Eye of the hurricane

We are in the eye of the hurricane.

"the eye is characterized by light winds and clear skies, surrounded on all sides by a towering, symmetric eyewall."

The seas (economic data) are still choppy (mixed), because we have cross-currents coming from all directions (sovereign systemic risk concerns, stimulus withdrawal effects, state/local crisis, 2nd wave of mortgage defaults, high unemployment, China bubbling, commercial real estate teetering, Japan a mess).

This should be a time of preparation for the backend of the hurricane (more wind and rain). The consumer will continue to deleverage, while the govt will continue to bail. Should confidence in the govts ability to bail erode, then the system is at greater risk. It is going to be touch and go this time around, but if we do avoid another meltdown, then we have only deferred it for another day.