Archive - Aug 25, 2009

Someone get in touch with a medal for Michael for daring to say what every CNBC producer hates more than anything, the truth. Yet the market celebrates 7 more years of ceaseless asset bubble creation, debt monetization, and dollar destruction.

At least Hamptons real estate will be back to its bubble levels soon enough, as the US middle class completely disappears over the next 10 years.

The Chinese ascent over last decade has lowered the degree of separation between China and the global economy: what happens in China doesn’t stay in China (not anymore), it spills over to the rest of the world.

Billions were made and lost in half an hour.

Peter Orszag justifies an insane cumulative budget deficit by 2019 by underscoring "the dire fiscal situation that was inherited." And while the $9 trillion is likely a very gentle underestimation of what will happen if the Bernanke policies kick in and trillion is really quadrillion, it is a sad state of affairs when every administration going forward will simply blame the previous one for its unprecedented fiscal and monetary blunders. Oh and here is an item for future revisionists: by 2019, interest expense will account for more than 80% of the projected deficit of $917 billion. We are now officially a vassal state of China.

Consumers now taking their unemployment benefits (which are increasingly running out) and investing all the proceeds into FNM and C. Market rips, confidence goes even higher. Facts and $9 trillion upcoming budget deficit ignored.

"I want a comprehensive approach instead of a piecemeal approach"

• Bernanke to print dollars for seven more years, as Obama is set to announce a $2 trillion increase to budget deficit (FT)
• BofA denies misleading its investors on bonuses (WSJ), in other news its CRE loans are all fairly reserved at par
• Ball in Shanghai stock market roulette falls on red today (MarketWatch)
• Goldman's town hall (MarketWatch)
• Futures up presumably as massaged Case-Shiller data leaked; market attention span drops to sub-minute levels (Bloomberg)

• Asian stocks fell, Treasuries advanced on lower profit at Chinese cos, evidence of increasing loan losses in the U.S.
• Cash for clunkers filing time extended until noon ET Tuesday.
• China’s stocks fell for the first time in four days, led by commodities suppliers and banks.
• FDIC to ease entry for private-equity firms buying failed banks.
• Former Chair Volcker says money-market funds weaken U.S. Financial system.

A recent increase of 25bps by the Bank of Israel is a potentially bullish indicator.