This is what makes the the markets so interesting. You never know where the next signal is coming from. First, let’s understand what the phrase “Canary in the coal mine” means. Early mines didn’t have any form of a ventilation system, so the miners would send a into the mine ahead of everyone else. Canaries are sensitive to methane and carbon monoxide. As long as the canary kept singing, the miners knew there was an air supply and it was safe. A dead signalled an immediate evacuation.
Can 60 minutes be the canary we have been looking for? A few weeks ago, Fed Chairman Ben Bernanke appeared on the show for the second time in two years. In early 2009, he said we were printing money to avoid a real terrible crisis, and it was needed to save the system. This time he said we were not printing money. Since they’re doing the same thing as before, it seems reasonable that within one of he appearances, he made an error…. Why was the Chairman of the Federal Reserve on TV if everything in the economy is moving forward as they keep telling us. Even the new bill with the extension of tax cuts is going to create jobs, so they say. Not sure why keeping most everything the same would create jobs, but so be it.
Anyway, now the same program (60 minutes) ran a segment this week outlining the municipal bond crisis that seems to be upon us. (It’s the same municipal bond crisis we’ve been telling you about for months)
It seems very similar to the time just before Bear Stearns collapsed and everyone was saying “all is well.” Today the financial pundits had several reasons why the folks from 60 minutes were wrong and they were right. They want us to believe there can’t possibly be a collapse of municipal bonds because the Federal Government tells us the economy is picking up and even if its not, they will be there to bail the states and local governments out of a jam.
Now I feel better.
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