The markets took off higher overnight as Vladimir Putin indicated he was not interested in invading the Ukraine, but has moved to protect Russia’s interest in the Crimea, which is their traditional naval base on the Black Sea.
I will not get into the response from Republicans like John McCain, since much of what they say is just partisan theater, politics as usual,  but let it suffice to say that it is a relief that the neo-cons are out of power and out of favor. One can forget how truly misguided they are.  I don’t think they realize how the nation’s attitude towards their discretionary wars has changed over the past thirteen years of continuous war.Â
So what next. Despite the euphoria on Wall Street, the economic signs are still weak. I was reading the Fed’s Mission Accomplished article by Tim Duy about those in the Fed who are urging higher interest rates now because of the ‘tight labor market’ and wonder to myself, ‘what are they thinking?’Â
It is a tight labor market, if you are applying for a part time job flipping burgers or stacking shelves, but the recovery is tightly constrained to those economic sectors which have financialized the real economy, largely to the detriment of the greater public.
This is not to say that blowing a stock market bubble to cure the housing bubble that was created to offset the tech bubble is a good idea, but the Fed is celebrating The Recovery™ very prematurely, judging by the slack economic demand, continuing stagnation in real disposable income, and high economic uncertainty and insecurity enjoyed by most Americans.
Have a pleasant evening.
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