Welcome to Zombieland…where the most amazing things happen…Starring Ben Bernanke, Tim Geithner and a cast of millions…
The new movie – Zombieland – about a group of survivors in a world of zombies, was the biggest grossing film in America and Canada over the weekend. It must reflect the zeitgeist of the North American public…a deep feeling that we are living in a decaying world.
Retirement is part of the American dream. Unfortunately, the nation’s financial meltdown is making the act tougher than ever. Social Security alone won’t pay the bills.
Personal spending soared 1.3% in August, the biggest monthly leap since 2001, the Commerce Department announced today. Of course, this $129 billion jump in consumption “shows strength in August, indicating some economic improvement,” as CNN writes. A quick look at the chart reveals that the once sober American consumer is starting to fall off the wagon yet again.
We don’t have to go back very far to see the classic boom, bubble, and bust play out. In just the last 15 years, we’ve been fortunate enough to watch over-zealous traders lose their heads again and again. First, they bought tech companies for 80 times their earnings in the late ’90s and then happily purchased banks and insurance companies that were leveraged at 35 times their equity. This time, however, we don’t even need the boom or the bubble to see a bust.
The longer the rally persists, the more dangerous it becomes.
The American economy contracted only 0.7% in the second quarter, the government finalized today. That’s down from its previous projection of 1% and practically seals the deal for a positive GDP number when Uncle Sam gives his initial third-quarter guess in late October.
Not much happened yesterday. The Dow fell 47 points. The newspapers attributed the reversal to surprisingly low consumer confidence numbers. Apparently, consumers aren’t so sure this crisis is over. As we reported yesterday, they’re saving money… maybe even at an 8% rate.
In my father’s house are many mansions. Surely one of them has a room with no elephants in it….
Not to crunch too many metaphors right here at the top, but a consensus seems to be firming up in the animate jello of the Internet that we have entered the Season of the Witch. An odor of ripeness fills the virtual air — something between dead carp and apples baking.
The rally may end any day, but it didn’t end yesterday. Stocks rose 127 points, as measured by the Dow. Oil closed at $66. Gold rose $2.50.
A bias to buy dollars remains…Looks like coordinated jawboning…Fujii now talks about intervening! Gold remains below $1,000…And Now… Today’s Pfennig!
