Hand-basket, Stage Two

Well, I'm back from sailing and, as a reader said in a comment, all "Hell" broke loose while I was away. Putting it another way, things kinda went to hell in a hand-basket, as the saying goes...

Is this a climactic event that signifies a major bottom? No, I don't think so. It looks to me that we are in the early stages of a long, drawn-out process of reshaping the economy to a more rational model, one where corporatism, finance and markets play a smaller role. The clearest sign can be seen in politics, where Sen. Obama is successfully articulating a common sense theme: America's economy should benefit the vast majority of the people instead of a few mega-rich.

Corollary: all wealth-concentration processes will be running on reverse for years, including the biggest and most notorious of them all, i.e. speculative finance (high leverage, senseless M&A activity, etc.).

The old model is still very popular abroad, particularly in China and Russia. Despite their communist background (what a sad joke), the most extravagant excess is now happening right there. During my trip I heard a yacht broker boasting of chartering a sailing yacht for $450,000 for just one week to Russians - a big yacht (over 120 ft.), but still...

That's it for today, the employment numbers will be coming out soon and will update afterwards.

Employment numbers update.

The new positive spin mantra following economic releases is "only slightly worse than expected". That's how today's bad employment figures were labelled by the mainstream press, used to support the view that the economy is "resilient". Notice the erosion in the MoT dialectic: we have gone from "better than expected" and "in line with expectations", to "only slightly worse". I bet "one-time negative adjustment" is next.