Friday, June 10, 2005

As Flies To Wanton Boys, Are We To The Gods (Pop Music Lyrics Edition)

"Lord, if you won't take care of us,
Won't you please please let us be?"
--Randy Newman, God's Song

voodoo The Oracle of Nuthin' Much speaks:
"Over the past year, the pace of economic activity in the United States has alternately paused and quickened. The most recent data support the view that the soft readings on the economy observed in the early spring were not presaging a more-serious slowdown in the pace of activity. Consumer spending firmed again, and indicators of business investment became somewhat more upbeat. Nonetheless, policymakers confront many of the same imbalances and uncertainties that were apparent a year ago."
That's life, that's what all the people say.
You're riding high in April,
Shot down in May
But I know I'm gonna change that tune,
When I'm back on top, back on top in June.

--Frank Sinatra, That's Life

Or, for those of us less poetically inclined, who knows what tomorrow may bring? Not the Geezer-in-Residence, though you'd never know it by the genuflections the press makes in his direction every time he shows his face in a quasi-official capacity and babbles some incomprehensibly contradictory bushwa. He goes on to assure us, as he has more recently, that while a housing bubble is unlooked for, a bit of froth on the old cappucino can probably be expected. Or maybe not. In fact, who really knows? Not him--his job is to sit back and inhale the incense from the offerings we light to him every time the market gets a little jittery. So, what other pearls of cluelessness does the Oracle grace us with?
"Excluding a large but apparently transitory surge in bonuses and the proceeds of stock option exercises late last year, overall hourly labor compensation has exhibited few signs of acceleration. Thus, the rise in underlying unit labor costs has been mainly the result of the slower growth of output per hour. At the same time, evidence of increased pricing power can be gleaned from the profit margins of nonfinancial businesses, which have continued to press higher even outside the energy sector. Whether that rise in unit costs will feed into the core price level or will be absorbed by a fall in profit margins remains an open question."
You'd never know that these were human beings whose lives he so blithely stuffs into such bloodless econ-numbnuts babble. In other words, excluding some fat cats' golden parachutes, wages didn't go up, and where the cost of employing the peons rose, it wasn't because they were paid more, but because the lazy slobs slacked off. After squeezing the working man and woman out of a raise, and hiking retail and wholesale costs to consumers, it's still a crapshoot as to whether it will all even out or whether business will come out on top. And he gets paid for this. But let's turn our attention to that perennial favorite, the housing market:
"It appears that a substantial part of the acceleration in turnover reflects the purchase of second homes--either for investment or vacation purposes. Transactions in second homes, of course, are not restrained by the same forces that restrict the purchases or sales of primary residences--an individual can sell without having to move. This suggests that speculative activity may have had a greater role in generating the recent price increases than it has customarily had in the past.
The apparent froth in housing markets may have spilled over into mortgage markets. The dramatic increase in the prevalence of interest-only loans, as well as the introduction of other relatively exotic forms of adjustable-rate mortgages, are developments of particular concern. To be sure, these financing vehicles have their appropriate uses. But to the extent that some households may be employing these instruments to purchase a home that would otherwise be unaffordable, their use is beginning to add to the pressures in the marketplace."
People are speculating on houses, and artificially raising purchase prices. They can't afford them. Who knows what may happen if they have to sell and can't get back what they invested? Long-term interest rates have stayed low though he keeps raising short-terms. Lawdy, me, whatever could be the matter? He later slips the possiblility of large-scale bankruptcies in there and then glides right past it as if someone broke wind at the luncheon and the only polite thing to do is to pretend you didn't hear it. He ends with this cryptic statement:
"...despite some of the risks that I have highlighted, the U.S. economy seems to be on a reasonably firm footing, and underlying inflation remains contained...Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability."
Yes, I'm so fucking reassured...watching the price of ticky-tacky cheeseboxes spiral sky-high while dime-a-dozen 3rd tier lawyers and marketing managers cream themselves over their latest acquisitions of preening McMansions and Jurassic SUVs. Meanwhile, this dementia victim is still selling the mythology of the Bush economy.

Please, God, send a miracle. Or lacking that, at least someone who isn't nearly brain-dead.

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