Amidst all of the Fuzzy Numbers offered up, there are two that I trust implicitly because they cannot be gamed, massaged, seasonally adjusted, imputed, or hedonically inflated.

They are taxes and gaming revenues.

Today there were a couple of mind-blowing numbers. Think about these next two articles as if you were a government budget official trying to make plans or a social scientist attempting to assess the current social mood.

Separating truth from fiction, especially when listening to politicians and Fed officials talking about the positive aspects they see in our economy, is never easy.

However, separating words from actions is as easy as pie.

Today, something so unusual happened in the world of bonds that I have to tell you about it. (All quotes below from this one article).

I am often asked what signs I use to measure where we are in the crisis and whether it will get worse or better.

This next article posits the emergence of a new type of bond sold by the US that is not denominated in US dollars. This would be the equivalent of a road sign reading, “No bridge, 10 feet.”

Here’s the idea:

Some people think of Hank Paulson as our Treasury Secretary.  I think of him as a 19 year veteran of Wall Street banking.

At every turn of this entire bailout he has specifically advantaged banks over taxpayers, banks over industry, banks over homeowners, and banks over the future health and prosperity of this country.

Is this surprising for a banking veteran?  No, not really.

Bernanke’s remarks today did little to soothe this ruffled observer.  His remarks struck me as practically dishonest in their inability to speak directly to our actual problems. 

US stocks gain, economic data falls.

Over the past four days, US stocks gained the most (percentage wise) since 1933. On the surface this is significant, because 1933 marked a significant turning point for stocks even though the economic crisis had a ways to go yet.

But is that a valid linkage to make?

Now, the stock market is sometimes called “the great discounting machine” for its supposed ability to sniff out great changes in trend well before those changes are obvious elsewhere. In times past, stocks have made a habit of rising months in advance of job gains, economic activity, profit gains, and other such economic data.

However, I will note that the stock market has gotten a bit off the rails lately and it completely missed the warning signs of an impending credit crunch that were given off more than a year ago. The stock market carried on and made new highs even as the financial underpinnings of our entire system were collapsing into the bay. So in some circles (mine included), “the great discounting machine” has lost some of its utility and impartiality along the way.

Today the economic news was horrible.

When the Big Three automakers were finally settled in their chairs before the Congressional committee investigating whether they deserved a handout of $50 billion, they were asked a defining question; “How many of you flew commercial airlines to get here?”

No hands went up and they were sunk. Somehow the hubris of trotting about on private jets while asking for public money was simply too much for a suddenly stingy Congress.

No such questions were asked of the Citi bankers, in fact no hearings were even held, and they were given access to over $306 billion on the most favorable terms you could possibly imagine. This illustrates the power that the banking industry holds over our political process and it is a ruinous power. Why should Citi receive not only special treatment, but exorbitantly preferential treatment at taxpayer expense? I don’t know, but I’d like some answers.

First, check out the terms of the deal:

This title is not mine, but that of an article that appeared in The Wall Street Journal today (Nov 24), which closely mirrors my own assessment of where we are and what is likely coming next. In short, deflation is so unacceptable to a debt-based money system that it will be avoided at all costs. And I do mean all costs.

This was written by an equity strategist in Hong Kong; be sure to catch his startling conclusion at the end. Startling because of where it was printed – in the main circular of the high church of fiat money, a.k.a. the WSJ.

The whole thing is worth a read, and a ponder, but let’s review some of the more relevant bits.