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Friday Financial Briefing

Back when many of us were young 'uns, we made a few sheckels by delivering Grit to the farms and trailer parks in our little podunk burgs. (Some later carried on the tradition more literally by becoming gravel-haulers.) In any event, Grit carries the story of a brave young couple who are starting a raw-milk dairy...in Connecticut. Free enterprise, even in the beating heart of Blue America!

Occasionally, Dame Fortune smiles on the worthy even in these debased times. Consider the Mamaroneck grandmother who won $1 million in the New York Lottery. After taxes, fees, assessments, penalties, and surcharges, the grandmother in question will take home a princely sum of $11.25 to spend on whatever she pleases. Sometimes good things do happen to good people!

But alas! The grim financial news overwhelms the few bright flashes of optimism! It rolls in as a blood-red tide!

Another down day in equities yesterday: the S&P 500 closed down more than three points at 1,027.37, and the Dow closed down more than 40 points at 9,732.53. Both indexes clawed their way back from a dizzying drop earlier in the day.

Cock-eyed optimist or hopeless idiot? You decide!

The old girl doesn't run as well as she used to, but she's been a reliable vehicle for a long time. The problems are mounting up, though, and she's nickel-and-diming me to death! Fix her or scrap her? Hrm.

Today's jobs number is looking to be very ugly indeed. Not exactly a shock to anyone who's been paying attention, but it should deflate some of the Obama Administration "recovery summer" rhetoric just a tad. (With bonus Jimmy Durante clip!)

Well, at least the guys at Moody's can read a map. That's something.

When you misdiagnose the causes to the wrong problem and then come up with a stupid solution which you implement badly...well, all I can say is that failure is more than an option. A particularly galling part of FinReg is the Bureau of Consumer Financial Protection, overseen by the Fed. Let us remember that the Fed is not under Congressional oversight -- that vaunted "independence" thing -- except at the most abstract level. There is much opportunity for mischief here, especially given the Fed's lousy track record. Another glaring omission from the bill is any proposal to handle the Fannie and Freddie mess -- so much for "comprehensive reform". When your "solution" involves creating entirely new problems while ignoring the biggest existing problem, calling the bill a "fiasco" seems almost too kind. But then, as the Fed has pointed out, I am only an idiot blogger and cannot be expected to understand such things.

John Tamny: "The Krugman is The Stupid. Plus, he's short and kind of smells like the inside of a soup can." Pull quote:

To put it very simply, government spending is a huge tax on true economic productivity, so contrary to Krugman's deeply held views, global economic revival will be at least partially authored by the spending cuts he decries, not the increases that he endorses. If government austerity were an economy killer as Krugman supposes, West Germany would never have recovered from World War II, and Japan wouldn't have either.

We're the least worst! Yay! (Warning: PDF file) More China bearishness:

As for the situation overseas, a recent International Monetary Fund study concluded that for the Chinese economy over the next decade to achieve 8 percent GDP growth—the minimum necessary to maintain political and social stability—China would need to double its share of global trade. Good luck with that. On May 20, the Chinese Chamber of Commerce announced that this year’s 14.5 percent depreciation of the euro against the renminbi is causing “huge losses” for Chinese exporters. Europe is China’s biggest customer. In 2009, even prior to the recent euro weakening, China’s exports to Europe were down by 27 percent. If the euro weakens further, Washington can forget about any Chinese currency appreciation against the dollar. Translation: global trade tensions are certain to rise.

Hear and heed, bretheren: China will not save you.

"A gigantic Ponzi scheme, lies and fraud." Also perfidy, ineptitude, stupidity, venality, corruption, and hubris.

Okay, I want to hear everyone in the auditorium this time, okay? Even all of you folks there in back! I want it loud, and I want it proud! Ready? And...UNEXPECTEDLY!!! Truly, it was a flabbergasting, never-to-be-repeated freakish turn of events that absolutely no one could have anticipated. A lighting bolt out of a clear blue sky, as it were. The asymptote just raced off to infinity, leaving only gobsmacked surprise in its wake.

I knew Ben been ridin' dirty with that crew from over on Constitution avenue, but dude, this shit just ain't right. You don't do your homeboys this way!

This is a metaphor for how low our airline industry has fallen. Are cheap fares really worth this? Folks, I'll go on record right now and say: just charge me an extra ten bucks and clean the God Damn planes.

Via Insty, Ireland and Greece as exemplars of the "austerity or stimulus" argument. (Austerity is coming our way whether we like it or not, by the way; the only real question is whether we will choose it or have it thrust upon us.)

His Dark Majesty and Supreme Lord of Abyssal Evil would like to share a few thoughts with you lowly turds. It's not often that he deigns to leave his throne in Hell, so shut your cake-holes and pay heed!

In past times, insane people were confined to asylums and institutions, there to live out their lives in grey misery, hidden from the eyes of the world -- unloved, unmourned, unremembered. Now? Now they get blogging gigs at the Wall Street Journal. And people say that we are not civilized....

Thank you, sir! May I have another?

The best part of this column is in the comments section. Pull quote:

Shame on you for spreading fear. It's almost as though you want this to happen. AS a republican mouthpiece, you shall reap what you sow. Shame, shame, shame.

SHAME!!

It's not like we didn't already know that Nancy Pelosi was an idiot, but this sets the bar to a new high. This is the kind of stupidity that would take large teams of really stupid monkeys working triple-shifts to match. (With bonus Nancy Pelosi "I pooped and touched my butt and now I have poop on my hand!" pic.)

Gold lost a bunch of ground yesterday. Buying opportunity or precursor to imminent price-collapse? $2000/oz, I tell you! I have seen the signs! The stars have aligned in the preordained configurations, and Ron Paul's voice has boomed from the heavens: Buyest thou gold, and hoardest thereof! And I obey! (Silver really took it in the nads too.)

The roots of California's boned-ness. Pull quote:

What he did not foresee, said Stirling, is that the financial health of the pension funds resulting from Proposition 21 would be used to approve “unsustainable” increases in pension benefits.

“You learn a lesson,” he said, “and the lesson is there is nobody enforcing the prudent man rule.”

California bid bade farewell to "prudence" long, long ago. [Update: Herr Morgenholz advises me that the correct past-tense form is "bade", not "bid". I knew that; this was simply a test of the Moron Pedant Early Warning system. If his had been a real emergency, you would have been given specific information on the situation. Thank you, and we now return you to your normal program.]

One of those hoity-toity "experts" that the Fed prefers to dumb-ass bloggers like me sends along a nice little PSA to brighten your day.

Accused Russian spy: Mother Russia can fuck right off, man. I'm doing my best over here and all they can do is criticize. It's hard to do top-flight espionage work when you have to work some shit job at the local Wally's Tax Returns and Radiator Repair, you know? Here's a piece of top-secret financial information, tovarisch: Americans are fucking broke. Just like everyone else. There, happy? Now please bail me the fuck out! Riker's Island sucks! (Ms. Chapman is free to come to my house, where I shall teach her the various mysteries of her own body. She will renounce the Rodina and live in my thrall.)

Today's Briefing brought to you by Greta Garbo in Ninotchka.¹ Ninotchka was both hotter and smarter than "Mrs. Murphy". And Melvyn Douglas nailed her just by being that damned suave. I mourn for the world that is lost. We truly live in the Age of Stupid.

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¹It does bear remembering that Ninotchka was released just prior to World War II, and tends to treat Stalinist Russia as a rather comic place, full of bloviating but harmless buffoons. In reality, Stalin was busy slaughtering millions of his own countrymen in the Holodomor and the Red Army purges, and packing off more millions to the Gulags. I love the movie, but it does give me kind of a creepy vibe sometimes.