03/09/10 Mumbai, India – If you don’t read the newspapers you run the risk of missing something. Of course, if you do read them, you run the risk of catching something.
Not much in the financial news worthy of comment this morning…
The Dow gained $13. Gold lost $13. Nothing much to say about it…
So we will comment on something beneath comment…something so low we have to dig down to find it…something so unworthy we hardly imagine we are mentioning it…something in the newspapers…
We’re talking, of course, about politics…
The love-fest with politics is heating up. The drugs have been passed around. Now, the clothes are coming off…
“France keeps steady course in economic upheaval,” says a headline at the International Herald Tribune. Steady course? You bet. It kept subsidizing, bailing out, protecting, coddling and otherwise meddling in its economy – just like it did before the crisis began. Had it not done so, the story continues, France might not have been the first major economy out of the worldwide recession.
On the other hand, the French never went deeply into debt… So maybe they just didn’t have so much exposure to the worldwide debt crisis in the first place.
Never mind. The papers don’t know what the problem is, but they’re convinced that government interference is the solution.
Over at The Financial Times, Clive Crook is breathing hard, too. He reckons that the “downturn called for a big stimulus,” and that the US stimulus effort headed off a worse recession. He then explains that the feds’ stimulus really didn’t stimulate at all, it merely offset a decline in spending at the state level. State tax revenues fell; states spent less. State tax revenues declined $87 billion in the last 12 months, the biggest drop on record. The feds made up for it by spending big.
Meanwhile, The New York Times tells us that the whole downturn is now behind us. The economy is “surprisingly normal,” it says.
The US economy is some 11 million jobs short of full employment. Nothing very normal about that. But February saw an unexpected upturn in consumer credit, reports the Times. And unemployment seems to have bottomed out, adds The Wall Street Journal.
Surprisingly normal?
Well, there’s a big difference from something that looks surprisingly, reassuringly normal…and something that is actually working normally.
Which is it?
The New York Times is right; it is an economy that looks surprisingly normal…
Zombies can look surprisingly normal too. If you clean them up.
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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The zombie economy is the new normal…
Yes, but what´s happen with the FSTE 100, isn´t it climb to a new levels, that is not a thing to worry?
The new normal is scary to me. When the Fed under Greenspan held rates low for an extended time it blew up the biggest bubble of all time. Ben has held rates lower and for longer. Yet no one sees the bubbles, I do.
The bubble Ben has blown up is the foundation of our entire remaining economy. Bad enough when our economy was sitting on shifting sands. When this bubble bursts no one will be able to withstand the speed and depth. Yeah we are no longer sinking, but do you really think floating on a bubble is better?