ECONOMY REALITY

The Dow is now 11,700. Gee, Mr Gene was wrong....

Or NOT

Maybe a word to the wise...

That is how we are "fixing" the economy. It turns out you may not be able to get blood from a stone but we sure can bleed US and global consumers dry through commodity speculation that completely ignores the fundamentals of supply and demand in order to dig into consumers’ pockets and pull out that last dollar. This is a mainstay of the "Dooh Nibor Economy" and is, of course, great for us top 10% club members as we already know the bottom 90% are tapped out.

By getting that extra $20 for gas each week from 165M drivers, WE make sure that $3.3Bn goes to people who will actually spend it on stuff - further boosting the GDP. Add another $5Bn in mandatory grocery spending (becaues EVERYONE needs to eat - muhaha) and we’re getting $431Bn from those poor cheapskates, who would only save it or pay off some debt if left to their own devices (and we don’t need them to pay off their loans - that’s the government’s job!).

So maybe DB is onto something -- sure, "the people" lost another 444,000 jobs last week and sure, Retail Sales actually declined 0.2% in December (yes, not at all what the MSM was telling us to rally the markets all month), but, if not for fuel prices leading 2.6% inflation - sales could have been off 3% and THAT would have looked bad! We’ll get our CPI report tomorrow and, again, inflation is what the "little people" worry about as it’s our assets that inflate in value and only those without assets (or jobs) worry about rising prices. This is exactly what we expected would happen in December, when I gave my 2010 outlook in "A Tale of Two Economies."

The rich get richer and that’s GOOD for the markets, as the poor people weren’t going to be buying IPhones or shopping at Tiffany's (TIF) anyway and we can continue charging them ridiculously high prices for commodities because clearly Obama and Congress have their collective heads up their asses (as evidenced by the toothless Congressional hearings going on this week) and tomorrow JPMorgan (JPM) is likely to stun us with about $2.5Bn in quarterly earnings, about triple what they made last year. Ah, it’s good to be the king!

So don’t let poor Retail Sales or massive jobs losses fool you - we’re going to party like it’s 1999 - or 1929...