WHY would it be dropping when the FED and Treasury are pumping Billions into the money supply via the banks?
1) The banks are still hording these bailout funds rather than loaning it. They are still hiding some many bad assets (hard to value) such as Credit Default Swaps for which they will need more reserves once their junk value is revealed.
2) Some of the bailout funds are being used to pay execs bonuses instead of going to boost economic activity. More trickle down economics. What's changed?
3) Congress and Paulson promised transparency in the use and accounting for the use of the bailout TARP resque funds. Now their is no transparency or accountability or audit trail. In fact, Bloomberg is suing the govt for this information. Congress seems to be sitting on their hands again! Write Obama now!
4) Here are the best two leading indicators of where we are going inspite of all the money, our money, being thrown around.
Money Supply M3
Baltic Dry index
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