Bird in hand better than Two in a Bank

The market keeps going up, up, up...

All based on nothing, nothing, nothing...

And all the roaches on Wall St are happy, happy, happy..

And Yet, if everything is so great, great, great,

Why this...

"During the first 10 trading days of 2012, roughly 6.8 billion shares a day changed hands in the United States, down from 8 billion in 2011 and 8.3 billion in 2010, according to the New York Stock Exchange... " -- CNN/Money

And this...

"The Federal Reserve is likely to step in with $1 trillion worth of easing that could be announced as soon as this month, according to a growing consensus of economists who see the recent uptick in economic growth as unsustainable."  -- CNBC

Huh?  Thought everything was going super?  Markets keep rising.  Traders keep profiting.   What's this about "Unsustainable" and trading overall Down?   Where's all that money that is supposed to be in the market so professional traders and investors can maximize their profits on the backs of 'mom & pop'?

"Americans have been hoarding record amounts of cash since last July, according to the Federal Reserve data.   The monthly amount of cash placed in checking, savings and money market accounts, known as M2, grew at the fastest rate during the last six months of 2011 since the period following September 2001...  $889 billion, or eight times as much (has been put) into checking and savings accounts as put into stocks or bonds during the first 11 months of 2011, according to TrimTabs Investment Research. " (CNN/Money)

Nice to see people waking up to the stock market con game.  Its a nice start.  Eventually people will also wake up to the fact that their excess money shouldn't be in a bank either.

Here's two fun little math problems--   1)  Say you have $5000 in your savings account at 0.1% interest, how much interest do you collect yearly?   2)  How much profit does a bank make off your $5k if it lends to others at 6.9% interest?

Give you a moment to think...

~ Wait!  I need more time.. I don't do good at math..."

OK, answer time:

1)  $5,000 x 0.001 = $5.00   Allowing a bank to hold onto $5k of your money for a full year earns you one big fat, crisp Abraham Lincoln bill.  You can rent One whole movie and still have 75 cents after taxes to buy some chewing gum.

2)  Thanks to fractional reserve lending, a bank is allowed to lend up to 10x what it holds from depositors.  So your $5,000 allows Mr. Big Bank to lend out $50,000.  The interest based on 1 year works out as this:

$50,000 x 0.069 = $3,450, enough to buy.. well, a whole lot of stuff.

Subtract $3,450 - $5 and Mr Big Bank made $3,445 PROFIT off you

And if you think getting one-tenth of one percent is bad, just you wait!!

"The goal of the ( QE3 mortgage backed securities) purchases will be to drive down interest rates even further from current record-low levels..." (CNBC)


Who knows?  Maybe next year at this time $5k brings in a yearly savings return of a Whole Dollar!  Imagine what you can do with a buck?!

What's the morale to the story?

The government, i.e. Fed or Treasury is going to do absolutely nothing for your financial benefit unless you are extremely obscenely wealthy or are a 'Too Big to Fail'.   If somehow it could be orchestrated that tens of millions of people withdrew their non-essential money en masse from banks, it would cause the necessary chaos and fear to cause the Fed to raise interest rates one again to encourage the money to be re-deposited.

But short of something drastic, you, Mr & Ms everyday American will continue getting Bleeped by your government economically.

So really...  why is your $$ in a bank?

The Consumer is Back! (but really not..)

~ Ah, Children.. they learn so young...  OOh.. Barney the Dinosaur!!

When it comes to the US economy, the media are pretty much All liars.  They want you to believe "recovery" so badly they will beat you over the head with incessant pollyanna headlines and distorted statistics until you fully comply with your 'masters' and accept it or get migraines fighting...

And even when you find honest reporting, there's always empty optimism to keep the reader from wanting to go hari-kari (also known as seppuku), or even Worse-- to stop reading/watching and stop looking at the ads.

So anyways, just curious-- how did the US consumer fare in December?

Well, Bloomberg today said:


Consumer Comfort Highest in Six Months -- "Consumer confidence in the U.S. last week reached the highest level since July as the improving job market helped allay pessimism... Less unemployment and growing payrolls may be lifting consumers' moods, providing the spark for increases in consumer spending"

Yayyy!  Whooo-Hoo!!   Let's celebrate and Shop n' Spend!!

Hmm, wait.. What did CNN/Money report today?


Shoppers Pulled Back At Holidays -- "Consumers pulled back on their spending in December despite the holiday shopping season... The Commerce Department report showed that overall retail sales rose only 0.1% compared to November...  stagnant wages are not keeping up with prices overall, and rising credit card balances, (so) there's a limit in how much consumers will be able to spend"

Jeepers!  What to believe?  Who to trust?

Hmm, OK Reuters-- tell me what or who to believe...

Retail sales weak, jobless claims up last week -- " Retail sales rose at the weakest pace in seven months in December and first-time claims for jobless benefits moved higher last week, signs the economic recovery remains shaky"

That seems abnormally honest and completely destroys Bloomberg's arguments.

OK now I am seriously bummed out.  Certainly there has to be a pollyanna nugget somewhere? I do so much hate reading depressing things...  Just ruins my bridge game

"Within the retail report, the upward revision for November sales suggests consumers frontloaded their holiday shopping as retailers discounted heavily and extended store hours in the days following Thanksgiving." - Reuters

Whewww..  OK, good.  So THAT'S why December retail sales were so poor-- everyone spent all their money in November.  I was beginning to fear it was because the nation was entering year 4 of a depression with no end...

Now I can relax... and go shopping...