Mickey Mouse Economy

The New York Times is apparently expecting Americans to accept "hard times" - as "the new normal." Expect 3 to 5 more years of crisis!

Distracted by the economic turmoil, the Gulf Oil Spill, renewed racial tensions, Charlie Rangel dancing etc., hardly any attention has been paid to a federal "land grab" - until now - thanks to Michelle Malkin, Americans are being schooled!

Last week Jochen Wermuth, the Chief Investment Officer (CIO) and managing partner at Wermuth Asset Management, told CNBC that "America today looks like Russia in 1998. Consumers, companies and the government are all highly indebted. America as a result is a bankrupt Mickey Mouse economy."

WHERE WE STAND ::: Wall Street is scaling back its generally bullish outlook on stocks and the economy for the rest of the year, reflecting continued consumer weakness and investor skittishness.

The tone in the stock market has become decidedly more negative, now that the earnings season is winding down and economic worries are rising. The Fed's actions in the past week heightened market expectations for a double dip recession, a concern that was fading not too long ago. Street experts believe there is currently a 10% chance we're in a 'double-dip' recession.

As stocks sank in the past week, the dollar shot higher and bond yields continued to wither. The Dow was down 3.3 percent for the week to 10,303, while the S&P 500 lost 3.8 percent to 1079, just above an important support level.

The dollar index had its biggest move in almost two years, gaining 3.2 percent for the week. Against the euro, the dollar gained 4.2 percent to a level of $1.2753, and it was up 1 percent against the yen, after hitting a 15-year low against the currency earlier in the week. The yen was up sharply against the euro and sterling. ~ cnbc.com

Washington is preparing to rebuild the national mortgage market atop the ruins of Fannie Mae and Freddie MAc. The proposal, due early next year from the Obama administration, could make it harder to buy a home by reducing available credit or requiring bigger down payments.

Bankcard carriers (like me - I rarely carry ca$h!) have been bombarded the last several weeks with the news that new rules for overdraft fees take effect Sunday, August 15th, and banks have been scrambling to encourage customers to opt in to overdraft protection. The banks have sent letters via postal mail touting the benefits of overdraft protection and asking customers to opt in. But is it really a good idea?Talk about writing a blank check!Tags: Mickey Mouse economy, CNBC, global economy, american recession, Jochen Wermuth, Wermuth Asset Management