The Low Bar 1-29-09
As readers of Lowbar know, I've been prognosticating a major downturn in the economy for years now. And as events have unfolded since September even I have been shocked by just how bad it has gotten. No doubt as our leaders in Washington try to stop the hemorrhaging the markets will buck up and down. But I feel that this time it truly is different. I think that we've gone past the event horizon and are being sucked inevitably into the black hole of insolvency. As this happens confidence, sentiment and statistics will gives us the proverbial writing on the wall. However I find that the media is often reluctant to print this news. Maybe they realize they won't sell as many whatever it is they sell if they are too pessimistic. These stories glare out at me like headlights on a dark, lonely mountain road. So I will take it upon myself to start sharing these lights in the dark and I'll be adding some comments as to why I find them illuminating.So here goes....
Start with this article that gives a very compelling metaphor of the challenge that is facing our central bank. In it the author, Gary North, says that the ship (raft) of state is headed uncontrollably down a river and either it'll go down Deflation Falls, Inflation Falls or end up in the calm waters of Convention Creek. I personally think we're headed for the dreaded Deflation Falls and are in fact in them already. But time will tell.
Here's some other general indicators today about just how bad the economy is. Sales of new homes fell hard in December, a record was set for unemployment and Japan's production is at historic lows.
We also know that the "economic stimulus" is winding its way through the bowels of Congress and that soon they'll excrete a "package" that'll stink to high heaven. Today we read that some economists are saying this plus the "bad bank" bad idea will cost us $4 trillion. Yowza!
I also enjoyed reading the drumming that Putin and Chinese Chairman Wen gave us at the Davos conference. He calls us irresponsible (he's right). It's a good read.
More later...
posted by Howie Hardcore @ 1/29/2009 07:10:00 PM
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