The numbers are in from the Treasury. A huge debt sale in the amount of $112 billion yesterday, a day that saw only $23 billion in redemptions, basically put the budget into balance for August. (Outlays for August: $943 billion; Receipts for August: $943 billion). A day before we had an $85 billion deficit.
This shows you how deathly afraid the Administration is of the deficit. Politically, they fear this more than 10% or higher unemployment.
Well, the debt sale constitutes a huge reserve drain, so you can bet the Fed is going to be very busy with monetary operations to offset this. They have to maintain their target rate. Expect strong purchases of MBS next week.
And China's unemployment rate went from 4% to 4.3% last quarter of 2008, stands at 4.3% today and appears to have topped out as a result of the stimulus. 14% of their GDP! And everyone is talking like it's the beginning of the end for China just because stocks reversed sharply? China's stimulus was well spent! People have jobs and that's going to "trickle up" to the equity markets in time. Wouldn't it be great to be like them? Let the Corporations sit scared and alone in the cold and the dark waiting for recovery -not people! Last Century the tobacco industry got away with it. How long will it take before we wake up and realize our financial sector is the Phillip Morris of the new millineum?
ReplyDeleteSo true! Where have you been? I missed you!!
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