In my larval, pre-blogging days, I always faced the back-to-school moment with abject dread.  It meant returning to a program of the most severe, mind-numbing regimentation in the ghastly New York City public schools after a summer of idyllic unreality in the New Hampshire woods, where I went to a Lord of the Flies type of summer camp.  And so here I am, many decades later, still uneasy as the final page of the August calendar flies away in a hot Santa Ana wind, and a great hellfire closes in on the far eastern reaches of Los Angeles, and the American money system falls into a peculiar limbo, and every fifth person is out of work, or going bankrupt, or glugging…

The stock market is up 51% from its March 9 lows. The leading economic indicators have turned sharply positive, showing gains for each of the last four months. Manufacturing is on the rebound. And banks are promising to pay record bonuses, as their earnings have rebounded.

The Economist magazine, in a column wryly titled “Pangloss Revisited”, notes that “The average deficit over the next decade in now expect to be 5.1% of GDP, compared with an average of 4% in the original budget”, and that even in the last year of the forecast, 2019, the budget deficit is supposed to be 5% of GDP! Wow!

Pretend, just for a moment, that you’re President Obama. You have big spending plans – national health insurance, two wars, and a trillion dollar bailout for your friends on Wall Street. Not to mention paying for the soaring costs of Social Security and Medicare.

Clowns to the left of us… Jokers to the right… The Simpleton’s Analysis: Consumers cut back. The economy sank.

It is amazing how many things have NOT happened.

Just reading the newspapers gives me a daily diet of economic gloom. For example, my pessimism for today (Aug. 26) started with the headline of my local newspaper this morning. The Pittsburgh Tribune Review delivered a banner message, “Record Red Forecast at $1.58 Trillion.” (I think they printed the newspaper before the word came out that Sen. Ted Kennedy died.)

Actually, we haven’t gotten to Bedford Springs yet. We’re still sitting in the airport lounge in Paris. Summer is over. It’s back to work…12 hours a day…just like we’ve worked for the past 39 years.

Currencies rally in early morning Tuesday. But see profit taking later in the day… Looking for yield? China expected to get back to 10% growth! And Now… Today’s Pfennig!

Even as investors get more and more bullish about the outlook for the U.S. economy, the economy’s underlying foundation continues to erode.