This week, HBO may have aired the last episode of The Sopranos, but mobster Tony Soprano isn't done with his psychiatrist, Dr. Jennifer Melfi, just yet.
* * * * *

Dr. Melfi,

Enough with this b.s. I need to come back to you for more talk therapy. I feel like I'm dead or that I'm stuck in a black hole of nothingness.

Tony Soprano

* * *
Mr. Soprano,

I thought you were dead! How did you get my e-mail address? As much as I deplore the current situation you find yourself in, I can do nothing. Since dropping you as a patient two weeks ago, I have taken on another patient who works with the U.S. economy.

I can't tell you his name, but he used to live in New Jersey when he was a professor of economics at Princeton University, and he heads up a large banking organization that's based in Washington, D.C.

Dr. Melfi

* * *
You gotta be kiddin' me. What makes you think you can help this guy? He's dealing with the U.S. economy, and it's as bad off as New Jersey. What a [stinkin'] sinkhole.

Tony

* * *
I think my new patient really cares about the U.S. economy. It's just that sometimes he feels helpless when monetary policy isn't able to solve every problem, such as declining home prices. They keep falling, and he's had to admit that it looks like the housing market will continue to deteriorate over a long, drawn-out period.

Recent information about rising inflation really worries him, too. Here's something I just read in the Christian Science Monitor about food prices spiking up:

"Inflation in grocery aisles is up by more in the first six months of 2007 than in all of 2006. That means food costs are on track for the biggest annual percentage hike since 1980, according to the Labor Department. The anticipated 7.5 percent increase would readily outflank the 2.6 percent core inflation rate to date, which excludes food and energy." [June 12, 2007]

So, like you, he feels powerful in some ways but helpless in others.

Dr. M.

* * *
That's the most [asinine] thing I ever heard. So why should people pay more for food? Just tell your patient to create a little agita for the food producers. He should tell them to lower their prices and kick him points – or else. And then send an enforcer. He'd do that if he had a pair, if you know what I mean.

Tony

* * *
Well, maybe his problems with interest rates and the U.S. economy are tougher to deal with than sending one of your soldiers out to threaten people.

Dr. M.

* * *
Yeah, O.K., O.K., but I say there's a bigger problem givin' him anxiety attacks. Just look at how personal debt is goin' up in this country. I mean I've been reading this financial stuff from a guy called Bob Prechter. Here's what he says the big problem is:

"The investment markets are only part of the debt picture. Most individuals have borrowed to buy real estate, cars and TVs. Most people don't own such possessions; they owe them. Credit card debt is at a historic high. Instead of buying things for cash these days, many consumers elect to pay not only the total value for each item they buy but also a pile of additional money for interest. And they choose this option because they can't afford to pay cash for what they want or need. Self-indulgent and distress borrowing for consumption cannot go on indefinitely. But while it does, the "money supply" – actually the credit supply – inflates. But it is all a temporary phenomenon, because debt binges always exhaust themselves." [Elliott Wave Theorist, May 2007]

Can you imagine anything [stupider] than dealing in credit rather than cash? In my business, we use cash. It's harder to trace.

Tony

* * *
I appreciate the information about excessive credit. That may be part of the reason my patient feels so anxious about the future of the economy. But it seems to me that his anxiety comes from an even deeper place. It's as if he knows that his organization doesn't really control the economy, just like you couldn't control your mother's destructive behavior, remember?

As much as he likes to talk about being in control and being able to raise or lower short-term interest rates, I think he knows that it's really the financial markets that determine the ultimate level of interest rates. For instance, the action this week in the long-bond market is putting him in a panic, because as those rates go up, homeowners' variable rate mortgages will be adjusted upward, too, and it will be more difficult for them to keep up with their monthly mortgage payments.

It can't be very easy to have to follow the markets when you think your job is to control them.

Dr. M.

* * *
Oh, yeah? Well, I think his biggest worry is really his old don, you know, that Alan Greenspan guy. We call him the "capo de tutti capi" in our business.

Tony

* * *
Your business is not one I want to deal with anymore. At least my new patient's business of banking and finance is clean and bloodless. You are right about his old boss being a problem, though. For instance, Bloomberg reported on Tuesday that treasury yields rose to their highest point in five years after Greenspan made a speech warning about problems. I think this sort of thing really gives my patient agita.

Dr. M.

* * *
I bet your new patient would like to have this Greenspan wise guy whacked before he talks again. I mean, after all, when a boss isn't boss anymore, he should keep his big yap shut, right?

Tony

* * *
Oh, no, here we go again. Although I do feel some sympathy for your plight, I cannot help you anymore. I never know when you might cross the line. Good-bye, and please do not e-mail me again.

Dr. M.

Susan C. Walker writes for Elliott Wave International, a market forecasting and technical analysis company. She has been an associate editor with Inc. magazine, a newspaper writer and editor, an investor relations executive and a speechwriter for the Federal Reserve Bank of Atlanta. She is a graduate of Stanford University.