U.S. consumer confidence got a boost this month with the
Conference Board's index rising six points, to 52.5 from 46.4 in February -- which
just goes to prove once again consumers are dopes.
Me, I can't help but notice that:
- Mortgage delinquencies are hitting record levels.
- As reported
in Tuesday's New York Times, American
states are sinking under so much debt that at the moment James Cameron is
simply trying to decide whether to make his sequel to Titanic about Rhode
Island or California.
- When the Times wrote about how bad things were in Rhode
Island they compared it to Greece, now known more fiscal mismanagement than for
Aristotle, Ouzo, or the really awesomely bad singing Pierce Brosnan did croaking
out his songs in Mamma Mia! But along with American states tottering at the
fiscal abyss we have a batch of countries led by Greece and most of the
southern tier of Europe -- so much for the Mediterranean diet. Olive oil may be
a great source of omega fatty acids but apparently it also dulls that part of
the brain with which we add and subtract.
- As if all that weren't bad enough we've got something like
900 to 1,000 regional banks flirting with insolvency and a Treasury Department
that is crossing its fingers and hoping for a "soft-landing like the S&L
crisis" as a best case scenario.
- And then there are all those under-funded public pension
funds and liquidity challenged endowments across America. Public funds aren't
insured by the Pension Benefits Guarantee Corporation, but like the states and
the cities and the banks and the big universities you can bet that when they
start to circle the drain Uncle Sam is going to feel compelled to fish them out
-- using your wallet as a net.
- On top of this, the bright red locomotive that everyone is
expecting the Chinese economy to be is depending on exports to a staggering
United States, built on a foundation of real estate and share price bubbles, held
together by a fragile scaffolding of banks whose assets and liabilities are
very hard to calculate and has an economy linked to a currency that is
presenting them with a choice between inflation or less competitive goods and
services.
And so, as we say on Passover, "What makes this recovery
different from all other recoveries?"
Could it be that it is not really a recovery at all but just
a respite between economic calamities? (My theory is that those free-spending
Republican National Committee fund-raisers were in that S&M strip club for
an economic briefing.)
I don't know about you but I'm going down into my basement
until those consumers come to grips with reality. (Why do we even measure
consumer confidence anyway? Isn't it the
irrational exuberance of consumers that usually gets in trouble in the first
place?) Maybe I'll watch an old Marx Brothers movie. As Groucho once said (no doubt referring to a
consumer),"He may look like an idiot and talk like an idiot but don't let that
fool you. He really is an idiot."
Or maybe I'll just read a book (like Michael Lewis' great The Big Short which will have all of you understanding the on-going nature of
the financial con-game and joining me in my basement in no time.) Because as
Groucho also said, "Outside of a dog, a book is man's best friend. Inside of a
dog, it's too dark to read."
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