As this is a family type blog (most of the time) we will not discuss the new facts concerning the death of David Carridine. Still a sad story, but somehow both more and less shocking at the same time.
Must See Employment Widget
The Big Picture showcased a fine piece of work by the folks at TIPS Strategies that is a must see. I cannot embed it, so please use the link to Barry's blog here.
The explosion of unemployment is staggering when presented in this format.
I had made some comments on the Latvia debt sale failure the other night. So far this has been seen as a non event by the markets, and I offered that is was a question of scale, not principle. Latvia is such a small player they are not causing alarm bells to go off. Ignore at your own peril I say.
Excellent site The Baseline Scenario had some ideas today that I felt captured the heart of the matter. Excerpt:
Latvia: Should You Care?
In the current field of grand economic strategy, against crisis and for recovery, Latvia looms small. This is a country with just two million residents, best known recently for a huge current account deficit – the excess of imports over exports peaked out around 25 percent of GDP. Ordinarily, there is nothing here that should move the world economy.
Yet, there are some intriguing and somewhat disconcerting signs that point towards our common future – much like a close study of Iceland, back in October 2008, told us a great deal about what was to come...
..My takeaway: we are still not ready for hard economic conversations anywhere in the world. Wishful thinking prevails, in Europe as much as in the United States. No one wants to start the difficult and messy task of restructuring – i.e., reducing – debt payments. Everyone feels entitled to a bailout. And the banks get one.
Or put it to your elected representative like this – we’re transferring Latvia’s debts from European banks onto the IMF, which is underwritten by our future tax dollars; then there will be default and devaluation for which no one is prepared.
Yet another "wait it out" approach that always work so well.
The FED is worried about a bond market dislocation. The FED has only one tool left and that is public words that they hope will not garner too many laughs. Now Atlanta Fed President Dennis Lockhart is getting in on the "raise rates" brigade:
The Federal Reserve needs to be "anticipatory" and not wait too long to tighten monetary policy, Atlanta Fed President Dennis Lockhart said in an interview published on Friday. ... Lockhart is a voter on the Fed's policy-setting Federal Open Market Committee, which meets June 23-24.
The FED cannot anticipate their next bowel movement much less when they might raise rates to a staggering 0.25%. Spare me the baloney gentlemen. My call for zero into 2010 still stands.
Foreign Central Bank Holdings and Possible Games
Every Friday you should stop by Housing Doom and the weekly compilation of graphs and data concerning foreign central bank purchases of US debt. This weeks report has plenty of information that is important, so no excerpts. Just check it out.
Last night I opened up a channel where any and all could write a short explanation why higher oil prices and/or higher mortgage rates are good for the economy. I was a little surprised how few entrants there were both here and at the articles pick up at Seeking Alpha. Still, quality matters and not quantity.
Stagflationary Mark, writer of the great site Illusion of Prosperity, works through the medium of sarcasm much like myself. Mark submitted the following short essay in answer to the questions "How will higher oil and mortgage rates help the Economy?":
1. Higher Mortgage Rates.
Some people will sell their homes as home affordability goes down. Other people will buy new homes before interest rates go higher. That wealth transfer can then be taxed. Once completed, mortgage rates can tank again. That will allow the second set of people to sell at a loss and allow the first set of people to subsidize those losses through government bailouts. It's the American dream! We're living it!
Further, the information age's sarcastic economy will thrive under such conditions. Expect "Economic Disconnect" and "Illusion of Prosperity" type blogs to rocket higher during their initial public offerings, lol.
2. Higher Oil Prices.
Higher oil prices will lead to lower oil prices. We've already seen this once. As a general rule of thumb, expect oil prices to become 5x cheaper if we can first get oil prices 10x more expensive.
However, even if oil does not crash there are still benefits to our consumer driven economy. Picture the following.
The typical consumer probably lives toilet paper roll to toilet paper roll (sort of like paycheck to paycheck). Now picture how is behavior changes when the headlines say, "Toilet paper shortage imminent." Shopping, baby! That's what I'm talking about. Consumers will be literally clearing out the shelves.
In summary, I am very optimistic about rising mortgage rates and rising oil prices. Combine that will higher taxation on basic needs and we should have this economy humming along in no time.
My face was hurting as I was reading that!
Mark has won the contest, and thus he is entitled to his name in print (I have done that) and a feeling of achievement. In addition Mark has won one ounce of fine .999 silver. The choices are:
-One 1oz Pan American Silver bar
-One 1oz Silvertowne Mint Silver bar
-One 1oz American Silver Eagle round
To claim your prize Mark:
-leave a secondary email in the comments section tonight (one you don't need or use much)
-I will email you with a detail that you can be sure it is Economic Disconnect
-I will need your address to ship to as well as your silver ounce selection
Well done Mark!
Friday Night Entertainment
I need a break so onto the good stuff!
Must See Trailer
The Star Wars franchise is expanding into the massive multi player onlione space with a new game called "Star Wars: The Old Republic". I do not play video games, but the HD trailer for the game is simply awesome. No, try wicked. It is tonight's must see video:
It seems even clever cats can be suckered into a Bernie Madoff Pyramid Scam:
see more Lolcats and funny pictures
All hail master kitty:
see more Lolcats and funny pictures
Christopher Reeve will always be “Superman” in my book. The ending sequence in “Superman I” has always been one of my favorites. Watch Superman turn time back to save Lois Lane:
One my favorite actors is John Cusack and one of my favorite films is "Fat Man and Little Boy" which was a based on reality but cspiced up recounting of building of the first atomic bombs. The fil also starred Paul Newman, another favorite. In the following scene the scientists are "tickling the dragons tail" by testing plutonium criticality. A mistake happens and Cusack's character has a split second to stop a major nuclear event at the cost of his own life:
Ok, now time for the tunes!
I have always been a big Neil Diamond fan. So many songs to choose from including "Sweet Caroline" and "Love on the Rocks" makes it tough. One song I always thought was great is "Brother Love's Traveling Salvation Show":
When I named this blog I had this particular song in mind; Stereo MC's and "Connected"; the line "Get Yourself Connected, the Writings on the Wall" is where my pen name came from:
If a song has not appeared for two years then I get to play it again! Please enjoy one of the ultimate power ballads, "Alone Again" by Dokken:
Final song for the night. While many are familiar with the songs that the band Twisted Sister made video's for, most of their best songs never made it to Mtv. A great band that was very underrated, try out "Stay Hungry" from their early album:
Have a good night.