Bill Paxton as Hudson in Aliens “Well that's great, that's just fuckin' great, man. Now what the fuck are we supposed to do? We're in some real pretty shit now man...” I loved that quote then and it seems pretty appropriate now considering the last two weeks of Afghan, economic and market news.
What shocked me, not really, most today is that not a single pundit, analyst, or talking head mentioned that yields on US treasuries dropped today. The 10-year T-note yield sank to 2.32%, down from 2.56% on Friday and the lowest since early 2009. Shorter-term yields also tumbled. The three-year T-note yield slid to 0.42% from 0.49% on Friday. Ironically, investors shunned shorter term three and six month bills in favor of longer-term yields. Yes the same longer term yields tied to US debt that S&P warned about. When it’s all said and done, US debt is still the world’s safest bet.
The big Iowa straw poll is this Saturday and it will coincide with Texas Governor Rick Perry’s announcement that he is running for President. Welcome to the party Governor. Now while believe digging up dirt about you when you were in college is a blatantly political, I do have to ask one question: How the hell does a college student get a ‘C’ in physical education? You get a ‘B” for putting your jock strap on properly.
Speaking of Rabid Rick Perry, here is a strange testimonial from John Hagee (the same “man of the cloth” who called the Holocaust ‘Devine Intervention’) "We pray for our governor Rick Perry who has had the courage today to call this time of fasting and prayer just as Abraham Lincoln did in the darkest days of the Civil War. We thank you for his leadership, his integrity, and his loyalty to God and country." That’s a strange comparison since it was Lincoln who risked it all to keep the Union together and it was Perry who spoke of secession.
I really like President Obama, I think he is a good man and unlike what the Faux News crowd spews he is neither a Marxist nor anti-American. But as I have said frequently in this space: he must lead by inspiring a shared vision. Be honest and damn the talking points and worry less about re-election. Encourage the heart and challenge the process; mobilize the masses and take on the business as usual approach in D.C.
Want to know why tax cuts aren’t being very stimulative? This recession is not like previous recessions. This recession was brought on by a debt fueled rock star binge drinking session followed by a sudden credit collapse as the taps were turned off. When we woke up, we had a massive hangover, there was a banker dressed like a lion in our home, and there was an Asian man wanting to beat the crap out of us. Seriously, Americans realized that they had spent beyond their means as they pulled cash out of their perpetually appreciating homes to fund their new SUV’s, swimming pools, motorcycles, and boats. Now they are saving every penny as they worry about jobs, holding onto their homes, medical expenses, etc. Yes the American consumer is doing exactly what he should be doing to repair his individual balance sheet. Keep cutting taxes and he will simply pay off credit card or other debt. It’s not that stimulative.