Petraeus Goes Out On A Limb

General David Petraeus, the top American commander in Iraq, conceded in an open letter to the troops today that the Iraq War is 'exceedingly complex'.

In other news, leading oceanographers have reported that the ocean is, in their words, 'extremely wet'.

Meanwhile, Back in the Real World...

The titans of finance shriek 'rate cuts - we need rate cuts to save the economy fast!' Stories of a collapsing housing market spread and there are worries that the contagion will affect other parts of the economy.

What is this, the flu?

In reality, the vast majority of homeowners are not going to lose their homes, even the ones who got ARMs. And in the broader economy:

• Worker productivity April - June rose at the fastest rate in two years, easing inflation worries,
• Unemployment claims fell last week for the first time in seven weeks,
• American exporters report record growth in sales due to a more competitive exchange rate,
• Retail sales in August surged with the back to school push.

Don't believe the hype. The economy is healthy and the sub-prime mortgage loan collapse was a necessary correction. This is one disease that mainly affects financiers and hedge-fund gabillionaires.

A plague on both their houses!