It seems a little inappropriate, yet rather symbolic, that as millions of Americans continue to struggle with the loss of their jobs and homes, the financial elite are ensconced in a bubble of luxury featuring all the amenities that Jackson Hole, Wyoming has to offer; while, at the same time, the president and his family are enjoying the pleasures of one of the nation’s most exclusive playgrounds – Martha’s Vineyard.

And, as for the members of Congress? Well, let’s face it, they’re not in Washington and we all know that between their salaries and their war chests of “donations” from the special interests, they’ve got plenty of moolah to play with – so you can draw your own conclusions.

At Jackson Hole, Fed Chairman Ben Bernanke told the bankers who weren’t playing golf or relaxing at the spa that the Fed stands ready to “do all that it can,” to prevent a second recession from developing. This followed a government announcement that the nation’s second quarter growth rate had fallen from its preliminary estimate of 2.4% to 1.6%. And that, in turn, had followed an already declining GDP trend featuring a 5% growth rate in the fourth quarter of last year and a 3.7% rate in the first quarter of this year.

But, let’s take a closer look at exactly what Bernanke meant when he said the Fed would “do all that it can.” In his own words, the steps, if they end up being taken, would primarily involve buying more government bonds to bring down long-term rates, and committing to keep short term rates at or near zero for a longer time than the “extended period” that has already been promised.

So, what this all means for Main Street is virtually nothing – nada – zip. It is true that mortgage rates might fall slightly from their present record-low levels, but the now-expired government program to offer tax credits to homebuyers has obviously drained the housing market of any meaningful demand. And as far as providing lower interest rates is concerned, does anyone in their right mind actually believe that the banks would pass along lower charges on installment credit for John Q. Public?

So far, as rates have fallen through the floor for the financial sector, the only pass-through to the public has been an escalation in charges related to installment debt, including credit card obligations.

Indeed, the subject of jobs was hardly mentioned by Bernanke, except for the statement that the Fed’s move to lower rates even further might be triggered by another couple of months of job losses. In other words, if corporate America continues to dump jobs, the Fed will reward it with even lower rates that it can take advantage of to secure long and short term debt.

Not surprisingly, Wall Street reacted to the news out of Jackson Hole with nothing less than euphoria. The Dow surged 160 points on Friday and the futures are looking good, at this time, for Monday morning’s market opening.

Bernanke also said that the Fed couldn’t do the job alone, an obvious reference to the fact that the prior stimulus package has lost its impact and Congress should step forward with its own plan to jump-start a renewed recovery. However, we all know that ship has not only sailed away but that it has been attacked and sunk by the deadlock on Capitol Hill.

Meanwhile, the conventional economic wisdom being echoed by a procession of economists on such relatively neutral stations as Bloomberg News and CNN is now projecting seven to ten more years of high unemployment and slow growth.

So, considering the eerie similarities to the 1930’s, all of this seems to beg the big question: At what point should this become known as the Second Great Depression?

Americans may never fully understand the gap between their culture and that of Islam.

From the official titles of this nation’s military operations, it is clear that the message the wars in Iraq and Afghanistan intend to convey is that the United States is the purveyor of “freedom” to societies that are desperately in need of it.

The reality, however, is that the civil rights record of these countries is not only atrocious – as Americans see it – but that it is not about to change.

This fact was once again revealed by an event that transpired earlier this month in a village in northern Afghanistan. On the day of the incident in question, 28-year-old Abdul Qayuum was standing in a field with the love of his life, 19-year-old Siddiqa. Perhaps they had previously passed idle hours there but, on this particular day, the atmosphere was anything but idle. For, surrounding the couple were hundreds of men who quickly closed in and stoned the lovers to death.

The sentence that was thereby carried out, had been handed down by the mullah, the local male religious leader. The crime they had committed was simply that they had eloped against the wishes of their families.

The fact that hundreds of men participated in the killings in what was a rural locale, suggests that this was not just the result of the Taliban’s influence, as the western media would want us to believe, but, to the contrary, that the murders were carried out by the will of the people.

And, unfortunately, such incidents are not uncommon. A week earlier, a widow in the same general area had been flogged and then shot to death for having a baby out of wedlock with a man she intended to marry.

This week, the Department of Defense released the obituaries of 10 military personnel killed in Afghanistan. Their ages ranged from 19 to 39 but, as usual, the majority of the fallen heroes were 24 or younger. The AFP (Agence France Presse) is reporting that four more American soldiers were killed this morning. U.S. deaths in Afghanistan now total 1,241, according to the website icasualties.org.

Also, in the region, Iran was back in the headlines, this week, as it finally powered up its nuclear reactor at Bushehr, along the coast of the Persian Gulf. The event was actually no big deal. Bushehr features “light-water reactors,” which are the safest from the point of view of proliferation. Furthermore, Russia continues to exercise its supervision over the facility and Washington has, in the past, even shown support for the project.

The facts of the matter, however, didn’t discourage the war-hawks from using the development to promote an atmosphere of unrest in the region. Last week, John R. Bolton, George W. Bush’s ambassador to the United Nations, said that Israel was running out of time to bomb the plant before the fuel cells were loaded. Iran, which expects the plant to be producing electricity by early September, retorted that if such an attack occurs, “we will lose a power plant but Israel’s existence will be in danger.”

Meanwhile, as our military operations in Iraq wind down, the Department of Defense released the obituary of one 24-year-old soldier who was killed in that country when his Stryker vehicle was subjected to a grenade attack. Total deaths in that theater now amount to 4,735 according to icasualties.org.

This is no longer a sputtering recovery. It is an economy in a nosedive with jobs as its centerpiece. The dimensions of the new collapse are exploding the myths that have been spouted by the elitist economists who claim to represent the “conventional wisdom” of the day. Of course, nearly all these particular “experts” either work for the government, a corporation or some industry group, and their affiliations trump their need to tell the truth.

Meanwhile, the Labor Department announced today that 500,000 people filed first-time claims for unemployment last week. Again, that’s just a one-week figure and it’s the highest one since last November.

At the same time, new data show personal bankruptcies surged 34% in the second quarter and foreclosures jumped 8.7%. Housing continues to stagnate and the ripple effect of the problems in that sector are revealed by the results of a new study showing that the real estate crash cost the state of California’s economy $54 billion and resulted in the loss of 410,000 California jobs. Nationally, real estate has typically been the catalyst in every recovery since World War II.

As the forces of deflation have continued to grow ever stronger, the normal means of combating such an economic calamity have dwindled to the point of being practically non-existent.

In an unusual move, the Fed has started purchasing long-term government bonds in an effort to lower rates even further and hopefully provide a stimulus to the economy. However, the effect of such a program is problematic at best and, the truth of the matter is, the Fed has very few weapons left with which to fight a serious double-dip.

And the corporate sector, which can’t seem to see beyond its next earnings report, has shown no interest in creating jobs. It is currently basking in the luxury of historically low interest rates, falling labor costs and the high productivity caused by the surviving workers having to take on the duties of those let go. It is totally beyond its short-term horizon to consider that these are all unsustainable factors or that, at the end of the day, it is the consumer that provides 70% of the nation’s GDP. And consumer confidence is, once again, eroding.

Indeed, corporate America, after hoarding cash, is currently engaged in a virtual orgy of acquisitions and mergers which is having the effect of eliminating even more jobs.

The myopic nature of the stock market was revealed once again this week when it celebrated, albeit briefly, the earnings improvements by Walmart and Home Depot. In both cases, however, the data revealed that the actual revenues had fallen in both cases and that the increased net income was solely the result of unsustainable factors – namely lower costs.

So, if the Fed and the business world cannot provide the solution to our economic tailspin, that leaves the government. Surely, one would think – especially in a election year – that our elected representatives would recognize this as a national emergency and make it their number one priority to legislate incentives for meaningful job creation.

However, the saddest chapter in this tragedy is that the forces of destiny have rendered our political process totally impotent. In a classic case of the truth being stranger than fiction, the election of a totally unknown Republican to take the place of the late Senator Ted Kennedy, has provided the opposition party with just enough seats to stymie virtually every piece of legislation passing through the Senate, except of course, those that happen to fund war. The “party of NO,” which is more than happy to trade the welfare of the nation for a chance to occupy the White House, is the last element in a conglomeration of factors that spell doom for our economic outlook.

Meanwhile, the smart money is on the run. In response to the rapidly deteriorating situation, investor funds are flooding into the safe haven of government debt obligations. The yield on the two-year note sank to a record low level today and the 10-year-bond yield is approaching 2½ %, down from 4.01% in early April. Yields in the bond market move in the opposite direction to prices, and when they fall to the extent that they have, it signals that the most sophisticated investors in the world foresee a bleak and risky future.

It’s a long, dark tunnel ahead and, so far, there is nary a glimmer of a light in sight.

Floods, and now cholera, continue to disrupt the lives of Pakistanis, especially those living near the Indus River bordering the tribal areas along the Afghan border. The UN has announced that 14 million people are affected and the death toll, so far, is about 1,500. There is concern that the crisis is destroying the nation’s fragile economy and undermining its political stability.

The United States has come forward with emergency aid which may be having a positive impact on its public image in the areas affected. However, at the same time, we continue to terrorize the residents of the tribal areas with the sounds of our drone missiles seeking out and destroying the designated targets. Only the CIA, and perhaps the Pentagon, know the true benefit of this program, although it seems that for every insurgent killed there is no lack of available replacements.

Yesterday, intelligence officials announced that “suspected” U.S. missiles killed another 12 people in the tribal region. Last month, the BBC said that there had been 87 such attacks since Obama has taken office, resulting in the deaths of over 700 people. Significantly, according to the BBC, “positive identification of the victims, either by Pakistani or U.S. authorities, has been made in fewer than a dozen instances.”

Back in Washington, Defense Secretary Robert M. Gates has announced that about $10 billion is being cut from the Pentagon’s payments to private contractors and he is launching a public relations blitz to gain approval to utilize the savings to develop new ships, fighters and other weapons systems. Despite the fact that the Pentagon budget is likely to top $700 billion this year representing, once again, more than 50% of all global military expenditures, history would appear to be on Gates’ side. War, and the preparations for it, seem to be the one issue that Congress has shown a unified support for.

As the military/industrial complex continues to condition the U.S. public to the concept of an extended campaign, General Petraeus said this morning that progress in Afghanistan will “take time.”

Last week, the Department of Defense released the obituaries of 10 U.S. military personnel killed in that theater, ranging in age from 19 to 30, bringing the total U.S. deaths there to 1,226, according to the website icasualties.org. The most recent fallen heroes included seven that were killed by improvised explosive devices (IED‘s).

As our force in Iraq continues to shrink to a total of 50,000 “non-combat” troops, Baghdad was rocked this morning by eight explosions.

The Department of Defense, last week, released the obituary of one 23-year-old soldier, Faith R. Hinkley of Colorado Springs, Colorado, who was killed in that country. Faith died from injuries suffered in a rocket attack on her unit in Iskandariya. Total U.S. deaths in the Iraq theater now stand at 4,414, according to icasualties.org.

For those who try to make some sense out of the headlines that invariably only trumpet the stock data, stop right now. It’s a complete waste of time.

If you were to walk into the building at 11 Wall Street in New York City, you’d be in the home of the New York Stock Exchange, the world’s largest such organization. As of May, the market capitalization of its listed companies was $12.25 trillion. The exchange is owned by NYSE Euronet which also owns the largest centralized, mostly corporate, bond platform in the world.

This common ownership of the major trading facilities in the stock and bond markets is one of the few connections between the two sectors, especially as to how they assess economic information and place their bets.

The growing disparity between the investors in the two markets was proven once again this summer by comparing their respective outlooks.

For common stocks, the creams of the crop are the 30 companies listed in the Dow Jones Industrial Average. From July 2 through today’s close, the Dow surged 7.1%, even after today’s loss of 2.8%, thus revealing a decidedly positive outlook for the economy, at least until this morning.

As for bonds, it is well, for this purpose, to realize that bond prices tend to rise, and yields thus tend to fall, when the investors have a negative outlook and are seeking a safe haven for their funds. The highest-quality, long-term, bellweather bond index is the 10-year U.S. government issue. Over the same period as above, since July 2, the yield on this index has fallen by 10.7%, indicating a remarkably negative outlook.

So, why the difference?

For one thing, the stock market is myopic, and in more ways than one. Stock investors are likely to ignore conditions that might develop more than six months in the future, no matter what trends may be staring them in the face. For example, they first showed that they had any inkling of our current economic decline, the greatest since the depression of 80 years ago, only two months before it actually started. The Dow reached its all-time high of 14164.43 on October 9 of 2007. The Great Recession started in December.

Furthermore, the only reason for today’s loss was that the Fed, after digesting the latest barrage of economic news, announced yesterday that it may have overestimated its outlook for the nation’s recovery. It also said it is planning to initiate a program of buying long-term government bonds to keep the rates down so as to stimulate the economy.

For another thing, stock investors tend to focus on net earnings, which may actually be called the “tail of the dog,“ economically. They’re always yesterday’s news by the time they come out. Also, there may be more important general business developments working their way down through the dog’s system that get little attention.

Additionally, the stock market paradoxically tends to react to some types of news by acting in a seemingly contrary manner. This might be because, for example, bad news may actually provide an opportunity for further layoffs, thus resulting in lower labor costs, or it may provide an excuse for the Fed to step in and lower the cost of money, or both. The fact that such benefits are unsustainable, doesn’t bother the stock investors one bit. Another oft-used explanation for the market’s unusual reactions to both good and bad news has been that the market had already discounted the information.

Finally, there’s a saying in the stock market that when things look to be about as bad as they can, that may be the best time to buy. The theory is that the bad news has driven all the scaredy-cats (the bears) out of the market, leaving only the optimists (the bulls) to drive up the prices. That may well have been the rationale for this summer’s rally, in which case it may end up being just another bull trap.

Investors in the bond market, on the other hand, seem to establish an outlook which has historically been generally on the money – and they tend to stick to it. Also, they generally ignore unsustainable factors.

Since April 1, for example they have consistently shown a strong belief that economic conditions are not improving and they seem to have correctly anticipated the recent spate of bad news that caused the Fed‘s announcement yesterday. On April 1, the 10-year government yield was at 4.01%. Today, it hit 2.68%, a drop of 133 basis points, or 33%, in a little over four months.

Also, the so-called yield curve is a business cycle prognosticator with an unblemished track record. It is telling us nothing today, however, and is thus only a subject for another time. Nevertheless, when it speaks it is well worth listening to and, at that time, It will be explained and reported here.

So, for now, once you’ve read the hard-news articles and looked at the interest rates, you might as well throw the business pages away. The rest of the content is largely useless, unless of course you want to follow the progress of your investments. In that case, if you’ve been ignoring most of the information being spoonfed to you, you might just find that you’ve been beating the averages.