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.