Stocks Chug Higher, Impervious to Bad News

The stock market shrugged off appalling jobs data on Friday to close higher, much as we might have expected.  Although Beadledoms best and brightest had been looking for unemployment to remain unchanged at 9.6% for November, it actually jumped to 9.8%, at least according to the official tally. (Shadowstats’ John Williams has offered convincing evidence that the true unemployment number is above 20%.)  It was also announced that employers created just 39,000 jobs in November, down sharply from the previous month. Stocks initially fell on the news, but bears were easily repelled by the so-far invincible OPM/QE2 juggernaut in the opening minutes of the session. At their most fearful, sellers managed to push the Dow down only 43 points. The broad averages oscillated tediously for the next six hours, presumably until there was not a single seller left; then, they lurched higher to finish with the best rally of the session, achieving all of the day’s gains in the final fifteen minutes of the trading week.

An eruption of the Yellowstone caldera could end life on Earth, but would it slow down buyers on Wall Street for even an hour?

Over the weekend, pundits would reflexively focus on the stock market’s amazing resilience in the face of such awful news. No doubt similar behavior was evinced in the staterooms and parlors of the Titanic when it was first learned that the ship had struck an iceberg. Statistically-minded bulls may want to make note of the fact that the Dow would hit 35000 sometime around August 2014 if it continues to rise at Friday’s pace.

More immediately, as we implied here in an earlier commentary, stocks are almost certain to continue higher for the remainder of the year. Short-covering opportunities are becoming increasingly scarce and may have dried up altogether on Friday with the revelation that horrific unemployment data alone will not suffice to diminish the flow of OPM into shares.

What If…?

If there was any chance of a respite for bears, it was thought to lie in the fate of Bush-era tax breaks. Some pundits said that if the abatements were not extended beyond December 31, when they are due to expire, the stock market would crash. To be sure, if an extension is not enacted, that would effectivelyh usher in the biggest tax hike in U.S. history – just the thing to power us out of the Great Recession.  However, much as we’d like to believe that such fears might impel Congress to extend the breaks, including for the ostensible “rich” with incomes exceeding $250,000, we doubt that anything short of a global nuclear conflagration or an eruption of the Yellowstone caldera will discourage institutional buying of U.S. stocks. Although we don’t foresee much of a rally into year’s end, the likelihood that the Dow, which finished the week at 11382, will end the year above 11000 seems almost beyond conjecture. We expect the blue chip average to trade as high as 11600 in the meantime, but to finish somewhere in the range 11250-11350. If so, it would represent a gain for the year of a little more than eight percent.  Not bad, considering the economy remains hopelessly mired in the worst recession since the 1930.

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  • Rick Ackerman December 6, 2010, 8:03 pm

    From one Yoram Ettinger, some interesting and perhaps timely notes on Chanukah, the Jewish Festival of Lights:

    1. George Washington first learned of Chanukkah while at Valley Forge,
    Pennsylvania, 1778: “Perhaps we are not as lost as our enemies would have us
    believe. I rejoice in the Maccabees’ success, though it is long past…It
    pleases me to think that miracles still happen.”

    2. “In God We Trust” was inspired, also, by the Maccabees’ battle cry,
    which adopted Moses’ battle cry against the builders of the Golden Calf. A
    literal translation of Moses’ battle cry is “Whoever trusts G-D; join me!”

    3. The Maccabees’ sacrifice and political-incorrectness inspired Patrick
    Henry’s “Give me liberty or give me death” and New Hampshire’s “Live Free or
    Die.” The Mac cabees followed in the footsteps of Abraham, Phineas the High
    Priest, Joshua & Calev, King David and Elijah the Prophet, who walked
    against the grain, in defiance of the establishment and conventional wisdom.

    4. Inspiration to Benjamin Franklin’s “Rebellion against Tyrants is
    obedience to God.” The Maccabees were a tiny minority of “rebels” –
    condemned by the “loyalists/pragmatists” – rising against an oppressive
    super-power. They were condemned, by the Jewish establishment, as “enemies
    of peace” and “extremists.” They prevailed due to their principle-driven,
    determined and can-do state-of-mind and adherence to roots and long-term
    vision against any odds. They demonstrated the victory of the few over the
    many, right over wrong, moral over immoral, truth over lies, faith over
    cynicism and opportunism. The Maccabees became a role-model for the US’
    Founding Fathers, including Paul Revere ( who was referred to as a “modern
    day Maccabee”) and the organizers of the Boston Tea Party. They realized
    that no free lunches were available for freedom-seeking nations.

    • Benjamin December 7, 2010, 12:50 am

      Rick,

      I’m kind of wondering what this has to do with what ricecake wrote (if it was meant to be a reply to his post). Or the commentary in general, for that matter. Not that I’m calling you out for being O/T, on your own forum at that, but I must ask…

      What inspired you to share these interesting little bits of history with us today?

      And thanks for doing so, by the way!

    • Cameroni December 7, 2010, 7:44 am

      Great stuff Rick, and a nice refreshing change of pace. An speaking of the little guys who stood against an empire and unforgiving army, Masada is a testament to courage in a very dark hour. I have climbed it three times now (not likely again though, I smoke waaaay too much for that). Being on top though and reflecting on the history all round and the struggles of the past is refreshing on so many levels. And it just makes you want to kick some dictatorial manipulative corrupt butt. On principle alone.

    • ricecake December 7, 2010, 9:06 am

      Mr. Rick,

      I’m just an observer, just describe how I feel about Wall Street. . I’m not playing the stock market because the more I learn, the less I know, the more confused I become. Every where I look where money investments are concerned, I feel the big greedy sharks stare at me with an open mouth full of sharp teeth. I’m very scared. But then Ben Bernan is pushing people go into the stock market to gamble with more QE attacks. Still I’m standing on the side watching. May be my hard working saving will shrinking fast by Ben’s QE, but at least I won’t be the shrimpy for the Wall Street Sharks.

  • ricecake December 6, 2010, 6:53 pm

    By second thought, “plug protection” may also work for someone like Ben always try to plug the black leaking hole of the titanic.

  • ricecake December 6, 2010, 6:50 pm

    OOOOOOOps, I mean “plunge protection” team, not “plug”

    lol

  • ricecake December 6, 2010, 6:48 pm

    Buy Stocks, Guy! No one will lose. Market has no fear anymore because beside the plug protection team, now we have the mother of all plug protection team: THE QE team.

    Bad News or Good News, some people will always lose or make money over any news. So the market is always going up as long as some people make money. Like the they say on the Wall Street, the main streets are losing out people have no jobs, so what? The corporations are soaking with cash piling up their profit by the day. If they can’t make money inside the US, they are making the kills overseas now. Aren’t you Gold and Silver, commodities people are all making the kills getting rich like you have never before?

    Boom you make money. Gloom you make money. Doom you make money. Money ball is rolling from one side to the other. One man’s lose is another man’s gain. The meaning of life is – to live you life as full as possible to party as hard as you can before the end.

    The life of making money is either chase after the money ball, or anticipate and wait at the other end for the ball which come to your direction.

  • David December 6, 2010, 6:40 pm

    This is probably way off topic, but maybe not–as the market “chugs” higher, so do my PM stocks. After ten years of this game, I’m getting really, really tired of my PM shares just being a leveraged play on the Dow. Anyone else out there feel the same?

  • warren December 6, 2010, 5:27 pm

    I get it Ben, which may surprise some. However, the beings that should allow it would need to be sane. They are not!

    • Benjamin December 7, 2010, 12:56 am

      Well warren, I didn’t say everything. Gold and silver and perhaps another thing are primary colors, but…

      There is absolutely _no way_ they could refuse a certain offer to release them, unless they are incredibly malicious or insane. I’d bet that, while TPTB are… highly motivated… they’re neither so evil nor out of it as to refuse that offer.

  • mario cavolo December 6, 2010, 12:55 pm

    nice Benjamin, really really nice…M

    • Benjamin December 7, 2010, 12:57 am

      Thanks Mario. I think…! 🙂

  • mario cavolo December 6, 2010, 6:58 am

    A funny thing happened on the way to becoming richer than ever…other people got screwed, but so what?

    I keep trying to remind the intelligent and pragmatic bear in all of us, including myself, that things are not so bad. Applying the unemployment problem as a broad stroked negative indicator is not appropriate; the way of the world and the U.S. has experienced dramatic socioeconomic shifts, and so that particular group of unemployed people are in the wrong circumstance, the wrong industry, the wrong sector of the economy of the wrong country at a particular juncture in history. Malcolm Gladwell stated the point well in his book “Outliers”.

    It is not true that the “U.S.” is in trouble; rather this idea must be categorized.

    Yes it is true that 100 million Americans are in bad shape, but not the other 150 million. So then?

    Yes it is simply true that we have today’s freshly twisted version of the old, continued, historically proven trend of currencies buying less and prices going up. Yes it is because there is too much debt and governments need to print money. My money will buy less and less, no surprises there either.

    Yes it is true the economic indicators are not disastrous; some are quite good while some are worrisome. People are out spending this holiday season, corporate numbers are decent; no massive red flags there either.

    It is not true that the 100 million upper middle class and rich people of America are in trouble. Indeed, they are not in trouble at all. They are out spending and enjoying their lives, MORE so than ever! Facts are facts.

    Socioeconomically speaking, the Grand Canyon divide between the haves and have-nots talked about during the past ten plus years is essentially complete.

    Moving forward, the situation of the 100 million or so U.S. have-nots will not move forward; it will continue to deteriorate from here. Gradually over time, this sector of society will reform and transform, I suspect with more of a mercantilist mentality which is still found here in Asia/China. For them we have no easy answers nor solutions on the horizon. It should be genuinely disconcerting and upsetting to any mindful person no matter how close or distant to it we may be.

    For the rest of the world, the comfortable and rich, party on. Asia is rising led by China and that is something to encourage and be thankful for, though we should fear that Chinese leadership’s arrogance will take a wrong turn rather than a cooperative turn to become more of a global team player.

    Yesterday, my wife and I were at Shanghai’s massive wholesale clothing area at QiPu Lu…one square kilometer of densely packed clothing/shoe/bag shops…we picked up her perfect UGGS boots for $19, my new formal black suede tuxedo shoes for $35. Was it busy? No, it was rather busy beyond belief; a typical, daily, relentless shoulder to shoulder swarm of lower to middle class Chinese citizens mostly clueless about the the world beyond their own, moving through every crammed aisle an across every side-walk and intersection; street vendor carts frying and tossing freshly made fast food noodles, veggies, egg crepes for customers lined up for a $1 meal, routinely ignoring the ghastly hygiene levels, and yet we never seem to get sick.

    The U.S. it seems had in fact transformed itself into an unsustainable economic and societal model centered around a spoiled rotten middle class that certainly does not deserve what is happening to them in this decade; all people’s within a culture are brainwashed by their culture, they are not fully accountable for coming to actually believe they need 3 TV sets and to charge every purchase as part of normal happiness. Government and big business are to blame for creating that environment and shaping their behaviors. The unfortunate shall now by necessity somehow be cast aside (already have been) and managed; an undertaking of complexity and breadth difficult for most to fathom.

    Cheers, Mario

    • Benjamin December 6, 2010, 9:25 am

      This is probably going to seem so off-topic that you’ll be wondering what the mother-heck I’m talking about. But if you’ll juuust bear with me…

      I’m working on a special project now, one which involves the use of paint and mixing color. Did you know that a bloodshot eye is best made using brown and yellow tones than, say, white and pink?

      For years, I didn’t know either. And I certainly never would’ve thought that yellow makes a better pink! I would’ve just slapped down some white, probably dry-brushed over black or grey and then washed in a thin mix of white and red. But I suddenly got tired of the same old, so when deciding which colors to buy for this project…

      I got out the ol’ paint program on the computer and went to town mixing colors. In the end, I didn’t go with the various blood, flesh, and white shades when considering the eyes. Or any part of the model, for that matter. No, I just bought red, green, blue, black, and white, in big eight ounce bottles. This, naturally, saved me a ton of money and I’ll probably have more colors for more years than I ever would’ve out of 100+ color set costing $200 or so. BUT…

      All I have to do to screw up everything is to keep on mixing primaries and shades, and eventually I’ll be in the corner of the spectrum that says mixes of blacks and whites is all I’m ever gonna have. Not that things couldn’t get brighter from darker. I just wouldn’t have blue, green, or red. That is what is happening today, Mr. C. The colors are waxing and waning between black and white, mixing together at times to be glumy grey.

      But there’s an even deeper point to make here. I spent less to have not a palette of colors that were better or worse than the more expensive set. They’re both the same thing, except in price. Both can bring out the entire spectrum of colors, as well as tank into the greys. So, given that (lol!), how does one television per trillion people matter from three televisions per square inch per person, per household?

      I know, I know… All of this must sound very senseless and confusing but what I mean to say is that we need not more black and white, but something more primary, something that can’t be had from mixing, but just is. Only then can people have their various colors and shades, as they like them. I might not have use for, say, burnt candy apple green, but what I call “conjunctivitis red” is not something I could do without. If someone figures three TV purple is what they need… Well, live and let live, I say. NOT die and aggreessively yet ineffectually manage them by the growing millions.

      So that’s that. Have a nice day! 🙂

    • redwilldanaher December 6, 2010, 5:21 pm

      A funny thing happened on the way to becoming richer than ever…other people got screwed, but so what?
      TOUGH QUESTION TO ANSWER SUCCINCTLY WITH HISTORY BEING HISTORY AND WHATNOT. I’D SAY RELATIVITY MIGHT MATTER HERE. HOW WILL YOU FEEL WHEN THE NEXT “MOB” TAKES YOUR DUBIOUSLY ACQUIRED WEALTH FROM YOU WITH LITTLE NOTICE?
      I keep trying to remind the intelligent and pragmatic bear in all of us, including myself, that things are not so bad. Applying the unemployment problem as a broad stroked negative indicator is not appropriate; the way of the world and the U.S. has experienced dramatic socioeconomic shifts, and so that particular group of unemployed people are in the wrong circumstance, the wrong industry, the wrong sector of the economy of the wrong country at a particular juncture in history. Malcolm Gladwell stated the point well in his book “Outliers”.
      I TAKE EXCEPTION WITH THIS. IT’S NOT AS IF THESE “CIRCUMSATNCE” PEOPLE FELL INTO THIS CATEGORY BY CHANCE. THEIR GOVERNMENT AND THEIR BUSINESS LEADERS ET AL. LIED TO THEM AND BACK-DOORED MOST OF THEM THERE. IT’S NOT AS IF THEY NO LONGER HAD THE SKILLS TO DO SAID JOB, RATHER THE JOBS WERE TAKEN AWAY FROM THEM BY THEIR ELECTED “REPRESENTATIVES” FOR THE MOST PART.
      AS RICK NOTES, 20% REAL RATE IS PROBLEMATIC AND I’D SUGGEST YOU TRY TELLING THAT TO THE FOLKS THAT ARE NOT EMPLOYED. THE WORST PART IS THAT THERE IS LITTLE CHANCE ANYTHING RESEMBLING THE JOB THEY ONCE HELD IS COMING BACK. EVER.
      It is not true that the “U.S.” is in trouble; rather this idea must be categorized.
      Yes it is true that 100 million Americans are in bad shape, but not the other 150 million. So then?
      Yes it is simply true that we have today’s freshly twisted version of the old, continued, historically proven trend of currencies buying less and prices going up. Yes it is because there is too much debt and governments need to print money. My money will buy less and less, no surprises there either.
      Yes it is true the economic indicators are not disastrous; some are quite good while some are worrisome. People are out spending this holiday season, corporate numbers are decent; no massive red flags there either.
      AND IT’S ALL BASED ON ILLUSION. ARE YOU COMFORTABLE WITH THAT? IS THAT WHAT YOU WANT TO BASE YOUR LIFE DECISIONS ON? I CAN MAKE MYSELF LOOK LIKE A PRINCE FOR A FEW DAYS TO FOOL SOMEONE. SO THAT MAKES THINGS ALL -GOOD? SNAPSHOT IN TIME. IF YOU’RE SERIOUS YOU SEEM TO BE ARGUING THAT INTENTIONALLY SABOTAGING THE US ECONOMY AND MANAGING THINGS AS RECKLESSLY, WRONGHEADEDLY AND IN THE MOST SHORT-SIGHTED OF WAYS ACTUALLY HAS LITTLE DOWNSIDE IF YOU SIMPLY CONSENT TO BUY INTO THE ILLUSION SHOW.
      SNAPSHOT IN TIME. MONETARY LIGHTER FLUID. FALSIFIED STATISTICS. COLLUSION. WINK, WINK. PSYOPS. PROPAGANDA. TIME TO THROW AWAY THE WEALTH OF NATIONS? DO YOU HAVE A GOOD BOOK FOR ME MARIO? ONE THAT CAN EXPLAIN WHY THIS APPROACH IS BETTER?
      It is not true that the 100 million upper middle class and rich people of America are in trouble. Indeed, they are not in trouble at all. They are out spending and enjoying their lives, MORE so than ever! Facts are facts.
      YES AND WHERE DID THE WEALTH EXPLOSION SPRING FROM? 20+ YEARS OF THE MOST RECKLESS MONETARY POLICY IN THE HISTORY OF THE WORLD. THE DISGRACE AND RUINATION OF OUR ACCOUNTING COMPANIES, ORGANIZATIONS AND RATINGS AGENCIES. THE LOCKDOWN AND SPRIRALING TRAGICOMEDY OF OUR MEDIA. McMansions ARE NOW THE WORST HOLDING IN REAL ESTATE THAT ONE CAN POSSESS. I’D SAY THAT ALL THOSE “FREE” OF WHAT WAS THEIR MORTGAGE ARE HELPING THINGS OUT TREMENDOUSLY, AS ARE THE SAME STORE COMPS DUE TO THE FACT THAT SO MANY OTHER RETAILERS HAVE SHUTTERED.
      Socioeconomically speaking, the Grand Canyon divide between the haves and have-nots talked about during the past ten plus years is essentially complete.
      Moving forward, the situation of the 100 million or so U.S. have-nots will not move forward; it will continue to deteriorate from here. Gradually over time, this sector of society will reform and transform, I suspect with more of a mercantilist mentality which is still found here in Asia/China. For them we have no easy answers nor solutions on the horizon. It should be genuinely disconcerting and upsetting to any mindful person no matter how close or distant to it we may be.
      AS RICK’S FORUM HAS COVERED IT, THESE FOLKS WERE ALSO INTENTIONALLY UNDEREDUCATED BY THEIR OWN GOVERNMENT. ANOTHER TRIUMPH OF THE CENTRALIZATION OF CONTROL.
      For the rest of the world, the comfortable and rich, party on. Asia is rising led by China and that is something to encourage and be thankful for, though we should fear that Chinese leadership’s arrogance will take a wrong turn rather than a cooperative turn to become more of a global team player.
      FROM WHAT PERSPECTIVE? MANY PEOPLE WILL ARGUE THAT CHINA HAS THE POTENTIAL TO BE THE MOST DANGEROUS COUNTRY IN THE WORLD AS WELL. SURE SEEMS LIKE YOU PUT A LOT OF FAITH IN THE PARTY AT THE TOP.
      Yesterday, my wife and I were at Shanghai’s massive wholesale clothing area at QiPu Lu…one square kilometer of densely packed clothing/shoe/bag shops…we picked up her perfect UGGS boots for $19, my new formal black suede tuxedo shoes for $35. Was it busy? No, it was rather busy beyond belief; a typical, daily, relentless shoulder to shoulder swarm of lower to middle class Chinese citizens mostly clueless about the the world beyond their own, moving through every crammed aisle an across every side-walk and intersection; street vendor carts frying and tossing freshly made fast food noodles, veggies, egg crepes for customers lined up for a $1 meal, routinely ignoring the ghastly hygiene levels, and yet we never seem to get sick.
      The U.S. it seems had in fact transformed itself into an unsustainable economic and societal model centered around a spoiled rotten middle class that certainly does not deserve what is happening to them in this decade; all people’s within a culture are brainwashed by their culture, they are not fully accountable for coming to actually believe they need 3 TV sets and to charge every purchase as part of normal happiness. Government and big business are to blame for creating that environment and shaping their behaviors. The unfortunate shall now by necessity somehow be cast aside (already have been) and managed; an undertaking of complexity and breadth difficult for most to fathom.
      Cheers, Mario
      WITH YOUR CONCLUSION, I’M NOT SURE WHAT TO THINK REALLY? BTW, WHICH MARIO WROTE THIS? ANYWAY, THE GOVERNMENT SAVING INDUSTRIES THAT SHOULD HAVE DIED AND REWARDING OUR TORMENTORS WITH BAILOUTS SEEMS TO HAVE GOTTEN OVERLOOKED. THE USA IS A MODERN DYSTOPIA. THE TRENDS IN THIS COUNTRY ARE AWFUL. NO OBJECTIVE VIEWER, WHEN EXAMINING A TIMELINE, WOULD SERIOUSLY ARGUE THAT THE USA HADN’T PEAK X YEARS AGO AND HAS BEEN DECLINING WITH INCREASING SPEED EVER SINCE.
      THAT FOLLOWING ARE ALL PATHETIC SHELLS OF WHAT THEY ONCE WERE:
      THE PRESIDENCY
      CONGRESS
      THE MEDIA
      MONETARY POLICY
      FISCAL POLICY
      FOREIGN POLICY
      MANUFCATURING – AUTO INDUSTRY PARTICULARY
      FINANCIAL SYSTEM – BANKING/BROKERAGE/INSURANCE
      HEALTHCARE – ABOUT TO SEE A SERIOUS DECLINE
      CRIMINAL JUSTICE/CRIME PREVENTION
      EDUCATION SYSTEM
      BIG TIME SPORTS – STEROIDED AND RULE-CHANGED TO RESEMBLE VIDEO GAMES
      TELEVISION – DO I NEED TO COMMENT?
      FILM – SEE TV COMMENT
      FICTION – SEE TV OR FILM COMMENT
      NEWSPAPERS/MAGAZINES – COMIC BOOKS CARRY MORE WEIGHT
      POPULAR CULTURE = MINDLESS CESS POOL

      ON THE OTHER HAND, BOOZE, DRUGS, FIREARMS, PRISONS AND THE MIC ARE BOOMING, AS IS PROPAGANDA.

      IT TOOK ME A MINUTE OR TWO TO TYPE THIS LIST. JUST THINK IF WE HAD THE TIME TO REALLY LOOK AT IT ALL. I THINK THAT THERE ARE A FEW IMPORTANT CONSIDERATIONS ON THIS LIST. MAYBE I’M WRONG AS IT DOESN’T SEEM LIKE I’M HIP TO WHAT MAKES FOR A HEALTHY AND PROSPEROUS ECONOMY/SOCIETY ANY LONGER.
      MY OUTMODED WAY OF THINKING HAS ME BELIEVING THAT DOGGIS MAKES A LOT MORE SENSE:
      these markets are broken, pure and simple. the low volume positive feedback loops of HFT is a joke, and is used in concert with QE, and the ppt to levitate prices to very very rich multiples.
      nothing means nothing when it comes to equity prices. i have long said the only thing that stands between us and anarchy are these equity markets, and something will happen to arrest the control of the markets away from the madmen at the helm…..

    • mario cavolo December 6, 2010, 6:06 pm

      Evening RWD,

      I want to parse out briefly to try to cut directly to what I believe is the underlying issue for your passionate reply. My observations in this particular piece did NOT include judgement any of the related nasty, rotten ethical violations which may have caused such developments. In many previous posts here and other articles, I am also avidly encouraging all of us to celebrate gathering the bastards up and hanging them by their thumbs. I share your moral outrage across the board at the many outrages committed.

      So then sticking by my comments such as…” the way of the world and the U.S. has experienced dramatic socioeconomic shifts…”…well yes much of that has occurred at the hands of corrupt govt, bankers, unions and big biz which ruined it for them, they certainly didn’t ask for it.

      Parsing “though we should fear that Chinese leadership’s arrogance will…” again I stated it here and couldn’t agree more with concern about China’s next moves. However, I will also objectively note and respect the degree of success to which the current Chinese gov’t has raised up a country and 300 million of its citizens from poverty into middle class comfort and economic growth, a feat that has no precedent in history. With plenty of warts, they have done a remarkable job with the circumstances they faced in the past 10 years, while American leadership, as we know has not.

      Again, I share your moral outrage as to the causes, but the how of how we arrived here doesn’t change the current state of affairs at hand for the different affected groups, even agreeing greatly with your comments related to how the citizens are not culpable, but have been brainwashed and led to the slaughter. I am as you asked not comfortable with any of it as I said “It should be genuinely disconcerting and upsetting to any mindful person no matter how close or distant to it we may be.”

      I just wish all this intelligent and passionate stimulation here between all of us on the board could somehow lead to a productive action response that could start things in a better direction or undo some of the wrongs, but such political or societal activism seems also more and more and impotent waste of time too.

      Cheers, Mario

    • redwilldanaher December 6, 2010, 7:04 pm

      Hi Mario, I know that you’re a conscientious commentator. I read into some of your comments just the way you supported them in your reply. My responses were partially to you but also to the greater in number than I would have guessed perma-rationalizers that always find a way to look past things they shouldn’t while accepting the current ends regardless of the means. I think the final comments in your reply are spot on. Working hard within the system isn’t the answer IMO. The only way I can see things working is if we can get beyond their reach. That won’t be easy either but working inside of this madness seems futile to me.

    • Other Paul December 6, 2010, 7:16 pm

      Mario,

      Totally agree with you.

      The US Gov’t, through various make-work programs helped millions in the 30s US Depression.

      Since the 60s, the US Gov’t has tried to keep the have-nots at bay, mostly successfully, through welfare programs including, now, extended unemployment. Those transfer payments are not keeping up with dollar depreciation, and, as you point out so well, will not keep up in the future (for example, no adjustment for SS payments for 2 years straight).

      The employed will have their wages and benefits will track inflation, more or less. Taxes will rise and pensions will be cut.

      Gov’t’s job will be to keep the unemployed from causing civil disturbance. Grannie will be eating more cat food. Grannie is too old to riot and, for others, too weak to.

      The greatest threat to civility will be from unemployed young males, of which there are many.

      The biggest wildcards are:
      1. The rate of dollar depreciation (Gov’ts and the Fed want it to be as slow as possible)

      and
      2. Interest rates. The Fed and Gov’t monetizing of debt will suppress interest rates as more money tries to find the “safest” home, Treasuries.

  • Benjamin December 6, 2010, 5:38 am

    Apparently, and while the details are yet fuzzy, congress has reached some kind of agreement whereby tax cuts and unemployment benefits will be extended. You get that, folks? They have to keep on needing to stop borrowing, which will kill us, or we die, simple as that.

    I know things are terrible for many, but for some reason I have to enjoy this assertion of reality in the final hours. The whole system is a one-legged quadriplegic in a butt-kicking contest!

    • roger erickson December 6, 2010, 9:56 pm

      “one-legged quadriplegic in a butt-kicking contest”

      thanks for the hyperbole; best laugh today;

      does that constitute fiat shadow boxing?

  • doggis December 6, 2010, 2:50 am

    rick,

    these markets are broken, pure and simple. the low volume positive feedback loops of HFT is a joke, and is used in concert with QE, and the ppt to levitate prices to very very rich multiples.

    nothing means nothing when it comes to equity prices. i have long said the only thing that stands between us and anarchy are these equity markets, and something will happen to arrest the control of the markets away from the madmen at the helm…..

  • Rick Ackerman December 6, 2010, 1:28 am

    Think of it as 1 a.m., Jill, since that’s about where we are relative to the dawn.

  • Jill December 6, 2010, 12:25 am

    Darkest hour is just before the dawn. Or is that just what people say to each other while they are drinking Kool Aid in the dark?