Well, I'm glad I got out of debt, but I'm also glad I didn't do it early enough to sink any money into "the market." While I'm sure many funds will still do well and long-term investors have little to fear, the current economic trajectory is pretty ugly. The dow is headed towards 52-week lows, and there's more bad news to come.

This is what happens when you run things like the Soviets. It's increasingly obvious that our economy, beyond being unsustainably debt-based, is also build on a series of consensual hallucinations that don't map well to reality. Because our made-up-prowess is in "financial products" rather than steel and wheat production, we can get by for longer than they did in the USSR -- and we get hit with mortgage defaults rather than breadlines, which is an improvement -- but the books are no less cooked, and CNBC is a propaganda outlet, not a news channel.

The Big D may indeed be coming, although a new bubble/rally may emerge around alternative energy and infrastructure instead. Here are the fundamentals:

Want to know a sign that the Big D is on the way? Watch the money:

bq. Canada's dollar traded almost equal to the U.S. currency for a second day amid optimism economic growth will be fueled by surging demand for the commodities... The currency rose above $1 yesterday for the first time since November 1976.

Currently it's a $0.999. Meanwhile, as atrios has noted, the Euro is closing in on a buck fiddy. Fed Chairman Bernake says the worst has yet to come:

bq. Losses from sub-prime mortgages have far exceeded "even the most pessimistic estimates", US Federal Reserve chairman Ben Bernanke has said.

And then (via Franz) there's this:

bq. Saudi Arabia has refused to cut interest rates in lockstep with the US Federal Reserve for the first time, signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.

I've been following all this in my own nerdy way, and it looks like most of the bullish pushback against claims of instability are evaporating. Our debt-based economy can't roll on much longer as currently configured.

The upside for me is that I work in an international market on a product that has a very strong European base, so all of a sudden I'm cheap labor to those people. Heck, I may be cheap labor to those socialists up in Canada soon.

2% of all adults control 50% of the world's wealth, a UN study that looks beyond just income an rather at assets minus debts has concluded.

This is important, because it shows just how stagnant economic life is for so many people. For instance, even though we live well by global standards, many Americans have more debts than assets, and are among the most wealth-poor people in the world. Folks in this situation, like me, have a sharply limited range of options.

I'm virtually certain that I'll fight my way out of that. I'm in the 99th percentile in standardized aptitude, a white male with career prospects. I also have family and a social network that's rich enough to catch me if the unthinkable should happen. Most others with negative wealth have little beyond the service industry in terms of work, and a much less affluent network to draw on. This is the new serfdom.

Just a note for something I've been meaning to post for a while.

There's lots of news items now about how the Dow is cracking 12,000 and it's a record high, which is true. Many in left blogostan point out that means we're now just coming out of a six year slump (or in the case of the Nasdaq, still trying to claw our way back) which is also true.

Something I've heard very few people remark about is how stock indexes are totally shitty as a lone indicator of how "good" the economy is doing. Basically, it's the corporate equivalent to counting up the value of all your baseball cards.

Why isn't this a terribly good metric? Well, for one, it's a fantasy yardstick, entirely based on perceeved value. For two, it's relation to real wealth (how good folks are doing) only connects at the top end of the income spectrum. High stock values mean good ROI for your investment portfoloio. Oh, you don't have a portfolio? Funny, neither do I.

Which isn't to say that the DOW is meaningless, but as compared to, say, average wages, aggreagate totals of things produced, bought, sold, and mean/median household income, it's not terrifically indicative on how the economy is for American citizens.

This is one of the reasons I'm confused that Democrats don't hit back on the Bush/GOP line that "the economy is thriving." Stocks are up, yeah, but what the fuck does that really mean in terms of the kitchen table economy? Increasingly, not very much.