The above chart is the U Michigan Sentiment Data as just released by the St Louis Fed. Things seem to be coming back as viewed by the consumer. The depth was reached and the return is arriving.
Now the above is the data on commercial real estate loans, an area we have been concerned about. This too seems to be rebounding. As we discussed in a prior post the issue is where is the trillion plus that the FED pumped out to the economy which has not made its way to M2? That is the concern for the long run.
The major concern is that there seems to be a well directed recover thanks to the FED. However the current Administration wants another stimulus package, the first has not even had any effect, we are recovering due to the FED not the current Administration. The result of a second package could be a total economic collapse. I suspect that facts are meaningless.
The second fear is the loss of Bernake and the insertion of Summers. The Financial Times had "lunch with Larry Summers". He states:
"“The president made two things clear to us early on,” recalls Summers, who answers my questions in full, idea-packed paragraphs, rocking gently back and forth in his seat as he gets into the flow of an argument. “He would do what he had to to fix the banking system, to get the economy out of the rut in which he was inheriting it. But he had run for president to do long-run, fundamental things, like fixing healthcare, like having real energy policy, like reforming education. And we weren’t going to be distracted from those things.”
It continues:
"The chief intellectual casualty of the current crisis has been the “efficient markets” school – the theory, associated with such erstwhile laisser faire gurus as Alan Greenspan, that market participants are governed by rational expectations and markets are self-correcting. As an academic economist, Summers has studied the shortcomings of that approach but, working on Wall Street gave him, he says, a more visceral understanding of the “self-referential” character of markets: “Markets are concerned with the ultimate health of economies and the like but they’re equally or more concerned with what the likely judgments of other market participants in the short run are.”"
This seems to be a clear indication of the intent to create a centrally regulated economy. The way to do that, collapse the economy with Government debt and massive inflation. It then goes on to characterize Summers in a rather clear manner:
"Summers has managed to eat about half of his salad and is now munching on one of the blueberry macadamia nut cookies an assistant brought in midway through our meal. It seems like a good moment to ask him the question that has bedevilled White House-watchers since he was appointed to head the NEC: what exactly is his job?
“My role is to make sure the president gets access to the best economic thinking he can on everything that touches the economy” he says loyally. “That means making sure that no arguments go unscrutinised ... and it means helping everyone on the president’s economic team make the best case for whatever policies they prefer.”
The notion of Summers as an intellectual handmaiden, “helping” others refine their arguments, is at odds with his reputation as a supremely self-confident intellectual bulldozer..."
Cookies and a bulldozer...sort of a Sesame Street character...and then the FT asks:
"Summers is not easily seduced but he seems thrilled by the demands of his current job. “It is certainly incredible, as intellectually challenging as anything I’ve ever done ... What makes it so challenging and exciting, as well as exhausting, is the range of subjects.”
Even so, Washington rumour has it that the NEC isn’t big enough for Summers and that he regrets not leading the Treasury and yearns to run the Federal Reserve. Does he?
“I am totally engaged by the breadth of issues that I am asked to think about to support the president.”
I push one more time: “Even for you, that’s enough?”
“That’s more than enough.”"
The thought of this happening to the FED is terrifying.
Now the above is the data on commercial real estate loans, an area we have been concerned about. This too seems to be rebounding. As we discussed in a prior post the issue is where is the trillion plus that the FED pumped out to the economy which has not made its way to M2? That is the concern for the long run.
The major concern is that there seems to be a well directed recover thanks to the FED. However the current Administration wants another stimulus package, the first has not even had any effect, we are recovering due to the FED not the current Administration. The result of a second package could be a total economic collapse. I suspect that facts are meaningless.
The second fear is the loss of Bernake and the insertion of Summers. The Financial Times had "lunch with Larry Summers". He states:
"“The president made two things clear to us early on,” recalls Summers, who answers my questions in full, idea-packed paragraphs, rocking gently back and forth in his seat as he gets into the flow of an argument. “He would do what he had to to fix the banking system, to get the economy out of the rut in which he was inheriting it. But he had run for president to do long-run, fundamental things, like fixing healthcare, like having real energy policy, like reforming education. And we weren’t going to be distracted from those things.”
It continues:
"The chief intellectual casualty of the current crisis has been the “efficient markets” school – the theory, associated with such erstwhile laisser faire gurus as Alan Greenspan, that market participants are governed by rational expectations and markets are self-correcting. As an academic economist, Summers has studied the shortcomings of that approach but, working on Wall Street gave him, he says, a more visceral understanding of the “self-referential” character of markets: “Markets are concerned with the ultimate health of economies and the like but they’re equally or more concerned with what the likely judgments of other market participants in the short run are.”"
This seems to be a clear indication of the intent to create a centrally regulated economy. The way to do that, collapse the economy with Government debt and massive inflation. It then goes on to characterize Summers in a rather clear manner:
"Summers has managed to eat about half of his salad and is now munching on one of the blueberry macadamia nut cookies an assistant brought in midway through our meal. It seems like a good moment to ask him the question that has bedevilled White House-watchers since he was appointed to head the NEC: what exactly is his job?
“My role is to make sure the president gets access to the best economic thinking he can on everything that touches the economy” he says loyally. “That means making sure that no arguments go unscrutinised ... and it means helping everyone on the president’s economic team make the best case for whatever policies they prefer.”
The notion of Summers as an intellectual handmaiden, “helping” others refine their arguments, is at odds with his reputation as a supremely self-confident intellectual bulldozer..."
Cookies and a bulldozer...sort of a Sesame Street character...and then the FT asks:
"Summers is not easily seduced but he seems thrilled by the demands of his current job. “It is certainly incredible, as intellectually challenging as anything I’ve ever done ... What makes it so challenging and exciting, as well as exhausting, is the range of subjects.”
Even so, Washington rumour has it that the NEC isn’t big enough for Summers and that he regrets not leading the Treasury and yearns to run the Federal Reserve. Does he?
“I am totally engaged by the breadth of issues that I am asked to think about to support the president.”
I push one more time: “Even for you, that’s enough?”
“That’s more than enough.”"
The thought of this happening to the FED is terrifying.
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