Stocks Galloped Higher in 1929, Too
As usual, the stock market was vexatiously out of step with reality last week, soaring on word that the ECB plans to do “whatever it takes” to preserve the euro and the political union that it binds. For U.S. investors, especially those who believe in hope and change (and, presumably, the Easter Bunny), there was also the invaluable news that the U.S. economy is once again verging on recession – a development which is widely believed to portend yet more Fed easing. Completing the delusional vision that good times are soon to return nonetheless, crude oil finished the week with a gain of about $4 per barrel. Of course, no one actually believes that so strong a recovery impends as to squeeze current supplies of crude that are more than adequate. Even so, the news media, feigning ignorance of forces that have been pushing the global economy toward an abyss, and abetted by the stock market’s steroid-addled lunge, were only too happy to report events in a way that did not challenge officialdom’s cynically crafted, positive spin. The Establishment’s most useful memes were dutifully trumpeted by The Wall Street Journal in two headlines that ran above the fold on Friday: Weak Economy Heads Lower, said the topmost, in a heavy font; and, immediately below it, in italics, the implicitly good news: Markets Jump as European Leaders Vow to Protect Euro; Flagging U.S. Recovery Could Spur Fed.