The Central Banker's Roller Coaster

GDP was revised higher today, but mostly due to inventory builds. Not good!

It's the Debt, Stupid!

Central Bank Emperors Have No Clothes!

RBS' Alberto Gallo,

"Policymakers responded to the financial crisis with easy monetary policy and low interest rates. The critics — including us — argued against 'solving a debt crisis with more debt.' Put differently, we said that QE was necessary, but not sufficient for a recovery. We are now coming to the moment of reckoning: central bankers look naked, and markets have nothing else to believe in."

When Do We See the Consequences?

After being up 350 points today, the Dow closed down 200 points instead. When will we begin to see the consequences? When will a Bear Stearns collapse again? When will be the Lehman Bros moment?

Today's collapse:

The Dow has lost about 2500 points since late July!

Do Bubbles Burst? Yes!

I believe we'll see a bounce back soon, but this is only the opening salvo. All bubbles burst! There has never been a financial bubble that didn't eventually burst! There is another major financial crisis brewing. It will be an even bigger one! "You ain't seen nothin' yet!" Eventually, we'll see a US government fiscal crisis too! And both political parties will be responsible!

Ouch! Recession Warning!

S&P 500 is now negative for the year! And this morning, filings for unemployment increased four consecutive weeks, for the first time in five years!

St Louis Fed Admits QE Failure, at Cost of Doubling the Debt!

What More Need Be Said?

Stocks leaped more than 240 points today. China announced that they will engage in quantitative easing, just and Japan, Europe, and the US have done! Meanwhile, earnings reports were "downbeat".

Our Mirage Economy! A House of Cards!

Following headlines like these...

 we get stock market reactions like this:

Why? Wall St have become so addicted to injections of money from central bankers, that they now dismiss all risk! Their faith in the false gods of central bankers, that they don't care about real, robust, organic economic growth any more! It's the reaction of an addict!

Treasuries Scream "Fear!"

Despite reassurances from the Fed, the skyrocketing Treasury bond market is sending the message that investors are extremely worried. They're buying US government bonds as if there's no tomorrow. That means only one thing: they're worried!

Even as the Fed talks about possibly raising interest rates, investors don't believe they will. They're buying bonds, which lowers interest rates. That means that their fears outweigh what the Fed is saying!

Jobs Propaganda!

Dreadful Jobs Report Sends Stocks Higher!

What is wrong with this picture? 

And yet stocks leaped higher following this news!

What More Need Be Said?

Housing Bubble Defined

These homebuilders are shooting themselves in the foot! They'll build more and more homes just as the economy begins to sink! And the Fed is expected to begin raising interest rates when they meet Tuesday and Wednesday this week! What impact will higher interest rates have on housing, both sales and affordability?! Well imagine that -- another housing bubble, right before our very eyes! POP goes the bubble!

Do These Headlines Today Look Like Prosperity To You?

In a robust economy with strong demand, this would never be the case::

Factory Orders: Getting Worse!

Today's Headlines: UGLY!

"Welcome To The Contraction": Q1 GDP Drops By 0.7%, Corporate Profits Crash

 U.S. Households Under Pressure: Stagnant Incomes, Rising Basic Expenses

Is Bad News, Bad Again? Europe And US Stocks Slump

GDP Report Confirms Global Trade Is Crashing, And Why That Is Good News For Some
Consumer Sentiment Slumps To 6-Month Lows, Current Conditions Tumble
Chicago PMI Bounce Is Dead, Crashes Back Near 6 Year Lows

How Japan's Unemployment Rate Dropped Even As 280,000 People Lost Their Jobs

Kiss Your Pension Fund Good-Bye

Martin Armstrong explains that a Supreme Court decision opens the door for the government to confiscate all private pension funds.

"Monday’s unanimous ruling sends a warning to employers that they now must improve their plans, as it is now an obligation to project employees. This comes just in time for the next step is government to seize private funds and prosecute employers who poorly chose a fund manager. This fits perfectly, and is just in time for the Obama Administration’s next assault as they prepare a landmark change of its own by issuing rules requiring financial advisers to put the interest of customers ahead of their own. This creates a very grey area wide enough to justify public seizure of pension funds under management."

Read the rest here. 

Stocks Sell Off In Heavy Volume

The VIX spiked today, with stocks selling off in heavy volume. The Dow closed down 190 points. A word to the wise...

Economic Headlines = Data Down, Stocks UP!

Go figure: