Dreams of Shiny New Economies Didn't Dance in Their Heads
I share Rob's admiration for Seth Godin, but his recession forever post may have helped signal one of those weird days on the market that keep you wondering. Good economic data made the market go up for, oh, about 8 minutes. Then it turned around and headed south. Bank of America couldn't keep its website online. Morgan Stanley couldn't shake the market's fear that they've exposed themselves too much to Europe. American Airlines got hit with a bankruptcy rumor and lost a third of its value. And Europe? Well, when Larry Kudlow tweets this...
If Europe/Troika doesn't ring fence/guarantee all bank debt and deposits and debt, then holy hell will break out.
...you'd better listen. He doesn't panic much.
I mean, a burning chemical plant in Dallas gets barely any notice, even after it causes an elementary school to evacuate. How bad are things when "kids fleeing toxic chemicals" stories can't even make it on Memeorandum?
This bad: Greece said over the weekend they couldn't hit their deficit targets (to the surprise of absolutely no one.) The EU is not currently following Larry's advice, instead delaying a decision on the Greek bailout until November. You can't blame them -- they can't even go inspect the books of the Greek government because government workers are holding sit-ins around the country to prevent them. A Belgian bank, Dexia, is about to croak under the weight of the impending Greek default. That might, might make them move faster, but it appears not. All the countries that had to vote on the bailout last week did so, but Slovakia isn't until the 17th, so it appears the Europeans will tarry a while longer trying to get private investors to eat a bigger chunk of the loss rather than pass them on to taxpayers. Good luck with that.
Elsewhere, Asian stocks opened much lower and the Chinese are currently angered over the Senate's moving on the currency bill. I wonder how Seth (or Rob) fit a trade war into their view?
It's getting harder and harder to hold the view that a second recession isn't an even-money proposition. Too many things happening outside the US for us to just slide by. And if all the above won't sober you, perhaps this number will:
That was the closing U.S. federal debt on Sept. 30. Have a nice night.