Somebody is still embarrassed about the whole Bear Sterns controversy. You gotta love these guys.
Anyway, here are the conflicting numbers today, first is the new Philly Fed index data that points to a possible double dip recession in the works:
The Philadelphia Federal Reserve Bank’s index of economic activity in the mid-Atlantic region plummeted to a negative 30.7 this month, down from a positive 3.2 in July and the lowest since a negative 30.8 reading in March 2009 -- in the depths of the last recession.Pushing against a downturn are the new CPI number:
NEW YORK (CNNMoney) -- Americans paid more for necessities like gas, food, clothing and shelter in July, as prices rose more than expected over the month.Hmmm, I think I hear crickets coming from Paul Krugman on this number.
The Consumer Price Index, the government's key inflation measure, rose 0.5% in July, led by a 4.7% increase in gas prices.
Zerohedge outlines what I have been talking about for a while now with this very apt blog title:
Hyperinflation Vs Hyperdeflation: Take Your Pick
The market is now at a very simple crossroads: bonds are pricing in the hyperdeflation that the resumption of the global depression brings in, while gold is pricing in the central planning policy response to that hyperdeflation, which is nothing but print, print, print. Anyone who feels like arbing the spread on the trade (which has a very unpleasant end in either case), should go ahead and do it now.While there seemed to be a flight to security in U.S. bonds today, gold's price went soaring to record highs. One explanation I can think of: the market is predicting a slowdown which will immediately spark QE3 and more ECB bond buying. Once again, time will tell what happens, but if deflation is already be priced in along with counter inflationary moves from the Fed, than it looks like slow inflation on the horizon.
As for stock market volatility, I love this quote from commenter jadecahesis over at Mish:
If you have kids, you probably know what "Guitar Hero" is. It's a videogame in which the player pretends he's a rock star by playing on a 5-button plastic guitar with no strings If you don't have kids, you know the game as the stock market.I just got done watching a segment on Fox News Special Report on how the black community is pushing for the Obama administration "to do something" (I still think the fundamental problem of our society is the public asking politicians "to do something" whenever there is a problem) about raging unemployment. Too bad the black community isn't composed entirely of veterans because it looks like vets are gonna get some of affirmative action love thrown their way with new regulations from the Labor Department, via Diana Furchtgott-Roth over at RealClearMarkets:
• Contractors would have to list job openings for veterans with an "appropriate employment service delivery system." This means that the Office of Federal Contract Compliance has to approve of the employment agencies where job vacancies are posted.There are two things to take from these new rules:
• Contractors would have to maintain annual records of referrals of all job candidates, referrals of veterans, and the ratio of veteran referrals to all referrals. This would be substantial paperwork burden. If employers did not get enough veteran referrals, they could get dropped as federal contractors.
• Employers would have to print notices of employee rights and contractor obligations in Braille and large print for workers who are visually impaired. If they are visually impaired, additional accommodations would have to be made.
• Contractors' affirmative action programs for veterans would have to be reviewed and updated annually, as well as mental and physical requirements for job descriptions.
• Contractors would have to engage in outreach and recruitment efforts in order to make sure that veterans hear about the openings and apply.
• Employers would have to conduct mandatory all-employee and management meetings to discuss their affirmative action policies and make sure everyone understands them. Currently, such notices must be posted on employee bulletin boards in full view, often in cafeterias or outside human resources offices.
- The Obama administration is truly clueless when it comes to removing burdensome regulations that require businesses to waste money on such things as "affirmative action workshops."
- A silver lining- perhaps the administration really is planning on bringing some of the troops home....please don't chuckle...I am trying to be optimistic.
Despite the dire economic numbers, there is always comic relief somewhere out there if you look for it. Check out this wonderful article from Zerohedge:
Monorail.... Monorail...Monorail...Is Coming To A Broke State Near You
Oh it gets way better:Gov. Jerry Brown said this afternoon that California's embattled high-speed rail project should move forward, despite growing criticism about the project's management and cost.While the nation is in a "period of massive retrenchment," Brown told The Fresno Bee's editorial board, "I would like to be part of the group that gets America to think big again."The Democratic governor has said little publicly about the project since it came under fire this year in Sacramento, with cost estimates rising and lawmakers questioning its oversight. The project, to connect San Francisco and Los Angeles, was once expected to cost about $43 billion, a figure the California High-Speed Rail Authority is expected to update this fall.
The rail project is one of two major infrastructure projects on Brown's agenda. He said today that he will have a plan for the other project - a peripheral canal or other way to move water through or around the Delta - within a year.Stupidity on the left coast, it never gets old.