Well the boyz finally got the indexes green after a little selling on the news that the ADP private sector payrolls shrank once again, and the Chicago PMI was disappointing. Sometime folks will figure out that the economy is not recovering, and the mirage of “recovery” is only sustained by government spending, as massive deficits quietly build the largest credit bubble of all time.

And it is not just the U.S. Deficit spending has allowed many countries to live above their means, running up large debts for years. The recent recession has allowed governments to justify spending even more in the name of “stimulus.” This spending and the resultant debts have only served to divert resources that should have been invested in the future to instead fund current consumption. This tactic makes the economic numbers, such as GDP, look better, but sows the seeds of ultimate collapse as the industrial base becomes obsolete and loses competitiveness.

This global sovereign debt bubble has already started to crack, as the “subprime” countries – the PIIGS – are already in trouble. The Alt-As, the U.S. and the U.K., the “no-docs”  who are concealing their problems by legalizing deceptive accounting , are already being warned that they are in danger. The exporters and resource countries – China, Germany, Canada, Australia and so forth – will be last, but will suffer as the others collapse because their import earnings will be reduced or cut off. And most of them have private credit bubbles that would make your hair curl. It is all so obvious and so classical, but nobody wants to acknowledge the situation so whistle on, boyz…

A good summary of the idiocy of modern economists. I especially like the quote from Keynes, which I have mentioned before but it is worth repeating:

“Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”

The more things change, the more they stay the same. Of course, the wisdom of Keynes is shown by his last words: “My only regret in life is that I did not drink more Champagne.”

Fear-mongering over anthropogenic global warming “climate change” seems to be on the wane after the discrediting of much of the research on which the claims were based. By the way, there was news this morning that the alarming predictions of changes in the Gulf Stream have so far been wrong. (Don’t get me wrong – I believe that climate changes – continuously. But I don’t like bad science.) Swine flu, H1N1, on th eohter hand, has quietly faded away without much of a fuss.

In Britain, says Flynn, the discrepancy between the estimate of the numbers of people who would die from flu and the reality was dramatic. “In the United Kingdom, the Department of Health initially announced that around 65,000 deaths were to be expected. In the meantime, by the start of 2010, this estimate was downgraded to only 1,000 fatalities. By January 2010, fewer than 5,000 persons had been registered as having caught the disease and about 360 deaths had been noted,” says his report.

Maybe there should be a fuss. I don’t think we need to look far for the cause of the fear-mongering:

One of the central questions of the Council of Europe inquiry, says Flynn, “concerns the possibility for representatives of the pharmaceutical industry to directly influence public decisions taken with regard to the H1N1 influenza, and the question of whether some of their statements had been adopted as public health recommendations without being based on sufficient scientific evidence”. He cites as an example the decision to recommend two doses of flu vaccine for children, which was later questioned.

“Various factors have led to the suspicion that there may have been undue influence by the pharmaceutical industry, notably the possibility of conflicts of interest of experts represented in WHO advisory groups, the early stage of preparing contractual arrangements between member states and pharmaceutical companies as well as the actual profits that companies were able to realise as a result of the influenza pandemic,” says the draft report, which will be finalised when all the evidence has been taken, at the end of April.

The problem of course is that, as the author points out, credibility has been squandered.

Yet another government attempt to support and subsidize the housing market at my expense. I suppose the good news is that the repeated punishment of economically sound behaviors (such as saving, down payments, etc.) and rewarding, with government subsidies like this one, of over-consumption behaviors (zero down, home equity “extraction”, etc.) is going to bring the economy to a standstill and give us a chance to start over.

I am so fed up with this cr*p. It is intended to destroy the principle of personal responsibility and replace it with the nanny state.

The 7-year auction was poor today. Bonds and notes are down, with the 10-year trading above 3.9%. Is the honeymoon over?