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Economy Title: Bombs Going Off One Level Down Its been a strange couple of weeks. US stocks are not far from all-time records, both nominally and adjusted for inflation. Home prices are soaring up 33% y-o-y in the Bay Area, to take just one of many possible examples. A casual observer might assume that things are going great. But one level down on the headline ladder its a very different story. The list of ominous events and trends has suddenly grown a lot longer. Among the bombs that went off last week: Detroit declares bankruptcy Corporate revenue growth stalls Portugal and Spain descend into chaos Spains leaders, meanwhile, seem to have reacted to the economic crisis by trying to steal as much as possible while they could get away with it. Apparently they went to the well a few too many times and now the resulting scandal has reached all the way to the top. With much of the existing government implicated but still in power its not clear who will be left to do whatever it is that should be done about the economy. See Spain: scandals, lies, graft, and kickbacks Theres more, including massive, insanely ill-timed layoffs in Greece and the IMF calling Chinas policies unsustainable. But all of it points to slowing and maybe negative growth in the US in the coming year, which would make stock and real estate bubbles seem, in retrospect, a bit out of place.
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