While the dumb money is chasing the rally in stocks; the smart money is keeping a close eye on the economy. Bill Bonner has been hammering home this point in the Daily Reckoning. We’ve been doing the same here at Notes. (Consider it a friendly warning.)

Japan’s Cabinet Office said today (Wednesday) that economic output fell to its worst levels ever, tumbling an annualized 15.2% in the first quarter, as the worst recession in 60 years hammered exports and consumer demand.

Those elusive “green shoots” that economic optimists had been digging up lately were buried under disappointing data from the Commerce Department in Washington yesterday (Wednesday) when it was revealed that retail sales in the unexpectedly dropped in April.

BEIJING, The People’s Republic of China – At a time when the rest of the global auto sales are experiencing their biggest declines in decades – and are set to drop at least 8% globally – the burgeoning China auto market may grow by 10% or more this year.

Commercial real estate at risk of default has quadrupled, according to a recent article in the Financial Times. It was only a matter of time before the consumer spending implosion destroyed the unsustainable increase in storefronts across America.

Buenos Aires, Argentina “What’s that smell?”  We were on an airplane when Edward, 15, noticed an odor that seemed out of place. “Dad…you should have at least cleaned your boots!”

Bill is traveling for the rest of the week, but fear not – we will muddle through without him. A good bit of activity in the markets since yesterday.

Retail sales and inflation took a step backward in March, as dour consumer demand hurt the former and suppressed energy prices stalled the latter.

Retail sales and inflation took a step backward in March, as dour consumer demand hurt the former and suppressed energy prices stalled the latter.

Gold ticked higher in volatile trade on Thursday, underpinned by improving investment appetite and gains in other commodities such as oil and metals and despite the dollar rising against the euro.