End of a Strained Week

It was a terrible week at work and I am glad it is over. I think I will keep the heavy stuff very short as I am need of a little fun and games to loosen up for the weekend.

It looks like a three day weekend as a vacation day will be spent Monday to be able to celebrate the Superbowl in style Sunday night!

It seems Massachusetts will be spared the big east coast snow storm and that is a very good thing!

Jobs Number
I am not going to spend much time on this garbage can. Even now, almost 10 hours after the release of the data, some of the best analytic writers are still trying to figure out what the hell the story is. There were revisions and changes to basically everything and then changes to revisions and revised revisions. Whatever.

Short story: More jobs were lost last year than estimated and job creation is not happening as of yet to any degree. There, simplified it for you.

Late Day Market Fireworks
After trading ugly all day the indices had a monster rally ending just positive for the day and saving "DOW 10,000" for another weekend. Whuppity Do.

Reasons? Do we really need any? Take your pick:

- JP Morgan guns the market right into the close (complete with Bloomberg Terminal screen shot of never ending buy orders)

- Short squeeze because nobody wants to be short over the weekend when, as predicted here, the Euro leaders meet to craft a plan to bailout Greece. I may change my header to read: "EconomicDisconnect: Read Tomorrows Paper Today".

Good Read
Mish has a compilation of the salaries for the Bay Area Rapid Transit (BART) employees who strive to bring you light rail service in San Francisco for a minimum 80,000 dollars a year:
Rapid Transit Salaries
Sick joke but it's not.

Must Read
The Automatic Earth is always a must read for me, but today's missive should be required reading for everyone and I would suggest you do take a minute for this gem:
Deep Blue Friday?
Wow, just wow.

That's about it, I think an extended entertainment section is just what the doctor ordered.

Friday Night Entertainment
"Hey is that freedom rock?"
"Yeah Man!"
Well, turn it up Man!"
An early infomercial!

Funny Pictures
I had a high powered intellectual discussion last night on the merits of the term "Owned" versus the new era term "Pwned". It put me in the mind of this picture:

Too funny, no, three funny!

I think cats and a pug in a tub could be a recipe for a serious disaster:

see more Lolcats and funny pictures
Man they look SOOOOO happy! The dog will be happy to just get out, the cats will plot revenge. Cats rule.

Book Passage
This one is from a short story not a novel;

"But it's not just the weapons they have. It's the machines that let them see and talk to each other from far away; the machines that do their reckoning for them; their recorders and everything that has to do with them. From what they say of their medicine, I'm almost tempted to believe you and think they are wizards-they actually know what causes their diseases, and how to cure or even prevent them. And their farming: this planet is far more crowded than any I've ever seen or heard of, but it grows enough for all these humans."
Togram sadly waggled his ears. "It seems unfair. All that they got, just by not stumbling onto the hyperdrive."
"They have it now," Ransisc reminded him. "Thanks to us."
The Roxolani looked at each other, appalled. They spoke together: "What have we done?"

- Harry Turtledove's "The Road Not Taken"

Film Clips
Filling up your netflix box!

A great scene from one of my favorite films, enjoy the moonrise in "Joe Versus the Volcano":

Very Nice.

Your economic recovery dollars at work, ask "What's wrong with the street?" in "Falling Down":

Fiction or real???

Rock Blogging

Gypsy, sittin' lookin' pretty
The broken rose with laughin' eyes
You're a mystery, always runnin' wild
Like a child without a home
You're always searching, searching for a feeling
That it's easy come and easy go

- Def Leppard

I will open the show with a song I heard on Monday night in the closing credits of a movie and when I heard it I was like "I remember that song!". Enjoy John Cafferty and "Voice of America's Sons":

Great stuff.

The perfect song for a Friday Night? How about Kim Wilde and "Kids in America"?:


Requests?

When reader Watchtowr requested "The Blowers Daughter" I thought he was trying to make the blog R rated! Instead enjoy the very nice song by Damien Rice that I had bever heard before:

Great request!

Another song I had never heard before was on tap from reader Gawains so take a trip with David Bowie and "Diamond Dogs":

Interesting!

One more? Two more? Ok, two more because two is better than one. Two for one? Hells yes!

Take a listen to a softer but no less powerful side of Iron Maiden with "Children of the Damned":

Wicked!

Last call! Have bail money ready? Yes? Then let's go.

Let us return to the 1980's when everything was great, the sun was always shining, and the rock and roll was so good you wanted to pass out! Here is Cinderella with "Nobody's Fool" in crystal clear HD no less:

Perfecto salad!

Have a good night.

Your Bazooka Bluff has Been Called

Another long week at work filled with some drama that I could have done without. Looking forward to Superbowl weekend! Go Saints!

Remember, tomorrow is Friday night so get your requests in.

Note of Thanks
Last night I asked for help regarding revenue number for Whirlpool (WHR) for the past 9 years so I could work on an idea I was rolling around. Stagflationary Mark pointed me towards a great source for collective information on the S&P and that would have worked. An Anon reader was so kind as to pull up the WHR revenue numbers on his handy Bloomberg Terminal for me and provide a great chart for the years 1992-2009 and with estimates for 2010 and 2011 to boot! Thanks Anon! I will be reviewing that this weekend. I wish Anon all the best, especially as it pertains to things of chance, like say, the lottery or scratch tickets! (inside joke).

Side Dishes
I will not pretend that the big story was not the market panic/puke today but there were some other morsels that may go unnoticed that I thought were worth a look:

-Market Ticker notices that Cisco Systems (CSCO) has gone the route of zero percent financing to boost sales. This smacks of desperation and it reminded me of the height of the tech bubble when CSCO would lend money to customers to buy their products! Not quite the same, but a trend worth watching.

-No longer a banking executive with national security protections, Ken Lewis is going to court. It will be interesting to see if old Kenny boy tries to take Bernanke and Paulson down with him, and he is sure to have an armada of attorneys focused on doing just that. One can dream.

-In the most overwhelming vote ever held at Economic Disconnect, 87% of respondents think the triad of trouble (Bernanke, Geithner, Paulson) are liars. My vote was for mogwai's that ate after midnight, but that was the only vote it got!

Your Bazooka Bluff has Been Called
"I'm Daring You Billy"
Dick Brewer to Billy the Kid in "Young Guns"

On Tuesday I noted that Philippines failed to sell all of their bonds for the second time this year. Sovereign debt issues are a focus of mine for many reasons and today it seemed it was a focus for just about everyone.

In my mind there were two possible things at work today, one was the same old trick we have seen and the other would be a new chapter in the debt crisis.

From the department of the "same old story" the sell off today could be the never fail trick played by the FED and their friends to dump the stock market right before a major bond sale. Keeping in mind that indirect bids for the 21-day auction this week registered at ZERO (that's 0.0) the bulky sale next week of debt (around $150 Billion total) may have been a bit nerve inducing. Nothing like a major market route to get yields down and participation up, especially when US debt is so much better than any other debt in the world. Safe haven status rules indeed. If this was the motive then I would expect a quick reversal later next week and the good times to roll again.

If however this was something else, then we have an important inflection point facing nations all over the world.

So let me back up a minute. Remember a little time ago when Dubai was facing a serious debt issue? Markets swooned a bit and the credit markets were nervous. They were of course rescued by Abu Dhabi (though it became somewhat muddled) and all was well once again. What is important is that an explicit guarantee was demanded by the market and one was provided.

If this sounds familiar, it should. Who could forget Hank Paulson's claim that all he needed was a "bazooka" in regards to Fannie Mae and Freddie Mac:
"If you have a bazooka in your pocket and people know it, you probably won't have to use it"
Of course in reality the market rolled up in a fully loaded APC with reactive armor and called the bluff. Paulson's bazooka was limp and a full and explicit backing of FNM/FRE debt soon followed. Now they even has unlimited backstops!

And thus the current situation should be easy to recognize.

CDS protection costs for Greece, Portugal, and Spain were blowing up today. For some time now the Euro leaders have tried to maintain a "no bailout policy" in regards to Greece specifically, in my mind to try and keep themselves out of having to do the same for Spain which is a much bigger problem than Greece.

Well that game is now up. The players behind the money want a plan for an explicit backstop for Greece and some plan for Spain as well. The CDS costs will force the hand of the Eurozone here. In this day and age of government intervention in everything and anything this was inevitable. Why risk money on a wink and a smile when you can get a government guarantee on the whole thing up front? Why indeed. Anyone remember all those fire side chats about moral hazard I tried to have all the time? Maybe now you can see why.

The Euro currency is not going to break up. You know it, I know it, everyone knows it. I expect some kind of announcement either tomorrow or over the weekend in regards to the Greece issue that will also lay out the path forward for the next in line countries. Printing press Euro style coming up! I can recall all those weekend announcements for the latest greatest US banking bailouts during the height of the crisis, this will be no different.

In response to a dialogue I was having with the EconomPic author in this thread I noted the following:

jake,
why unlikely?
Short version; bluff of Euro has been called. Explicit backing of problem debt (Greece, Spain, Portugal, etc) is now demanded by the markets. How can they not answer and what does that mean for the currency?

To which he responded (quickly too, which I do appreciate the time taken, I know how busy we all are):

not necessarily unlikely that we'll see a correction in markets and/or economic downturn, but i think unlikely of a crisis of the system (where counterparties don't trust one another, bank runs occur, and the global economy shuts down).

it will be interesting to see how this plays out. i can see two opposing stories play out if the spain, greece, portugal get bailed out.

1) the euro gets crushed
2) the euro rallies as the uncertainty is reduced

I always get a bit lost where a government guarantee is taken as gospel without regard to the method of making good. I guess in the end you can sell off parts of your country (to whom?) or take away from private citizens to make good, but that carries it's own risks and not in a financial sense!

Still I think Jake will be right on number 2; the Euro will rally (not much) on the perceived reduced risk.

Now I have been seeing many running a victory lap in regards to the US dollar after all this. Enjoy the jog gentlemen. We have our own eurozone here called bankrupt states and California makes Greece look like, well, Greece. There are many others. Mish has extensive coverage of state and city issues and I would refer you there. Indeed the US dollar may be "King Crap of Turd Mountain" but that is not something you want to brag about at parties.

What About Gold and Silver?
Gold and Silver were crushed today and we even had the obligatory Clusterstock "Gold Sucks" post to top it off!

Now one would think on a terrible day for the markets gold would be a big winner. Instead it outpaced the indices to the downside. Silver was especially blown away. Gold and silver are hedges against fear, confusion, printing presses, uncertainty, inflation, deflation, cancer, H1N1 are they not? Well the answer is sometimes yes and sometimes no.

The metals were destroyed last March just like the markets, but stopped falling before the markets did, recovered faster, then were overtaken to the upside. Gold has been directly correlated to the indices at times and other times it has been off on its own. Gold has been walking hand in hand with the dollar at times and other times they have run away from each other. What does it all mean?

I have no idea.

What I do know is that the US will be faced with a double dip in housing that will prompt Quantitative Easing 2.0 for the mortgage market. Bankrupt US states will require another round of cash buckets to be handed out. Unemployment will require extension (forever?) of extended benefits. The Eurozone will have to confront a mass of angry union workers hell bent on getting their promised payouts. And much more.

I have always desired a large scale discussion on just what money is. The events of today only fast forwarded that talk. Today gold and silver got dusted. Tomorrow maybe paper money will encounter a similar problem.

Have a good night.

Housing, Jobs, and the Stock Market Agree to Disagree

It has been a rough week at work folks so just a quick thought or two for the evening.

Reader Help Needed
All I wanted to do was to get the revenue numbers for Whirlpool Corporation (WHR) and check them over time. This proved to be nearly impossible in a reasonable time frame! I do not want earnings per share (useless indicator to me) or anything else, just revenues for the time frame of 2000-2009. Anyone know an easy way to get this info without digging through miles of quarterly reports? Any help is appreciated.

Housing, Jobs, and the Stock Market
The stock markets have been up so long I almost have to double check and make sure on the off day that the indices close in the red. Many have written about how volume on the upside has been lacking, but on down days it has been high. Maybe more folks like to sell once a month than spread it out!

I bring this up because the ability of the markets to ignore structural news that is bad is amazing. A day may come when we find out why, but until then consider the following points that by themselves mean more to the economy than the stock market does, yet the stock market, which is supposed to be a gauge of the economy, continues it's assault back to old highs.

Housing
The Positives: Home sales are moving up and prices has stopped a never ending collapse.
Caveats to this: Sales have been at the low end due to tax credits and FHA loan expansion. Government intervention has supported things artificially.

Macro Issues: Too many to cover in detail but shadow inventory is a big one and an increasing foreclosure rate is alarming.
From today:
Sorry Folks, The FHA Is Still Going To Meltdown
FHA loans going south in a hurry

Mortgage Delinquencies Pass 10%: LPS
National rate keeps climbing

Without Precedent in the Modern Era
Walking away gaining momentum

I would also add that when (IF?) the government ends their enormous support measures (MBS buys, ZIRP) there is a built in 10-20% price correction on tap. How will this affect the home sector? Badly I imagine. Nothing like jumping at a 8k tax credit only to be underwater by 50k in two years!

Jobs
Word is that CNBC has a whole truckload of baseball caps with the slogan:
"Jobs Were Created Today!!!!"
ready to pass out on Friday when the BLS releases the jobs number. Ok, I made that up.

Lost in the ether will be the enormous revisions coming to the 2009 job loss total because as you know, employment is a lagging indicator, until it goes up, then it is a leading indicator worth a 5% move to the upside.

Mish has harped on this all year and when the 820,000 additional job losses are announced for 2009 on Friday you will have been informed:
824,000 Will Disappear on February 5; BLS Admits Flawed Model but Plans No Changes
That is some revision.

Zero Hedge goes further down the rabbit hole:
Explaining The Government's 1.8 Million Job Overestimation In Pictures
Can Bernanke follow along with the pictures? Can anyone?

This year states and municipalities are going to start having serious issues and this is yet another facet ignored by the markets. Sovereign debt risk is as high now as during the crisis apex, and this too seems unimportant. Lots of things have been deemed unimportant. The senate election result in Massachusetts is already unimportant and has lost any steam to influence CONgress as real financial reforms have been torpedoed out of existence before they even got a chance to have a debate.

At some point, something is going to matter!

Have a good night.

Around The Web

Tuesday is always a late day for me so all I have tonight is some linkage, but I promise it is good stuff!

Philippines’ Bond Sale Fails for 2nd Time This Year
Reasons for the failure include such one-off country specifics as:

'“The market is risk averse because of the deficit, the exit strategy of central banks and election concern,” said Oliver Jimeno, first vice president and treasurer at Chinatrust (Philippines) Commercial Bank in Manila, one of the nation’s 40 primary dealers. “The market is vulnerable to any bad news.”'

Yeah the Philippines are messed up bad.

It Begins: Japanese Post Bank Urged To Diversify Away From Government Bonds
Now this one I almost scanned over, but get this line:

“Nearly 80 per cent of Japan Post Bank’s funds go towards buying JGBs, but from now on [any increase in deposits] could go towards buying corporate bonds . . . and US Treasuries,” said [Shizuka] Kamei, who is also in charge of postal reform.

His comments come amid growing fears about the risks of sovereign debt after governments around the world have borrowed record sums to support ailing economies in the wake of the financial crisis.

“The US is having difficulty due to a lack of funds. It’s only natural that we should support the US when it is weakened so Japan Post Bank’s funds may go towards that,” said Mr Kamei.

If we have had problems selling debt I am not aware of it, why is Mr. Kamei saying that?

DR Horton Returns to Profit
When you get to play games with tax windfalls you make money! A winning strategy for the homebuilders.

What is American Corporatism? - By Robert Locke
Loyal reader Gawains submitted this article for a read last night. It was written in 2002 and damned if the guy did not see the future! Long piece but so worth your time.

The last mention goes to Jesse's Americain Cafe. If I could write this well I would put up a donation button and imagine that readers could recognize brilliance when they saw it and make me rich! As things are, my stuff is 100% free!

On Monetary Inflation and M3
The discussion covers monetary issues related to inflation but then describes fiat in a way that I agree very much with. Snippet to get you hooked:

One might look an an unconnected car battery and say, 'oh look it is benign.' But grab hold of each of its terminals with your bare hands while grounded, and see what happens then. And gold is in part measuring that potential, for the Fed and the monetary base and a resurgent economy to generate monetary expansion. There are lags of years involved in the process.

And this is the nature of Bernanke's challenge. He must at some point allow the economy greater access to his excess monetary reserves, and the swollen monetary base, but try to prevent the dollar and the bond from igniting. And gold is where the prudent seek at least a partial refuge while the central bankers conduct their experiments.

Is gold a bubble? It is said to be so by those who wish you to extend your willing hands, and grasp the poles of their mad experiment, without reserve, to help them measure the effect. And, of course, by those who merely to stand by and watch, and plan for their own per capita increase in wealth if you are subsequently reduced to toast.

Nice!

Have a good night.

All This for 4 Walls and a Roof?

Well I got a bit sidetracked this evening so this post will be short and sweet! Sometimes reading quality blogs is like my Wikipedia addiction and I look up and realize I have been reading for hours!

All This for 4 Walls and a Roof?
There was all kinds of information out there today, but in the end it all distills down to housing and mortgage debt. It always has, and it will until the bitter end.

We have discussed this many times before in that the banks were largely insulated from a downturn after the Dotcom bust because they sold shares for a fee and sold them to you and me. When everything went bust they really had little skin in the game. This time the banks are knee deep in the losses and while you or I can just lose our investment, the banks have lent out 10X as much money as they ever had so losses get problematic fast.

Some key charts are on tap and I would suggest reading the links back as the work is high grade.

First off, The Automatic Earth pointed me towards a telling chart and write up by Michael David White and you really need to read the whole thing. I am including one chart because I think it is very important and also to get you to read the article.

The following is a chart of Residential Mortgage Debt Outstanding and a trendline for supportable mortgage debt:

What bears notice is that outstanding mortgage debt has only declined very little from the peak. The chart shows a drop from $11.95 trillion to $11.88 trillion. How is this possible you may ask as you have seen the Case-Shiller index for home prices and that has cratered over 20% depending on region? This is because not all homes are sold every day or every year.

This is a key point. The outstanding mortgage debt has only declined very little and this is due to the relatively small numbers of home sales that have generated losses that have been recognized. Now of course the problem is that values associated with this debt are far below where they are held by banks. This has always been the problem.

And thus one should not be surprised to see the ends of the earth the US government will go to to support home prices. They are protecting an insolvent banking system. I think this chart may be the most important chart I have seen in some time.

So why does this matter?

The banks have steadily unloaded the toxic paper onto the government. The government thinks this is a temporary issue and is willing to hold the loans until such a time when home prices rebound enough to support the underlying debt. It is not just the banks that have been helped.

Russia had approached China in an effort to dump GSE debt to force the US government to guarantee it:
Paulson: Russia tried to exacerbate US financial crisis
Which of course the government did, allowing foreign CB's to dump GSE debt back on America in exchange for newly minted Treasuries. What a deal! The words "unlimited funding assistance" come to mind for some reason.

How much of the housing market is our government responsible for? Try all of it:

SIGTARP Warns of Second Housing Bubble
The report warns the government’s efforts to stabilize the housing market may create a second bubble. “The government has done more than simply support the mortgage market, in many ways it has become the mortgage market, with the taxpayer shouldering the risk that had once been borne by the private investor,” the report said.

Included in the report was the above chart, which tracks the expanding percentage of mortgage flows attributable to the government-backed mortgage entities like Fannie Mae Freddie Mac and Ginnie Mae in the mortgage-related finance market. As the chart shows, during the housing bubble, government-sponsored enterprises (GSE)-sponsored lending was at extremely low levels, but has since increased beyond levels even seen during the government intervention during the Savings and Loan crisis 20 years ago.

Just amazing.

It gets better of course, it always does.

Housing Doom notes that GSE liabilities are currently left off the budget numbers because, well, why scare anyone?:
Reuters: Budget Does not Count $Trillions in GSE Liabilities
Now that would be interesting.

Thinking about the debt needs for the US government I often wonder where all the buyers will come from. Of course sometimes you have to look close to home:
The Treasury Is Soliciting Your Feedback Regarding The Proposed Annuitization Of 401(k)
More and more trial balloons about attaching 401k money to government mandated bond purchases. Argentina anyone?

I am running a bit late so I will wrap this up.

The only mission of this ponzi finance scheme is to manage the mortgage market long enough that the losses will not engulf the system or finish the currency. Some may have wanted to learn about bubbles because after they burst it can take a LONG time for things to come back. Of course with a printing press on hand this process can be done very quickly via devaluation.

When viewed in aggregate I find it hard to make another plausible conclusion. You can offer alternate ideas in the comments section.

Have a good night.

Thoughts on the Big Game

I have been amazed there has been so little Superbowl discussion this year so far. I think all media have learned the lesson that if you write about and talk about the game for 24 hours for 2 weeks, people get burned out. I will have a more thorough preview up next weekend but I did want to make a point or two about the game that have been missed so far.

1. The Indianapolis Colts are About to Have Things Speed Up. A Lot.
I had this point in mind just from playoff games, but after review of the Colts schedule I am even more confident about this. What do I mean?

Here are the Colt opponents from December 6 on:
-12/6 Tennessee Titans
-12/13 Denver Broncos
-12/17 Jacksonville Jaguars
-12/27 New York Jets (1 half)
-1/3 Buffalo Bills (no real playing time from starters)

Playoffs
-1/16 Baltimore Ravens
-1/24 New York Jets
Notice a pattern?

How about all of these teams are severely limited offensively. Not one has a real passing attack. The last two games against the Ravens and Jets featured the offensive fireworks of a wet brick of jumping jacks.

Speed? None of these teams had much speed, especially at the receiver spot.

I think the Colts may be a little shocked when game time comes and they are faced with the number one offense in the league at full speed.

2. The New Orleans Saints Will Feel Bigger
After going against the Minnesota Vikings and their ginormous defensive line and gigantic offensive line, the Saints may well feel a bit bigger against the smallish fronts of the Colts. The Saints were able to run moderately well against the Vikings who are the leagues best rush defense. The Saints were able to generate severe pressure against a rock solid Minnesota offensive line. I think the Colts lines are much smaller, though much quicker.

Any reader knows I am in the tank for the Saints, but these two points are clear to me and not just my slant. We shall see.

Automotive Corner
Reader Watchtower made me terribly jealous a while back as he purchased the Mustang Bullit muscle car. Take a look at this thing:

Very nice indeed.

It seems Watchtower cannot stay away from horsepower and checked out the all new 2010 Camaro SS and even took it for a spin. A visual:

That thing looks angry!

My all time favorite car, the 1963 Split Window Corvette may well never be matched for stunning beauty:

Perfection.

I drive the Infiniti G35X AWD sedan and it is the best car I have ever had:

Still, it is not a growling, angry looking, mega powered muscle car so I guess I am still jealous!

Bonus!
Let' make it an all macho night as I just found a clip of the best sword dual in the Highlander series, Mcleod vs Grayson at the sulphur mine:

AWESOME!

Have a good night.

An Answer, Linkage, and Entertainment

This past week seemed to go by very slow. As such I am lacking the energy to do some kind of major post that will illuminate the future for all time or something to that degree. I will give an answer to a question posed in the comments section, rip off the best works on the web via linkage, and then reinvigorate with an entertainment section sure to please one and all.

Asked and Answered
From time to time the comments section is visited by one of the Anon posters. The one I am talking about offers a great contrarian view than most of what I write and usually will ask great questions that I will think about for some time. Last night was such an instance.

Anon@7:58 posted:

Here's a question, when is the last time you were optimistic, I mean truly optimistic about the state of the US economy? My guess is the answer is never, hence the reason some (namely I) question your impartiality.

For me, I was optimistic in 01, staid in 02-03, concerned in 04, gloomy gus pessimist 2005-07. Since then, I have slowly become more and more optimistic. Despite the massive, massive govt interventions, we still have gone through the most jarring economic dislocation in decades. We are so much closer to the bottom now than we were in 2005, and this makes me much more optimistic now than I was then.

Now if you are not familiar with Anon that comment may have seemed a touch rough, but I actually like his/her up front take and there are some points here that I would like to discuss.

When was the last time I was optimistic on the US economy? I would say the 1998-2000 time frame. I was fresh out of college, working at one of the hottest biotechs in the industry, gene discovery was running at a clip unseen which promised new drugs, the Internet was not new but the promise it offered sure was, a projected budget surplus was a good thing I thought, the dollar was king crap of turd mountain, and everyone around me (and myself to some extent) were riding the stock market wave higher.

So what happened?

Well, all those genes I and many others found were great but never really translated (pun intended!) to real drugs. My firm was losing about 400-700 million a year but was valued at something like 8 Billion dollars!

Cisco was almost worth more than Japan or something and suddenly that made no sense anymore.

All those stocks up in the nosebleeds came down hard and many got toasted (I sold all my options $5 from the all time high! HA!).

Pets.com closed which was scary.

On some of this I am trying to be funny, but what happened was a huge bubble burst. Soon I was informed I would be out of a job and had to find another. Many faced the same thing. The rest I think you probably know how it goes.

In summary, I wanted to learn how the whole thing happened and that was how I learned about things economic and especially about bubbles.

And not even 2 years later I started to see some of the same signs in housing here in Massachusetts. I applied lessons learned and figured the easy money from Alan Greenspan was an attempt to make the same kind of bubble the dotcom was in another form to rescue an economy that was facing the worst recession since the Great Depression (and yes many were writing that then!).

So Anon, you say you turned more optimistic in 2001, but I was the opposite. I thought it would take a long time to work off all the malinvestment. Little did I know a bubble replacement was in the works.

Now do not confuse macro views with short window views. I knew housing was going up and would continue to until a blow off top, so you could say I was "optimistic" on home prices, but pessimistic on the ramifications to the economy. That's why I was piling into gold and silver from 2002-2004.

I am not optimistic now. Anon may well be right that we are near "the bottom" and I may even agree. What I think we will differ on is how long we stay at the bottom. Just because you have stopped falling does not mean you are going to go up. I do not have time to cover all the reasons for my views, if you read regularly you know the imbalances of which I speak

Anyways, I hope that both answered Anon's question and was worth a read in the process. I do not pretend to know everything I just offer my take.

Linkage
Trolling the Internets (both of them) for the best reads out there so you can all save time.

Official World Gold Holdings and the Evolution of Global Trade and Wealth
The sharp as an obsidian scalpel Jesse starts off with some gold related ideas and then expands into some key ideas you should be aware of.

Q4 GDP: Beware the Blip
Calculated Risk could have saved CNBC all the breathless amazement at today's GDP number. Hint: it's a one hit wonder.

We are Screwed - The State of the Union
Reader C-T let go on a great missive that is worth a look. Great point:

More and more of the American middle class are joining the race to the bottom, entering the ranks of the poor every day. Food Stamps and other entitlement programs have replaced the food lines of the Great Depression.

To which I responded:

Why is it nobody gets this? They all say "In the Depression there were food lines" well WTF do you call millions on food stamps? I call it moving the line out of sight.

Indeed.

Wall Street Reform and the Federal Reserve
Sharp take on some historical facts about the FED, the US dollar, fiat currency, and much more from Sonicninjakitty.

The blogroll on the left (on the right for those of you in the southern hemisphere) has plenty to read on a news filled day as well.

Friday Night Entertainment
I was sidetracked most of the day exchanging emails with a trader friend of mine who was playing TNA for the morning pop then sold off to avoid the after 11am downdraft. TNA is an ETF so get your mind out of the gutter! Anyways, plenty of good fun this evening.

I am Not Making This Up
Sometimes real life is better than make believe!

Headline:
Christina Fernandez, Argentinian President, Says Pork is Better Than Viagra for Sex Life
The best looking president in the world shared her input on the other white meat:

Argentinian President Cristina Fernandez has told a gathering at her Presidential Palace that pork is even better than Viagra for spicing things up in the bedroom - and credited a satisfying weekend with her husband to the meat.
"I've just been told something I didn't know, that eating pork improves your sex life," she said in a televised speech to the leaders of the Argentinian meat industry, "I'd say it's a lot nicer to eat a bit of grilled pork than take Viagra."
Speaking of a weekend spent with her husband after eating the meat, Fernandez said, "We were in high spirits the whole weekend... I'm a pork fanatic."

For Valentines day gentlemen, may I suggest some flowers, some candy, and some bone-in pork chops? You never know!

Bookshop
Loyal reader and literary sage Gawains suggested some works this week:
-"Exiles" by Ron Hansen which looks very compelling
-"Imbibe" by David Wondrich and with a title like that it is going in my Amazon basket!

And no I do not get anything from Amazon, no affiliation.

I will throw in a book passage:

"In addition to believing that my brother's book deserves to be read, there is another reason for having it published.
Frankly his story is incredible. No matter how I try, I can't believe it. I hope its publication creates the possibility that someone will. For myself, I can accept only one aspect of it-but that I accept completely: To Richard, this was not a work of fiction. He believed, without question, that he lived each moment."

Prologue for "Somewhere in Time" by Richard Matheson.

Funny Picture
Naked Capitalism offered this choice picture:

Be sure to drink your ovaltine!

This is running long, so here we go....

Rock Blogging
Take a chance, come on and dance
Guys grab a girl, don't wait, make HER TWIRL
It's your world and I'm just a SQUIRREL
Trying to get a nut to move your butt
To the dance floor, so yo what's up
C&C Music Factory!

Where to start? Ok, when I was young I used to see those TV commercials that had those huge compilation albums for sale and the titles would scroll on the screen and soundbites were played. I always loved the song by the Moody Blues, "Knights in White Satin" and it was on every one of those albums:

Nice!

Some requests?
Gawains wonders if I like country music, and I of course grew up on folk and country music and my Dad's 12 string guitar! Try out David Allen Coe with "You Never Even Called Me by My Name":

My position is I don't care what the ladies call me, as long as they call me!

I had never heard The Police tune "Synchronicity" and lets say I found it interesting:

My wifes dream man has been Sting for years!

From a late comment from last post I was challenged to post a song with just some lyrics to go on. I KNEW one song right off the bat, but I also weaseled out and did a search and now I am stuck. Best guess, is Michael Damian's "Rock On" but the older version is better I think (plus I had help!). Try out David Essex and "Rock On":

Thanks!

Editors picks? Ok.

In line with the "not in one calendar year repeat unless special circumstances" rule, enjoy the greatest metal singer going it alone with "Tears of the Dragon":

I still get chills on that one.

Last Call!

Get loose, get crazy and get wild with White Snake and "Still of the Night":

Unreal!

Have a good night!