Not Good Bad News: Bad Bad Predictable News
The jobless claims spike. The disinformation rumor spreads that the Obama team will buy out failed mortages, that is, bail out the banks again (and solve Freddie and Fannie by assuming the debt onto the Fed’s balance sheet). POTUS jets to Chicago to lead a rally at Ford, where he boasts that Ford benefited from his bail-out of GM and Chrysler. Puzzle. (Does POTUS know that it is harder to pay off your debts by yourself than to have the Fed pay them off?)
None of this is good news. It is even bad news. Report from Robert Frank at the WSJ of the birth of the plutonomy. The top 5% wage earners in the US now account for 37% of the savings. Without the rich, we do not have a consumer-class economy. The rich panicked in 2008-2009 and stopped spending, and that accounts for the cliff-diving in the economy. They got their nerve back in mid-2009 and started back at the yacht club. Still, the rich are shaky. And an economy that depends upon the rich is not stable. It is even not an economy. It is a feudal kingdom, with ersatz royals called politicians. Shrug.
From Calculated Risk re the Unemployment Claim Spike:
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