Bush Stumbles Bernacke Mumbles and Aqua Dots Crumble

Bush Stumbles Bernacke Mumbles and Aqua Dots Crumble
By David Glenn Cox

This week has been a wild ride on Wall Street. On Wednesday, Wall Street struggled with bad news, lots of bad news. GM lost 39 Billion dollars in the third quarter and the Chinese economics minister in a prepared speech before the peoples party Congress stated that the Chinese would seek strong currencies over weaker ones to invest in. The announcement pushed an already slumping dollar into a free falling dollar. As the price of a barrel of oil pushed toward $100.00 mark.

It was such a bad on the trading floor, the traders pushed in with sell orders like Frat boys when the last keg was running dry. But by two o’clock things had begun to calm down the market was down 230 points but had stabilized. Then the President emerged from the White House with French President Sarkosy in tow. I’m not sure what his message was supposed to be because it became so garbled that it’s intent was lost. The President started out by talking about oil markets but switched gears to talking about Iran. Was he trying to calm the markets? Or frighten Iran because he didn’t do either.

No sooner had the President grown quiet than the market fell apart, down another 130 points in two hours. Thursday, Fed Chairman Ben Bernacke spoke before the house finance committee, reading from a prepared text he explained about growth and exports and all the good news. But there was nervousness to his voice like he was reading from someone else’s book report. The Congresspersons were for the most part polite but one by one began to peck holes in Bernackes rosy scenario. But Bernacke kept his feet in the stirrups until it was Ron Paul’s turn, Paul lambasted the rosy picture lecturing the Chairman about inflation and retirees on fixed incomes and the fallacy of government employment and inflation statistics.

According to CNBC’s Chicago anchor Rick Santelli, “The traders were cheering in the trading pits while Paul spoke. But on the whole the media ignored Paul’s berating of Bernacke. Just like they missed the connection between Bush speaking and the markets tanking.

Or maybe was it Sarkosy? In 2003 Republicans launched the anti the French campaign changing the congressional dining room menu from French fries to freedom fries. Those on the left thought it should have just been shortened to dumb fries. But it illustrates the schizophrenic nature of Franco/ American relations I didn’t like the mal treatment of the French in 2003 but I like their lap dog Sarkosy even less. It makes me want to go to France and ride on horseback through the countryside yelling, “You’ve put a moron in charge! And he’s talking to our moron! And they’re agreeing to stuff!” Like a can of Franco/American spaghetti it doesn’t matter what’s on the outside of can you’re not going to like the inside very much.

Funny isn’t it? What the media sees and what they miss, the President trying to calm the markets instead makes it worse. The Fed Chairman goes to Congress to calm the markets and makes it worse. Thursday the markets declined again, the dollar declined yet again. The same store retail sales report was called the worst in twelve years. Or as Congressman Paul pointed out, this administration’s record on job creation is the worst since the great depression.

But the media serves it up piecemeal one piece of bad news two pieces of good news. Years ago, I heard a story about a farmer famous for his bad temper. He went out of town on vacation and would call home for reports and his hired hands feared giving him any bad news. So one day he called home and the foreman says, “I’ve got some bad news for you!”

“Tell me! What is it?”

“Well,” he answered slowly “Your dog died.”

“What happened?” he demanded, “How did he die?”

“The vet said it was smoke inhalation.”

“How could he get smoke inhalation?”

“Well he was in the barn when it caught fire”

“The barn caught fire! How the hell did the barn catch fire!”

“The fire department said it was sparks from the house,”

“Sparks from the house! How did the house catch fire!

“The fireman said the undertaker put the candles around the casket too close to the drapes.”

“Casket! Whose casket?”

“Your mothers.”

“How did she die?”

“Well they’re not sure? Either she had a heart attack first and told your dad he wasn’t really your father and he became enraged and shot her or she told him he wasn’t your father and she had the heart attack when she realized he was going to shoot her.”

“Why doesn’t somebody ask him?”

“Well, the police want to do just that but they can’t find him. The banker said he came in and emptied all your accounts and hasn’t been seen since, where do you want me to bury the dog?”

The hired hand was just trying to spin the story to give him the bad news piece by piece. The media has done the same with the Aqua Dots story, I had first read the story in an overseas publication about three children in non-responsive comas! In the American press it was three children who were hospitalized. I was hospitalized once as a child for falling off my bicycle but I wasn’t even in the same wing of the hospital as the children in non-responsive comas.

We aren’t talking about wood burning sets were a child could burn himself or chemistry sets that could ruin the carpet or smell up the basement. But little pellets that if taken internally can be lethal. In our hysterical war on drugs we demand harsh penalties for those who would sell our children poison. But it’s different for toy makers, it’s a shame, how could they expect that children would put colored pellets half the size of M&Ms in their mouths or that the children might drop them on the floor where toddlers might find them.

Now we play that great old game called the blame game, the Canadian Company will blame the Chinese manufacturer. Does that strategy allow drug pushers to walk away, to say it was their supplier’s fault? They didn’t know that the heroin was that strong. The Chinese have an old saying, The emperor’s power ends at the palace gates and they’re right. They had a contract to produce a product at a given price for a customer half way around the world. Caveat Emptor, they are just being good capitalists all that matters is cost, safety concerns are for liberals and bleeding hearts.

Besides, the producers of Aqua Dots are no different from our national media, to sell you a product even if it could kill you. To hide the facts with euphemisms to call non-responsive comas (Hospitalized) and to report Bernacke’s testimony as reassuring. And to ignore any evidence to the contrary.

But Wall Street knows, the commodities traders in Chicago know. This isn’t another annoying lifeboat drill this is every man for himself. Some will get in the lifeboats and some are going to get wet
And Thursday’s late rally in the financials was about walking causally to the nearest boat. The dominoes are falling the declines accelerating and today’s Friday, would you want to wait for Monday?