Hell Street plunging again in devil’s bubblesmoke…-)

DID WALL STRETS TURN AGAIN TO A HELL STREET, or never stopped to be hellish?

“UP THE RALLY HILL, THERE’S A SISIPHO’S HELL” the City blues says.

A tale of  W street and the W recession

zerohedge

New post: Equities: Reaching The Danger Zone http://tinyurl.com/y94y8h7 /Monday 12 April, 5 pm GRT

Look at this elementary graph, that you can easily redo yourself on the 1st page of today’s wsj oL, even without being a subscriber – as I must be professionally.

Well, not only the bigger share of the dead bubble appeared in Wall Street, much more than in the RoW (Europe, BRICS and Japan: aggregated and implicit here, in the difference between the two curves – SIMPLICITY and SYNTHESIS matter, for a 1st look).

But, since from the 2009 policy-driven rallys, devil’s smokes reappear again at Hell St.; much before a recovery of Mean St. I don’t think there is any  serious debate about the fact that AT LEAST Hell\Wall St. is already in a new bubble: with all the self-evident, dramatic implications of such a tenet. The analytical-policy complex debate (where perspectives, schools and interpretations of the empirical facts necessarily diverge, before looking for a new convergence focus and a relative ricomposition of the profession) is about how much such a New Bubble is a matter of “CONGIUNTURA o STRUTTURA”, SR or LR in its very nature – i.e. the relevant dynamic forces behind this unsustainable model: of overvaluation of Western assets, at the price of a permanent Eastern overgrowth. My position is that the LR bubble is evident, and actually was never fully dried up; while we are about to enter also an additional SR one, starting from some asset markets. La musica  non cambia.

A lot of work for the world  Obamas, their teams and 1st of all the invisible college of CBs that saved us from another 1929\31 – until now. At a price.

According to the two distinct (but a bit overlapping: GLI ESTREMI SI TOCCANO SEMPRE) Austrian and post-Schumpeterian (evolutionary) schools: AT THE PRICE of  repressing the “Invisible Foot” who makes room for a New Wave of innovations and their bundles. No foot, no room.

As for the congiuntura, there are all the usual caveats about the VWL (VolksWagenLite) shapes of the recession in the different macro-regions of the world, and 20 days ago I listened to such an interesting breakfast time (03/25/2010 09:34) twitting as:

@zerohedge New post: Is Something Big In The Market Coming? http://tinyurl.com/y97jayc“.

The twitting and the post were introducing to an acute FINALE by David Rosenberg (Breakfast_with_Dave_032510.pdf), concluding that markets are signalling turnarounds

And lastly, there is no V-recovery anywhere, except in the Fed-prodded stock market.

Even that bastion might not be firm for longer. In fact, today at early dawn here in Verona, the same little Spring bird awakes me via TweetDeck sounds to tell me:

zerohedge

IMF Prepares For Cataclysm, Expands Backup Facility By Half A Trillion For “Contribution To Global Financial Stability” http://bit.ly/a4vMeh

With linguistic determinism, the philosophical WordPress blog cracking process distills down here such a nice continuation: the-gates-of-hell-open!!!

… what if the demons from Hell decided to enter Wall Street and other business sectors so as to better manipulate and corrupt society? And thus Hell, Inc. was born.

We are at a more ground level here, and we are looking at the devils in the markets details.

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Obama New Deal, phase 1

Feb. 17 update – The final stimulus bill allocates $ 790.6 bn:  the CBO estimates tax cuts will amount to $ 288.5 bn and public expenditures about $ 500 bn (wsj) for a total est. cost of $ 787 bn. Today the President signed the bill and wrote us

enzo fabio —

Today, I signed the American Recovery and Reinvestment Act into law.
This is a historic step — the first of many as we work together to climb out of this crisis — and I want to thank you for your resolve and your support. (…)
I’ve assigned a team of managers to oversee the implementation of the recovery act. We are committed to making sure no dollar is wasted. But accountability begins with you.
That’s why my administration has created Recovery.gov, a new website where citizens can track every dollar spent and every job created. We’ll invite you and your neighbors to weigh in with comments and questions.
Our progress will also be measured by the tens of thousands of personal stories submitted by people who are struggling to make ends meet. If you haven’t already, you can read stories from families all across the country:

http://my.barackobama.com/yourstories

Your stories are the heart of this recovery plan, and that’s what I’ll focus on every day as President. With your continued support, we’ll emerge a stronger and more prosperous nation.

Thank you,
President Barack Obama

On the eve of the 200-Charles Darwin Day, the US House and the Senate have finally agreed on the mega-stimulus package, which President Obama might already sign next Monday,  February the 15th, i.e. 25 days after entering the White House (1/4 of the early 100 days, when the Beauty versus the Beast – Apocalypse Now – fight will B decided upon in the short term).

Mainstream economists, with whom this time we are tempted to almost agree once (but we have other priorities, since it is not OUR problem to save Capitalisms, but their victims), converge with the great, sublime Paul Samuelson (self-defining himself a Centre-Left, moderate Keynesian), by saying that some moderation and “watering down” (in the Congress revision) of Adm. Obama’s proposals is a first best, since  -e.g. – a demand – only perspective  is balanced with less unilateral supply-side  considerations as well (on this, our friend Michele Boldrin is writing quite important and interesting, fresh things on NfA – Noise from America blog, since early this year; we will discuss them, here and on NfA at length, soon).

Let us say that this is the state-of-the-art in academic Political Economy, and it is symbiotic with what happened in these hard Congressional fights about the final compromise, during the last weeks. One day, just symbolically Sen. Mc Cain presented a  motion to cut the stimulus to half. It comes out with a great momentum, a variety of tools and targets (see the Summary below).

A HISTORIC BILL, starting the Obama New Deal long series, in the next few years.

Sources:

http://www.slate.com/id/2211145?wpisrc=newsletter

Congress Makes a Deal

http://online.wsj.com/article/SB123436825805373367.html?mod=todays_us_page_one

Congress Strikes $789 Billion Stimulus Deal

Historic Bill Would Spur Road Building, Give Businesses Tax Breaks, Expand Broadband Access; Final Passage Expected Soon

wsj summary table:

Focal Points of Stimulus Package

Key goals and what indicators to use to gauge success.

Business confidence
Steps: Tax breaks for businesses, appropriations.
Measurement of success: Stock market results and management surveys.

Low income/unemployment aid
Steps: Benefit checks, foodstamp increases, health insurance assistance, Medicaid.
Measurement: Benefit rates

Consumer spending
Steps: Tax breaks to workers.
Measurement: Retail spending, consumer-confidence surveys.

Job creation
Steps: Infrastructure spending, aid to states.
Measurement: Unemployment.

Economic Growth
Steps: Spending, tax breaks.
Measurement: GDP.

Please also note that:

The stimulus accord is a major win for the high-tech industry, which will receive billions of dollars in subsidies to expand broadband access to rural and other underserved areas and a huge infusion of funds to computerize health-care records.

The latter is a very important point, since it marks much more, than just Silicon Valley getting repaid for the EARLY support to “Sen. Nobody” (see on this Giuliano da Empoli 2008, already a classic and comprehensive book on Obama, in Italian; and our various, often updated  static pages on Obamology in http://arcapedia.wordpress.com/).

On the other hand, it is a strong counter-tendency, a counter-factual to the MARKET SELECTION PARADIGM – e.g., theorised in Italy by the no.1 telecom expert, prof. Enzo Pontarollo.  He argues that it is not so bad that the Schumpeterian effect (sometimes called “The Invisible Foot”) and the credit crunch crisis SELECT among very expensive digital highway plans, and allocate credit only to the more rentable ones, where effective demand will repay faster, at least a part of the infrastructure investment.

This is such a complex, multi-dimensional issue. Let us just say  this, as a complement and further qualification to the important, and  theoretically well-rooted Prof. Pontarollo’s argument.

Japan (as far as I know,  the main great and still powerful State doing this) usually doesn’t bother much about “the digital market” plans selection – perhaps also because Japan’s regional economies have been levelled-up during the last half century, and suffer much more from congestion than regional, or rural\urban imbalances. They just shape and anticipate effective market demand years, or even a decade before, laying down  futuristic cooperative-public digital highways (namely in the New Generation Networks, lately).

But if the Nippon State is  now on the defensive, such programs will be delayed for many years, and this anticipatory effect will be lost. In a strong “neo- Keynesian & neo- Schumpeterian” mixed, eclectic and PRAGMATIST (“Nudge“) approach, the Obama’s New Deal starts now doing what Japan has problems to keep up to. This is another Invisible Foot effect: not across regions but across Nations: the US just elected Obama, while the Nippon political system is in search of a “2nd Republic” trajectory since 20 years ago, with no viable, longterm solution yet.

They desperately need either a Berlusconisan, or an Obamasan.

This stimulus Bull hitech component, has little to do with FDR, and we are happy about that: since you know (or at least, regular blog readers do) that we fully agree from the left with the “right” critique to FDR  –  stemming from the careful Amity Shlaes historic reconstruction of what really happened during THAT New Deal 8o years ago (on this precise point, we take a small bit of distance, a degree of freedom  from Obama’s public image and self-representation). In any case, ce n’est qu’un debut.