It is difficult to strike the right balance in what I present here, I’ve been trying to work with half righteous indignation and the other half radical solutions but I’m not so sure that is the way to go.
Yesterday the markets opened in the dink, quickly returned to positive territory and then closed down as much as they had been up for the day!
Today they opened down and have so far remained there…as the rest of the world bleeds from the eye socket as well.
Naturally, this is all your fault! (in the opinion of the nation’s chief economist…)
Then he said something new: Consumers are depressed beyond reason or expectation. Oh, sure, there are reasons to be depressed, and the Fed chairman rattled them off: “The persistently high level of unemployment, slow gains in wages for those who remain employed, falling house prices, and debt burdens that remain high.”
However, Mr. Bernanke continued, “Even taking into account the many financial pressures that they face, households seem exceptionally cautious.”
Consumers, in other words, are behaving as if the economy is even worse than it actually is.
Economic models based on historic patterns of unemployment, wages, debt and housing prices suggest that people should be spending more money. Instead, just as corporations are sitting on their money, households are holding back, too.
If this, er, ‘statement’ seems a little ‘out of touch’ that’s because it is…but you didn’t need me to tell you that, did you?
Oh let us count the ways the Bernank misses the mark (I’ll refrain from taxing you further on the topic, this article goes into far more detail than I would.)
The latest ‘blurb’ floating around on the web is how the top 5% now accounts for almost 40% of all consumer spending in our new and glorious economy. I’m guessing this is a ‘parsing’ of the old standard where the top 20% accounted for 80% of all consumer spending.
Did they drop it to the top five percent because the top twenty, by now, probably accounts for over 90% of all consumer spending?
I mean hell, the labor force has shrunk to the level it was at twenty years ago, before our population crested the 300 million mark!
Which is to point out that we have a larger population and less of it is employed.
Does anyone else see a problem here?
But wait good citizen, it (naturally) gets worse!
Consumer borrowing in the U.S. rose by the most in more than three years in July, led by a gain in non-revolving credit that includes student loans.
Credit increased $12 billion after a revised $11.3 billion rise in June, the Federal Reserve said today in Washington. Economists projected a $6 billion gain, according to the median forecast in a Bloomberg News survey. The rise in non-revolving loans was the most since November 2001. [snip]
In fact, if you compare education-related borrowing to total borrowing, it throws up (no pun intended) a dizzying divergence. While consumer credit overall has drifted lower since the financial crisis unfolded (as it should), the amount of school loans outstanding has rocketed higher.
I wonder: does it really make sense for young people to be taking on extraordinary debt loads to finance an effort that no longer offers good value for money at a time when the longer-term outlook remains decidedly shaky -- at best?
Sounds like another disaster in the making to me.
How long, good citizen, can our (socialism for the rich and capitalism for everyone else) social model survive? Millions have lost their jobs and, as a result, their homes and the dearth of good jobs has resulted in a dearth of home buyers putting our loco financial institutions in a very bad predicament.
Let alone what this means for the enormous percentage of golden agers who planned to use their property as their retirement fund…
Nothing shreds social stability like having the financial system collapse just when a majority of the public needs it most, eh?
So this ‘persistent cluelessness’ is more than a little disturbing, isn’t it?
Why is it we can’t elect anybody who A.) has a handle on what’s going on, and B.) has the balls to do something about it?
Now I’d be the first to jump on the ‘our system of government is broken’ bandwagon BUT I’d fight hammer and tongs against letting the people responsible for the breakdown propose its replacement!
As I repeatedly admonish, nothing will get fixed until we place the laws we all must live under beyond the reach of the individual.
We will not enjoy the rule of law until we defeat the rule of man!
So, where does our ‘guy/gal with a clue’ come from? It could be YOU, if you’re the best of the best and have the track record to back it up!
A Simple Plan, an idea whose time has come!
Thanks for letting me inside your head,
Gegner
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