I was away at Yosemite for a few days to clear out mind and soul. It was grand to walk in the "incomparable valley," and even moreso to take the road up to Glacier Point and look down on it all from over 8000 feet of elevation. A visit to Mariposa Grove, and standing beneath the awesome "Grizzly Giant" was a truly humbling experience.
One thing about the visit was that I saw very few "fellow Americans" at play. Almost everyone I saw was from Europe, Southeast Asia, India, China, and I heard at least four other languages spoken. Where were the US tourist crowds? My partner commented: "They are all home without jobs watching TV." And that leads me to something very silly I saw on the boob tube that weekend.
On the morning of the second day I caught a segment of MSNBC at the hotel, gleefully announcing the recession was "over." The assessment was based on the NABE sampling the majority opinions of 44 economists. Let me give you my own "Minority Report." It won't be based on silly technical definitions of what a recession is, but instead on plain old common sense. The recession is not over. It is simply transitioning to something more severe, a bona fide depression is now almost inevitable. I do not base this call on the assessment of 44 economists, most of which failed to see the first recessionary collapse coming a year ago when I and so many other bloggers were writing about it. Instead I base my call on the stubborn facts I laid out in my most recent article. The short version is that people without jobs and income do not spend money. If 70% of our economic GDP depends on consumer spending, good luck with your "end of the recession" call when we have actual unemployment (U-6) over 17%.
But hooray! The Dow hit 10,000 today! This means nothing. Think of the stock market as a bunch of rich folks all off on vacation at Las Vegas. It's just a place where "investors" gamble their money--a casino. And it is more heavily manipulated than any casino the mafia ever ran, believe me. The Dow is entirely disconnected from reality. When one of its major companies collapses, that company is quietly removed from the index so as not to spoil the fun. So while the NABE and these economists think happy times are here again, the Nattering Nabob thinks otherwise. Do they actually expect we will soon get back to the good old days of house flipping? Guess again. We are now beginning the process of defining a new "normal" in this country. It will be a place where the gulf between rich and poor has never been wider. Employment will take years to come anywhere close to where it was 18 months ago. The housing market has yet to bottom and house values will not suddenly begin skyrocketing back up to 2005 levels again. The housing market will bounce, but remain flat for many, many years. Even a dead cat will bounce if dropped from the third floor....But it won't ever catch mice again.
One thing about the visit was that I saw very few "fellow Americans" at play. Almost everyone I saw was from Europe, Southeast Asia, India, China, and I heard at least four other languages spoken. Where were the US tourist crowds? My partner commented: "They are all home without jobs watching TV." And that leads me to something very silly I saw on the boob tube that weekend.
On the morning of the second day I caught a segment of MSNBC at the hotel, gleefully announcing the recession was "over." The assessment was based on the NABE sampling the majority opinions of 44 economists. Let me give you my own "Minority Report." It won't be based on silly technical definitions of what a recession is, but instead on plain old common sense. The recession is not over. It is simply transitioning to something more severe, a bona fide depression is now almost inevitable. I do not base this call on the assessment of 44 economists, most of which failed to see the first recessionary collapse coming a year ago when I and so many other bloggers were writing about it. Instead I base my call on the stubborn facts I laid out in my most recent article. The short version is that people without jobs and income do not spend money. If 70% of our economic GDP depends on consumer spending, good luck with your "end of the recession" call when we have actual unemployment (U-6) over 17%.
But hooray! The Dow hit 10,000 today! This means nothing. Think of the stock market as a bunch of rich folks all off on vacation at Las Vegas. It's just a place where "investors" gamble their money--a casino. And it is more heavily manipulated than any casino the mafia ever ran, believe me. The Dow is entirely disconnected from reality. When one of its major companies collapses, that company is quietly removed from the index so as not to spoil the fun. So while the NABE and these economists think happy times are here again, the Nattering Nabob thinks otherwise. Do they actually expect we will soon get back to the good old days of house flipping? Guess again. We are now beginning the process of defining a new "normal" in this country. It will be a place where the gulf between rich and poor has never been wider. Employment will take years to come anywhere close to where it was 18 months ago. The housing market has yet to bottom and house values will not suddenly begin skyrocketing back up to 2005 levels again. The housing market will bounce, but remain flat for many, many years. Even a dead cat will bounce if dropped from the third floor....But it won't ever catch mice again.
Sigh... I miss the Grizzly Giant. There it stood, where it has lived since the time of Christ. A segment of its flanks were scorched black by fire, but it still remained the great lord of the forest. It's massive branches exceed the girth of any other tree species on earth, except Redwoods. A tree over 1800 years old understands that things change, and they sometimes take a while. This Recession-Depression is a time of great change in our history as a nation and, believe it or not, it is not ending. It's just beginning. We are now learning what it is like to live without easy credit and an ATM machine in our house. Millions are learning what it is like to live without a job. Soon we will learn again how fragile our energy model really is. These are hard lessons that the price of a share of Citigroup simply cannot cure.
The Nabob has spoken.
The Nabob has spoken.
