It's finally time to paint or get off the ladder. The markets are sending eerie signals that they're out of whack vis a vis the past program of attempts to rob Peter to pay Paul. Witness the US stocks at 1105 a 20 day high in conjunction with bonds at 13000 a 20 day low. Something has to give. Or as Osborne would say, someone's going to get tarred, raw squawking and fully feathered, and something tells me it ain't going to be bonds. Finally the bond vigilantes are doing their job. The 10 and 30 year back to back auctions are about the worst in history. Finally, everyone who bought it didn't make an immediate profit. Indeed a 1 percentage point loss.

Finally, the whirlwind of spending money to weather proof buildings and create naming rites on highways for the program's reinvestment activities is meeting resistance. The idea that the money taken from the ordinary man who would have spent it on productive and useful thing, and given to organized labor and earmarks is meeting some resistance.

This backdrop is playing out against some shocking declines pointed out by Aubrey's rowing mentor in the payroll numbers. How will they be able to hold back the floodgates for two more announced numbers on the employment front?

If the bond vigilantes don't capitulate immediately as has been their wont in the past, one would predict some post employment depression in the stocks.

Alston Mabry writes:

Preseason is over. Regular season begins on Monday. Barring injuries, the first string will start every game and play most of the minutes. Offense will be more innovative, but defense quicker and tougher. The game will be played with more seriousness, more at stake.

Victor Niederhoffer writes:

the expression in mind is "someone's going to eat crow, raw squawking and fully feathered….

Gary Rogan adds:

In an interesting metaphor-to-reality twist this post was the first thing I read after I finished painting and got off the ladder. More substantively, I would like to hear from anyone who has an opinion as to what the bond vigilantes could have seen last week that they didn't see six month ago, a year ago, or a year and a half ago. Has not the course of what actually transpired been obvious since the plans were first announced? Are they finally seeing signs of inflation? Are they collectively playing a game of chicken where nobody moves until they believe everybody else is about to move? If so, will their actions now be quick and violent?



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