Oil traded at $67 yesterday. Gold rose to $954 and bond yields on the 10-year T-note rose to 3.7%.
All of this sounds vaguely inflationary…and vaguely bullish. Besides, Goldman stock is rising. And as we all know, what’s good for Goldman is good for the country.
Wait…we’re kidding…right?
Yes, we are kidding. What’s good for Goldman is generally bad for the country. Goldman makes money by separating investors from their money. Nothing wrong with that; someone has to do it. But the big banks are most profitable when speculation is rampant and debt is growing. That is, when people are going further and further into debt…and speculating on rising asset prices. We know you don’t really prosper by borrowing and gambling. But that doesn’t make casinos unpopular, or lenders unlawful. Bankers, like undertakers, benefit from human frailty. At least, they benefit as long as the government bails them out. Otherwise, they fall victim to their own human frailty.
But this is a minority opinion. Most economists disagree with us. And there are so many of them…if all the economists who disagreed with us were laid end-to-end…it would be a good thing. They believe that the economy is stabilizing…and on its way back to normal. Trouble is, ‘normal’ ain’t what it used to be.
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