Interestinger and Interestinger

After 30 years of watching the global economy, the numbers that came across in the 4th quarter 08 and the first quarter 09 were unprecedented. I described them simply as "impressive." They represented a fundamental shift. If anything, it seemed the past would not be a very good map for the future. The US government's response to the situation has been both unprecedented and impressive, but it has unfortunately followed the same map that got us here. Various economic numbers continue to come in that are very "impressive,"-- off the map -- nonetheless, we're told the map is fine, we just need to continue further down the same path.

In the last couple days, the path has taken some new turns. The rate on three-month Treasuries has turned negative, meaning people are paying for the security of Treasury bills, raising questions about the global equity rally. Another interesting development is the Treasury announced it is selling the bank stock warrants it's held from their TARP program. Why not hold for when the banks stock rise even higher? While the president of the St. Louis Fed stated the Fed will not raise interest rates until 2012, which doesn't bode well for unemployment. Meanwhile, the Japanese confirmed they are once again gripped in deflation, while on our east-side the NYT speculates the Brits are in for a lost decade.

The financial and DC establishment are becoming increasingly nervous. David Brooks job at the NYT is to remind the political class not to take their political theater too seriously. They are in fact importantly united in preserving the status quo. So, as Mr. Geithner's position becomes more precarious, it is no surprise Mr. Brooks issues a full throated endorsement of Mr. Geithner.

At some point, it would seem we must embark on a new path.