More from the department of “you-can’t-make-this-stuff-up.” Bloomberg’s headline this morning is “Obama eyes risk of new bubble undermining broad recovery,” associated article here.

President Barack Obama, who took office amid the collapse of the last financial bubble, wants to make sure his economic recovery doesn’t generate the next one.

“Generate,” he says, as we are in the largest credit bubble in history – probably in the process of bursting. A little too late, Obama-san. “His economic recovery” he says, as the economy has sunk back into recession.

It’s clear that the gap between the political and Wall Street economic propaganda and reality has never, ever, been wider.

Turning and turning in the widening gyre
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.
The Second Coming! Hardly are those words out
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert
A shape with lion body and the head of a man,
A gaze blank and pitiless as the sun,
Is moving its slow thighs, while all about it
Reel shadows of the indignant desert birds.
The darkness drops again; but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?

— William Butler Yeats, The Second Coming

The only question from here is which is juicier – short stocks or long bonds? Bonds are in for a smaller percentage move, but the options are much cheaper. Tough call.

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