Bill Bonner, daily commentator and resident voice of reason at The Daily Reckoning, discusses the current economic depression – and why we can’t simply wish it away.

Bill Bonner (The Daily Reckoning, UK):

The ‘recession’ did more damage than they think

Claptrap! Nonsense! Balderdash!

Everywhere we look, someone is saying something ridiculous.

Which is good news to us. This Daily Reckoning was getting to be serious work…what with the world facing a total financial meltdown and all.

So, we’re pleased to be able to lighten up by, once again, telling you what an idiot Tom Friedman is. You already knew that? Well, it doesn’t hurt to repeat it…

We hadn’t seen much of the old Tom recently. His recent editorials in the New York Times were no smarter than before, but a bit subdued…as if some chemical trace of good sense had slipped into his system,

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U.S. stocks advanced on Wednesday after data showed July new home sales rose at their fastest pace in almost a year, while durable goods orders increased, but less than forecast excluding transportation.

Sales of new homes rose for a fourth straight month in July and at their fastest pace since September 2008, while the inventory of unsold homes fell to the lowest level in 16 years, the government reported.

“These are great numbers, and they should definitely add fuel to the move higher in the market,” said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

“It’s all very positive, not just because of the macro implications but because they will drive consumer confidence numbers (higher).”

The Dow Jones industrial average <.DJI> added 19.57 points, or 0.21 percent, to 9,558.86. The Standard & Poor’s 500 Index <.SPX> rose 2.15 points, or 0.21 percent, to 1,030.15. The Nasdaq Composite Index <.IXIC>

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A sharp rebound in Chinese shares helped erase yesterday’s slump and sent Asian stocks sharply higher Thursday, a day after Shanghai’s big fall ignited fears of a Chinese stock collapse and triggered a selling spree around the world.  Asian markets also drew comfort from an overnight recovery on Wall Street after a surprise drop in U.S. crude stockpiles lifted hopes for an economic recovery and sent investors back on the buying table.

Shanghai's main index jumped 126 points, or 4.5%, to 2,911.58, while Japan's Nikkei 225 stock average climbed 179.41 points, or 1.8%, to 10,383.41.  Hong Kong's Hang Seng rose 374.63, or 2%, to 20,336.36.  South Korea’s Kospi advanced 2% to 1,576.39.

Stock futures pointed to a higher open on Wall Street Thursday.  Dow Jones industrial average futures rose 24, or 0.3%, to 9,300. Standard & Poor's 500 index futures edged up 3.70, or 0.4%, to 1,000.80, while Nasdaq

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US markets closed marginally lower Wednesday, capping a four-day rally, as some lackluster economic data kept investors from taking big positions.  Investors appeared to be cautious ahead of the government’s monthly report on job losses and the unemployment report, which comes out on Friday.  Yesterday’s pullback reversed Wall Street’s recent run, which has been spurred by better-than-expected corporate earnings and hopes that the worst of the economic crisis has passed.   

The Dow Jones industrial average declined 39 points, or 0.4%, the Standard & Poor's 500 lost 3 points, or 0.3%, and the tech-heavy Nasdaq composite retreated 18 points, or 0.9% after disappointing data on private payrolls and the services sector dented some optimism.  However, the Commerce Department reported an unexpected 0.4% rise in orders for manufactured goods in June.  On the NYSE, volume was a moderate 1.53 billion as decliners outpaced advancing shares by 8 to 7

Treasuries fell,

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US stocks plunged Tuesday on lingering concerns about the prospects of an economic rebound and worries second-quarter earnings would fail to lift sentiments on the Street.  Although the second quarter began on a high note with stocks surging to multi-month highs, the rally lost steam in mid-June as a slew of bleak economic data failed to provide a direction.  Last week’s shaky unemployment report added to mounting worries and investors pressed the sell button.  Crude prices fell to their lowest in seven weeks.

The Dow Jones industrial average closed at its lowest level since April 28, plunging 161 points, or 1.9%, to close at 8,163.60.  Among DJIA components, only four managed to register gains yesterday.  The S&P 500 index dropped below its 200-day moving average, losing 18 points or 2%, to close at its lowest point since May 1.  The Nasdaq declined 41 points, or 2.3%, to close at

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The weekly survey of Mortgage Applications (see here for details), released today by the Mortgage Bankers Association (MBA), showed that the mortgage applications dropped to a seven-month low for the week ending June 26, 2009. MBA's seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, decreased 18.9% to 444.8, the lowest level since November 21, 2008. The index of refinancing applications decreased 30.0% to 1,482.2, also the lowest since November 21, but was up 16.8% year-over-year. Refinancing accounted for 46.4% of applications, down from 54.0% for the previous week and significantly down from the high of 85.3% for the week ended January 9, 2009. Mortgage rates, which had declined to record lows since the Fed started its massive mortgage-backed securities (MBS) purchase program, have been creeping up ...

There’s been a slew of good news lately, including improved consumer sentiment, lower than expected job losses, increasing wages, and a contracting TED spread.  The stock market has been up for 12 of the past 14 weeks, and the Dow recently broke even for 2009.  Public officials including President Obama and Fed Chairman Bernanke have declared the worst to be over.

Unfortunately we are not yet in the clear.  The yield on the 10-Year Treasury Note increased 60 basis points during the one-month period from May 12 to June 12.  Oil prices rose 23% over the same period.  Keynesian economists argue that interest rates and oil prices are higher due to the expectations of economic recovery.  While the recovery may partially explain the increase in these prices, it doesn’t explain all of it.  The Treasury continues to auction billions of

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[Editor's Note:When the journalistic sleuths at Slate magazine recently set out to identify the stock-market guru who correctly predicted how far U.S. stocks would fall because of the global financial crisis, the respected "e-zine" concluded it was Martin Hutchinson who "called" the market bottom.

That discovery was no surprise to the readers of Money Morning - after all, Hutchinson has made a bevy of such savvy predictions since this publication was launched. Hutchinson warned investors about the evils of credit default swaps six months before the complex derivatives KO'd insurer American International Group Inc. He predicted the record run that gold made last year - back in 2007. Then, last fall - as Slate discovered - Hutchinson "called" the market bottom.

Now investors face an unpredictable stock market that's back-dropped by an uncertain economy. No matter. Hutchinson has developed a strategy that's tailor-made for such a directionless market, and that ...

Have you ever noticed that a day does not go by without the media pointing to a reason why the market traded higher or lower on a particular day? According to the media, there is always a reason for a move higher or lower. When the market moves lower, short  sellers are typically blamed for the downward pressure.  Is such a culpability present, or has the common man’s perspective of short-selling been seriously distorted?

Many talking heads in the media and in charge of regulating the markets are blaming the short sellers for the recent bear market. First of all, short selling is a very good and fair way to trade the market. In order to short a stock the individual or institution must borrow the stock from their broker and sell it. Later the trader must buy back the stock or cover the trade. If the stock is below

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Highlights include Fannie Mae (FNM), Freddie Mac (FRE), General Motors Corp. (GM), Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM).The Obama Plan to help homeowners hold onto their houses by refinancing their mortgages is getting underway today. There are three core elements to the program.  All the details are available at: http://www.treas.gov/press/releases/reports/housing_fact_sheet.pdf.  To understand the program, it is important to conceptually separate homeowners into 4 categories. First are people who own their houses free and clear. This group accounts for 31% of all homeowners, and a somewhat lower total value of all housing -- about 25%. These folks are obviously not in trouble.This leaves about 51 million houses with mortgages on them. The 2nd group is those where the current loan-to-value (LTV) is under 80%. These people have the ability to refinance now, and ...