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    • Tue Jan 8th 08:30 AM | Rating: 0 0
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      U.S. Markets in Early Recession Mode; Japan Already Discounting One
      The solvency versus liquidity argument is so critical that some people must be afraid to talk about it for some reason. All the rate cuts in the world will not do a thing to head off massive mortgage and credit card defaults; all of the liquidity options executed by the Fed are being used by financial institutions to build a cash position, not to lend money responsibly to create economic growth. Back in August the ECB in one day injected 267b Euros (then $300b US) into the banking system. If my memory of the US code is correct, this would be an amount of money equal to the US circulating cash supply as prescribed by Congress being dumped into the market in one day; almost beyond comprehension in this context. Maybe this is why Trichet hasn't done rate cuts? August may also be what can be called the starting point of the recession. Why? The government's own jobs report, which grossly distorts private sector job growth by adding health and education to private sector jobs when these jobs are either on public payrolls and/or paid for by tax dollars. The truth is as follows, in thousands: June, 0; July, 59; August, -32; Sept., 16; Oct., 61; Nov., 58; Dec. -57. October and November were also revised downward. This is an average of 15k private sector jobs created per month.
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