Friday Financial Briefing: Season Finale!

The last fifteen minutes or so of trading yesterday is a perfect illustration of why this market is so screwed up. The S&P 500 and Dow spent most of the day down, until all of a sudden and for no apparent reason, both indices shot up a half-percentage point to close nearly even. Dueling algos at rival hedge funds? Or the capricious interference of a fey and angry God? I don't know.

Remember what I was saying about all that bad debt that the Chinese are hiding? Yeah.

Illinois has a higher debt-default risk than Iceland, which is pretty surprising given that Illinois is a US state whereas Iceland is a sovereign nation with an even lousier growth-picture than the US in coming years.

This article on why implementing a Title IX-like mandate to get more women into STEM areas (Science, Technology, Engineering, Mathematics) is not only likely to fail, but actually cause positive harm. I do think that America should focus far more on giving all students a better grounding in STEM, but normalizing gender-discrimination seems like a bad way to go about it. This has economic implications because America's role as an innovator and entrepreneur-led economy is jeopardized when we cannot produce enough scientists and engineers.

Good news, everyone! We are $1 trillion in debt this fiscal year! Achtung! Hammerzeit! This is what passes for sage thinking at Newsweak these days -- and on most of the Democratic Left (but I repeat myself).

More evidence that no one really believes that 9.5% unemployment number. Again, I'm not sure that the unemployment-rate is a good metric for the overall health of the economy; however, high unemployment is highly correlated in people's minds with a bad economy, which influences their economic and political decision-making. The real rate is probably around 15-16%, and some of that job-loss may be structural (i.e., permanent) as industries streamline, automate, or move production overseas.

The WaPo is apparently trying to fill the humor-gap that SNL left behind when it stopped being funny a couple of decades ago. A little slice of pure comedy gold right here:

They could have at least said "thank you" first.

I'm talking about America's CEOs. As the new campaign ginned up by the Business Roundtable and the Wall Street Journal's editorial page would have you believe, President Obama is anti-business. His grasping government has cast a pall of uncertainty that's suffocating growth. Business leaders, who stood by patiently to give the man a chance, can no longer hold their tongues. As patriots, it's their duty to speak out.

Well. I'm not saying Obama has been perfect on the economy. Far from it.

But you'd think that if business had finally found its voice, its first words would include paeans of gratitude for the bold government action that kept us from going off a cliff.

The plight of Japan should stand as a cautionary tale to everyone who's pissing themselves about China right now. Back in the Reagan era, Japan was the Asian boogeyman. Now...they're a rapidly-aging basket-case of a nation with a huge debt and a shrinking population.

Obama the Divider: now the US Chamber of Commerce has declared vendetta, and sent Luca Brasi to sleep with the fishes.

The Fed: You'll take the stimulus, and you'll like it!

The Dread Lord of Evil, His Dark Majesty, has deigned to speak with you worthless turds yet again. Be quiet and pay heed, or an eternity of pain shall be yours!

You know things have taken a dark turn when even the best-case scenario is "You're completely boned!". (Do read the linked testimony; it's full of good stuff.)

Industrial production "stalled" according to Goldman analyst. (I don't really buy into the Goldman Sachs mystique, but Hatzius is a smart guy and worth listening to.) Oh, and the Baltic Dry Index (BDI)? Still dropping. This is beginning to look a whole lot like a decrease in industrial output to me, not a shipping or commodities artifact.

Who's yer friend? Who's yer buddy? Timmah is! Timmah's your buddy!

Burying Crisco cans full of McDonald's gift cards in your backyard doesn't really count as saving for retirement for two reasons: 1) the cards expire after six months; and 2) Lord Humongous will not honor McDonald's gift cards in our dystopian Wasteland future. He's a Burger King man.

So, as an individual investor who has decided to get out of this insane equities market until some semblance of sanity returns, when can I expect to dip my toe back into the water? Maybe a decade or so. Until then, all of my spare cash will continue to fund Monty's Halfway Home for Wayward Pole Dancers. I'm not in the business to get rich. I'm a giver.

Our excitement for the strong manufacturing sector performance might have been a tad premature. The second half is shaping up to be a real pig, in fact.

Halloween isn't the only scary thing coming up in October.

Remember back when a double-dip recession was actually the worst-case scenario? Just remember: there is no problem so severe that incompetence and stupidity cannot make it worse.

Bad Goldman! Bad! Do it again and Mommy spank! (Via curious in a thread last night.)

And finally, my way of bidding everyone a (temporary) adieu is to mix a lovely song with...DOOM!

posted by Monty at 07:09 AM

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