Spoke Paul Vigna, WSJ, re the ECRI, a private index that is regarded privately as a careful leading indicator of economic activity. The bad news is that the ECRI has now gone negative to -10.5. What does this mean. Everytime since 1980 that the ECRI has gone beloew -10.0 there has been a recession in 13 weeks. How can this be? We are in recovery? Yes, we are in recovery, and this makes the ECRI very worrisome to the traders. The ECRI climbed from the December 2008 lows of the last thirty years, -29 plus, to a recovery in early 2010 to positive numbers. Then this sudden reversal of the last few months. What now. Joe Brusuelas, Bloomberg, points to the European bank stress test results. The seven banks that failed, the 84 that passed wil now come under the scrutiny of the smart money traders who will do their own stress tests with the bank numbers. The European stress test was deliberately easy to pass. For example, the Greek banks were tested with bond losses of 23%, whereas the average losses of bonds the last part of the 20th century was 46%. The usual turmoil and doubts starting Monday 26. The underlying tale is the extreme caution for the remainder of the waiting time till the Election. Joe Brusuelas asserts there will be no credible rally. Waiting on the New Year. And housing starts will wait until 2012. If you can trade the downside, or the volatility, enjoy. For now, quantitative easing is available for the Fed, not much else.
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I don’t get much pleasure in bashing the president. Neither do I get much pleasure from hearing the president being bashed. And I suspect that most of you who read this blog are getting tired of it as well. For far too long I’ve been posting comments that you’d have been entirely justified in skipping over because you already knew what I was going to say. And it would have merely meant that you had already moved beyond. ’Beyond’ does not mean wallowing in cynicism, cheap shots, and burying one’s head in endless social and market minutia. It means looking past what we are now seeing and can no longer change.
The simple truth of the matter is that we’re all collectively heading to a place where we’ve never been before. And we’re scared. Obama isn’t the problem. He is just the most accessible manifestation of our overall sense of alarm. No matter who had been elected president back in 2008, he or she would have brought us to the same place. We all are subject to the tide of history which is greater than ourselves. The fact is that our shoreline stands seriously eroded and any protective measures we might take this late in the game would turn out to be woefully inadequate.
To begin with, it’s all been decided already within the highest levels of academia. They’ve set our course and stamped it with their seal of unanimous approval. Conservatism has lost the argument. There was never any possibility of compromise. To undo anything now would require a revolution even greater than the one we’re presently experiencing.
I am an American, first and foremost. I am clearly not a Socialist. As such, I am not a Democrat. This is because history tells us that socialism does not work. I realize that for such a statement to mean anything, one has first to reach some understanding of how one determines if something works (or not).
Clearly, Socialists think that socialism works - that it is fairer, kinder and more compassionate. I would gladly forget history and even stipulate to that much if I thought the people at the top actually loved America. I’ve heard the argument that proper socialism can only happen here in America; that the reason it has failed in other places was because they were not yet ready; that these had not yet gone through the necessary steps after which socialism can be effective. America, they argue, is now ready to embrace socialism precisely because it has gone through a period in which capitalism has been discredited. They view socialism as the highest evolution of effective human governance toward which capitalism is only a stepping stone.
Socialism, Marxism, Maoism, Communism, are all the same to me. I’ve never been able to split hairs so precisely as to ascertain a real difference. Again, I would stipulate to it all if I had even the slightest notion that those promoting these concepts actually loved America - but they don’t.
A man walks into a bank, pulls a gun and tells the tellers to hand over the money. They smile nervously and accede to his request. He leaves the bank a happy man. Maybe some hero bank guard gets popped in the process. At any rate, it’s over. The rest is left up to the cops and the insurance companies.
Now consider a man coming into that same bank wearing a suicide vest - say, on the last Thursday of the month, in the late afternoon when lines have been forming with people all cashing their pay or welfare checks. The man does not want money. He wants to bring down the bank. This is what I fear is happening in our nation right now.
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