I'm Shocked To Find Extreme Recession Going On In This Economy

Bloomberg reports the economy is worse than previously thought and, indeed, the worst since the Great Depression. Wow, I am simply shocked. Not shocked at the news but shocked that this is just now coming out. Anyone who can fog a mirror should know this already. The fact that official stats are just catching up is what is shocking.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a5_5Vq2hV3EQ

So why is the market at a point where the P/E on the S&P is 24? You tell me.

And Another One (or Five) Down

Five more banks down for the count. That makes 69 (no jokes please) this year. That is more than in all the years the last decade combined. It does not compare to the S&L crisis in terms of number of institutions but comparisons in terms of $ are becoming significant. What's a few billion here or there after the trillions in support we have just had?

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3KVKk_i5_cM

Cash For Clunkers

Okay, I cleaned out my 1995 Ford Explorer with 171,000 miles on it last weekend and accidentally threw away the registration. While I am in the process of replacing it, so I can do the cash for clunkers deal, the deal is stopped. There are rumors it will resume and have more money, which I hope happens - for personal reasons. While I acknowledging my personal desire to take advantage of it, I must say I am disgusted that we have back stopped AIG for many tens of billions that could have been spent on this worthwhile program that reduces gas consumption and pollution while helping car companies. This is simply disgustipating that we have spent our money where we spent it. By the way, billions of the AIG money flowed directly to Goldman Sachs on CDS obligations (Paulson's company) and they are giving out good bonuses with our money. Like I said - disgustipating.

Disclosures: I have a clunker.

Take Notice - This is Big

Naked Plug!!

Yves has provided me with plenty of material over the past few months and Naked Capitalism is one of my favorite sites, so when Yves' book "Econned" (I like the title) comes out, I will be at the front of the line.

http://www.nakedcapitalism.com/2009/07/book-countdown-3210.html

The Most Important Thing You Will Read This Year

I would like to take credit for this - or have done it myself - but here is a very, very informative piece from Zero Hedge on why any recovery for us, as in U.S., is - well - not happening any time soon. This whole piece is well worth the read. Seriously, this is not fluff, it is full of data. I like data; it is much better than "indicators." Indicators are flawed and expecting the stock market to predict a recovery is as reliable as expecting it to warn you of our last bubble - that worked out really well, didn't it.

http://www.zerohedge.com/sites/default/files/The%20End%20Of%20The%20End%20Of%20The%20Recession.pdf

The authors are inviting anyone and everyone to quote from them as long as we give them credit, so here are some of the fun parts:

• Consumer spending, 70% of the economy;
• Former IMF Chief Economist Ken Rogoff: “The kind of deleveraging we need to see takes six or eight years … The retrenching of the U.S.
  consumer is a huge adjustment the whole world is going to have to
  absorb”.
• Ratio of U.S. licensed vehicles to ownership is still trough the roof despite a significant drop-off in sales;
• Household debt still near record highs;
• Business sales down 18% YOY, a record decline;

And that folks is just from the first 16 pages of a 72 page presentation. I was on the edge of my seat the entire time. I could add more here but it is a pretty quick read - bullet points and graphs - so I implore you to go and read it. You have to decide what you will do with these tea leaves. I know what I am doing.

Disclosures: None.