Reply #41: MOGAMBO GURU: Things Are Getting Spookier And Spookier [View All]

[Tace]

Richard Daughty, the angriest guy in economics
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-- The big news, I guess, is that required bank reserves dropped to $42.2 billion, even as bank deposits climbed and new loans/leases dropped. Of course, the Treasury printing up $3.8 billion in actual cash last week was pretty exciting, too. This amount of cash comes to about $27 for everybody in America who has a job. And though it is obviously being used to pay off Iraqis and Halliburton and all kinds of people who would not take a check, it still adds to the world supply of dollars, and after just a couple of transactions will imbed itself in the world economy, ballooning the money supply a little bit more, and the dollar will get just that little bit much weaker.

Of course, it was not just the bankers and the Treasury acting like slimy little toads, as we can usually count on foreigners who have trade surpluses to keep buying our debt, and the other idiotic central banks of the world to keep buying our debt, too. Sure enough, they sank another $3.3 billion into that particular depreciating asset in the last week. What dorks! Imagine going home and explaining to your wife that, thanks to your supreme incompetence, you have lost a LOT of money in nominal terms, and when you adjust those losses for the loss of buying power of the dollar (inflation), then the real losses become so big, so large, so overwhelmingly huge that we are wiped out, and we have to either sell her car or one of the kids, and you know which one I'd pick.

But it is the breadth of the NYSE (cumulative advancing issues less declining issues) versus price which is interesting, as the former spent most of the year rising, and is now falling, while price ain't done squat, and is actually down, too. Hahaha! The dark and deserted hallways of the Mogambo Mansion echo with the eerie Mogambo laugh of contempt (EMLOC) at those who kept buying stocks, kept buying stocks, kept buying stocks in the face of zero gains! And now they are actually down on the year, too! Hahahaha!

-- The new bankruptcy laws took effect Jan 17, and so now if you need to declare bankruptcy, then you first have to pay for "credit counseling." Why? So that there will be a lot of people being put to work as credit counselors, doofus! Perhaps this is the fabled "re-education" that everyone, including the current chairman of the loathsome Federal Reserve, thinks is the answer to everything. American jobs being sent overseas? "Retrain the workers!" they all say. But they never answer the question "Retrain them to do what?" Now you know!

And if the housing boom is actually bursting at last, as is indicated by lots of anecdotal evidence and some odd statistical facts, then all those brokers and dealers and banks and intermediaries of every stripe and kind are going to need something to do with their considerable time, too! See how it all fits together? Hahahaha!

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