Green Shoots and Ham

In "California Continues to Implode," Mish analyzes the budget disaster that is California. General Fund revenues for April 2009 were -39% compared to 2008. Sales taxes were down -50.9% from last April.

The bank stress tests have gone well. If we want zombie banks, that is. Bernanke's stress test contained a little publicized calculation that the banks actually needed $599 billion, or 688% more than the $76 billion reported. It all depends on how bad things get.

California shows us that things are very bad. And these are recent numbers, from last month. As far as the stock market goes, I'm thinking the banks have enough liquidity to manipulate the shorts and run it up. But I don't see how this helps main street.

The Obama administration is just playing politics. They have decided to keep the zombie banks alive, they have picked out the UAW union for special treatment, and they've upped the budget deficit to about 14% of GDP. This is not good.

Instead of fighting the market, I'm going to have to come up with anti-dollar plays. I already have gold, but it oil stays over $50, Seadrill is cheap here. Maybe oil is cheap here. I also have to think about shorting some Treasury bonds. Bernanke's going to have to buy more.