and discovering it once again exceeded EMU budgetary guidelines is hardly shocking.

Sooner or later the EMU, Germany and France, the IMF or some deus ex machina – will bail out Greece.  Probably not until the Euro falls to a level Germany wants, but eventually.  Ditto with Portugal. And the bailouts will come with draconian conditions.

And that's the teaching point the banksters of the world are out to make. Conditions?  Go re-read Naomi Klein's Shock Doctrine. The PIIGS have the one thing the big money boys are after – the money that goes to their extensive social programs, so wages will be wrenched downward, pensions diluted and the retirement age extended, public services will be curtailed, social programs gutted and as much as possible sold off.

The object is to divert as much money as possible from the workers and social programs to the bankers. Once that's accomplished and the example set with Greece and Portugal, then the bankers can go after other social democratic states. - ckm3

Tuesday, February 9, 2010

SAR #10040

We refuse to accept a future that is already here.

Confidence Man:  Geithner says the US will never, absolutely never, lose its Aaa debt rating because the world has confidence in the ability of the US to live happily ever after.

Whose Default Is It?  Just a reminder:  It's not Social Security that is driving us to the brink. It's the giveaways to banks and – more importantly – the ever growing defense establishment.  Defense spending has grown faster than Social Security over the last decade, and in the future, interest payments on the national debt will grow much faster than either.  For Social Security to fail to pay benefits, the US Government would have to default on paying its debts.  If that happens, Social Security will be the least of our concerns.

Older News:  Is the Fed Chairman's job simply to instill confidence?  Quite possibly, for the Fed has been “manifestly ineffective”, with a record of “deep and unrelieved inconsequence.” And the chairman hasn't instilled much confidence of late, either.

The Fog:  The future, like the fog, creeps in on little cat's feet.  Business as usual is quietly coming to an end around us and a new world – for which few of us are prepared – is slowly forming all around us, unnoticed.

Black On Black:  There have been a number of reports of a “secret” meeting of the world's central bankers in Australia over the weekend, but no reliable reports have surfaced on what was accomplished.  ECB Chairman Trichet left abruptly to attend another secret meeting, this one on the Euro.

Another Victory:  China has signed a 20-year, $69 billion agreement giving it access to millions of tons of Australian coal.  What'd you do to secure your future this weekend?  China says it didn’t happen.

Lawyers, Again:  If you offer to hide a depositor's money from the tax man and don’t,  you must pay the tax cheat’s taxes.   So the court ruled.

Laughingstock:  All empires eventually collapse and fade into history. The US seems intent on exiting to derisive hoots of laughter at the thin charade its government has become.

Consider the Source:  “Reports claim that missiles from a US drone killed …”  Where's the reporter stationed?   Where'd the info originate?  The US is running a 'secret' war in Pakistan, yet seems to be the main source about said secret operations.

How Long Has This Been Going On?  'Serious delinquencies' on prime 'jumbo' mortgages increased for the 32nd consecutive month.  Currently 9.6% of all jumbo's are not current.

Be Careful What You Wish For:  A lot of us think Palin's a joke.  What if the joke turns out to be on us?

Street Light:  It's easy for the BLS and economists to gather data from big business – but that makes it easy for the data to be skewed ('sampling bias') when it comes to employment.  Half the people who work, work for small businesses, and that's where new job formation generally occurs.  The supposed recovery may simply be bad data.

A River in the Sea:  The Gulf Stream has veered from its  'normal' course across the North Atlantic to warm Great Britain and now is snuggling up to the West coast of Greenland.  Europe's going to sue for alienation of warmth and affection, especially warmth.

Porn O'Graph:  Equality, or more for less. They're getting our jobs!