Another Bleak Friday

What's new? The market dropped 300 points and change on the news of a 3% drop in October consumer spending. As some Fox talking head put it, "the largest drop ever seen." Meanwhile, Henry Paulson explains why the absolutely necessary, non-negotiable, finger in the dyke against the coming apocalypse, 700 Billion Dollar plan to buy "toxic assets" had to be, er, abandoned in favor of alternate strategies. Here's a chilling quote:

"By the time the process with Congress was completed, it was clear that we were facing a much more severe situation than we had envisioned earlier on"

A more severe situation?

I recall reading reports (can't find any links at the moment) that Paulson scared the hell out of Congress and the President vis-a-vis the necessity of the TARP on September 15. And now its worse?

Oy vey.

Incidentally, the two reports listed above have a connection (beyond the obvious) in my view. On September 15, Paulson tells Congress that the world is about to go to hell. The news reports were of a kind and tone that I'd never heard before. In October consumer spending drops. Are these two events, perhaps, related?

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Let's see how oil did today. Dropped a couple of percent to 57.04. Wonderful. Opec may cut production again. Most money says it really won't matter much.

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On the other hand ... I don't know what a depression looks like "on the street" but judging by traffic, crowds and so forth, my little neck of the woods doesn't seem ... depressed. The drop in oil and, more importantly from my viewpoint, natural gas doesn't seem to have shut off business around here. However, 2008 acquisition budgets are being put together right now. That can't be good.

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Are we being talked into something really bad (as opposed to something "merely" bad)? Right now, everyone I know is, more or less, scared shitless. Everyone I know is, at the same time, fine for the moment. Given the economy's dependence on "sentiment," is it a good idea for every media outlet to fan the flames? There's a disjunction here. Talking about someone else's apocalypse over a pint of beer is good fun. Living your own aint. I predict that this, whatever it is, will end at the moment the electronic media begins to believe that they are about to be tossed out of their homes. Then it will be "This is America! We can do anything."

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I'm not suggesting that this is all hype. But, almost by definition, part of it is. I hope it's a large part.