Public Archives

The US government says that food inflation is
up 4% over the past year. The Farm Bureau, which simply measures prices
and does not statistically manipulate prices via substitution or
hedonic adjustments, measured an 8% gain in just the last three months.

Our money system requires that ever larger
amounts of new credit be issued or else the banking system becomes
really unhappy. Consumers with credit cards is one form of credit,
mortgages another, but the a really, really huge piece of the credit
pie is the corporate debt markets. This article points out that a
massive shortfall in this arena has happened.

Are we in a recession, heading towards one, or
not? The stock market seems unconcerned with the Dow rising 3.2%,
S&P up 4.2%, and the Nasdaq 4.9%. This collection of news items
will help you sort this out.

On the one hand, the stock market continues
to climb against all odds….on the other hand, record numbers of
Americans are bankrupt, in foreclosure, receiving food stamps, or all
three.

The Fed cut rates yesterday, although not as
much as ‘expected’ (read: ‘hoped’) by the ever hopeful stock selling
industry. Nonetheless stocks rocketed higher by a huge amount. Did this
make sense? Not if these data mean anything.

Horrified traders soon grasped the reality: the Fed had been forced to
throw out four decades of monetary history in order to support Bear
Stearns. Its justification was not that Bear was too big but that it
was too "interconnected" to be allowed to fail with the markets in such
as fragile state.This is a fascinating tale of just how
serious the Bear Stearns event was and the political and financial
machinery that was brought to the table to sculpt a solution.

The share price of MF global has fallen off a cliff. If you have money there, get it out. Now.

To many in the credit markets, the stock market
looks a lot like Wile E. Coyote. It’s already way past the edge of the
cliff. Equity investors just haven’t realized it.