Nationalization of Home Prices Not Far Away

Hello out there. Sorry for the spotty blogging, but I have been very busy at work, in the garden, using the new grill, and getting the fishing gear ready. I need to buy a new spinning rod this season so I get to buy a new St. Croix rod, my absolute favorite fishing pole ever made.

Thanks for the comments. I always thought that loyal reader G's letter G stood for "Gold" but perhaps he can elighten us otherwise?

Gold Getting Hammered
I sold out all of my gold and silver miners a while back, pocketing a nifty 160% profit. I have only been lightly following the gold price, but today was another beating. Over at The Mess That Greenspan Made Tim Iacono has a mid year price of gold and oil contest running. I have gold at $870, and oil at $98. Seems like I am going to be close for Gold, but WAY off for oil.

With the dollar catching a bid as of late, gold was sure to go down a bit. The current "stagflationary" environment may mean that thr gold rush is over, but I would expect most of the price of gold above $800 to remain intact. Should Gold get down to the $800 mark, I may be a buyer, and you know how much of a chicken I am!

FED Balance Sheet; Starting to Resemble The US Consumer's Balance Sheet
Calculated Risk had a graph that was presented by Janet Yellen (San Francisco Fed President) and it was a real good view into where the FED is headed. Just like the US consumer whose savings rate has been zero for some time, soon the FED will have lent out all their moolah in an attempt to bailout wall street. Take a look:

All the pretty colors represent all the assorted lending facilities in use by the desperate FED. Take home point: When the grey color of the graph is gone, the FED is going to have to go out and get some more money from someplace to keep helping the financial system avoid a "systemic collapse" or something. That cash is going to come from you, me, and the children of the future so millionaire bankers can stay millionaires and not have to take smaller limos. Imagine having to downsize your limo? The Horror!

The Next Bailout - SUV Prices in FreefallAll across the nation the same kind of blind fools that purchase huge SUV's are now trying to dump them for better mileage vehicles. The huge influx of SUV inventory has depressed used SUV prices, and thus are affecting new SUV prices as well. Prices offered can be as much as 30% lower that "bluebook" value at a dealership trade in.

So I have a proposal. Seeing the big push to bailout mortgage jokers has now been accepted as the right thing to do, how can we in good conscience leave these strapped SUV loan holders to endure a financial loss? Where is the bailout plan to save the vehicle market form "systemic collapase"? I mean, a car loan bailout must be smaller than a mortgage bailout, so why not?

Nationalization of Home Prices Not Far Away
Final thought for this evening. Even Nouriel Roubini is in favor of major move towards nationalization that the Barney Frank bill gurantees. Makes me want to puke. The reason why no plan has worked so far (Hope Now, CFC reworking, others) is because to make the plan palatable to the taxpayer and the more fiscal conservative of the government, the plans all have qualification criteria. The problem with that is any plan that will omit home flippers, fraud mortgage borrowers, and people that cannot afford the home at any loan structure is GOING TO MISS ALL THE PEOPLE LOSING THEIR HOMES. By definition any plan has to have some sort of rescue plan for the worst offenders of the housing bubble. Nobody seems to get this.

The next step is of course to put some kind of a floor under home prices. Price controls always work well. There was that time..., oh nope there never was. We are moving closer to a point where the FED, FHA, and you and me will basically write a new loan for all the losers out there for about half the original balance, have the new mortgage rate at about 3% fixed, and allow repayment over 50 years. Can't wait to see it.

Have a good night.

JP Morgan CEO Dimon Translator: "I Have No Idea What is Going On"

Well I went with a propane gas grill. The ease of use was the decider. I have successfully made dinner for two nights now using the new grill and I am very happy to have it. Much too long I was relegated to electric cooking hell. Flames are the only way to go when cooking meat. A little short on time tonight, so just a quick post.

JP Morgan CEO Dimon Translator: "I Have No Idea What is Going On"
When JP Morgan won the Bear Stearns FED bailout prize, the media was awash with glowing reports of CEO Jamie Dimon's amazing smarts and business acumen. I wondered at the time how smart and savvy you need to be to say "Yes" to a Federal reserve forced acquisition. Today Mr. Dimon was out in force giving confusing, contradictory, but amazingly hard number reads on the US economy.

Mr. Dimon estimated that the credit crunch is, get this, 75% of the way done. Why not 70%? 78%? Who knows. I guess he is saying the crunch is three quarters of the way done. Ok, I would say that is not an entirely crazy estimate, but then Mr. Dimon went on to say that the US recession is "just starting"!? Now I am confused.

I may be crazy, but when a recession happens credit gets HARDER to come by, and debt defaults get BIGGER. So if the credit issues are 75% over, but the US is just starting a recessionary period then something is amiss. Perhaps Mr. Dimon means that with the lending tree bank that is the FED the wall street banks have no credit issues! I would agree to that one. Mr. Dimon was also unclear as to how severe a recession may occur. Maybe it will rival the early 80's downturn instead of the baby early 2000 bust. After review of the entire set of stories and comments, I would offer that Mr. Dimon is guessing as much as anyone else is right now. That should inspire confidence.

Take a glance at the news stories today regarding Mr. Dimon's comments. At first the stories all were cheery over the 75% over comment, but after further review of Mr. Dimon's comments and their contradictory nature, the news reports stopped using the 75% figure and toned down the happy language a bit. You have to wonder about the media's objectivity when they trumpet positive news, and then bury poor news. Are you surprised?

Have a good night.

Tyranny of the Minority

Rain has arrived here in Massachusetts. Wonderful. I am in the market for a grill, so if anyone has a suggested model that they like please let me know in the comments. I would prefer a charcoal grill, but the mess and effort involved is more than a gas grill. I just want some grilled steaks! We had electric heat at the old apartment, and the oven here is electric and you cannot cook a good steak without a good gas oven broiler or an outdoor grill. Just my opinion.

Myanmar Relief - A Quick Word
The scale of disaster in Myanmar (Burma) is much larger than I thought, and seems to get bigger as more information is gathered. The major problem with aid efforts is a silly reclusive government that rules it's people with an iron fist. Any severe dictatorship worth it's weight in fascism is well schooled in keeping any outsiders outside, so their fragile hold on power can be maintained.

So what can I, you, or anyone do? I guess try to donate to major relief organizations that are involved. Hopefully the help will get there and not be hijacked by the government for their own personal usage. If I were Emperor of course, I would send 2 aircraft carriers and 3 divisions of amphibious Marines to invade and overthrow the government in less than 2 days. Then maybe the people there could get some kind of reasonable representation going. Instead of helping truly desperate people like those in Myanmar, we are stuck over in Iraq. What can you do.

The Tyranny of the Minority
There is indeed a new bubble to be aware of, and that bubble is the "bailout bubble". Programs of all sorts and acronyms have made the rounds over the last 6-8 months, each getting bigger and more dumb as we go along. The latest was the US House of Representatives passing a bill sponsored by Barney Frank (yes, he is from Massachusetts! Sorry Country!) which promises big time cash for mortgage bailouts, as well as cash to take care of empty homes. There is a speculative mania in bailouts right now, so beware buying any ETF's that specialize in tracking bailouts, we may be near a top!

What has really started to get me aggravated is this desperate rush to save a small number of retards that are in trouble with their mortgages. Let us assume a few numbers just for arguments sake, and yes I know what happens when you assume!

For this discussion, assume that 90% of of all outstanding mortgage holders are current and on time with their payments (I am sure it is higher) so that 10% of mortgage holders are in some stage of default. We will further assume that the entire 10% of late payers will be foreclosed (this would be high).

With that in mind, what the heck is the rush for all the bailout plans? Forget the "systemic banking collapse" argument for a moment, I want to focus on why more people across the country are not OUTRAGED at this blatant money drop for fools.

I think I have an idea. The 90% are mad and upset with the reward system being put in place for irresponsible borrowers. I am sure of it. I am equally sure that those same "homeowners" are terrified that their major asset, their home, will lose value over the next few years. They are only concerned that the bailout plans in effect prop up their home prices. A selfish and understandable desire.

It smacks me as disingenuous as public officials are out in force trying to act like they even care about people losing their homes. They don't. They are concerned with large numbers of voters losing equity in their homes though! If we could make it perfectly clear that these bailout plans will do nothing to stop home prices from falling (they won't stop that) I think the 90% out there would make more noise about the free ride being offered on their backs for the losers out there.

I realize this is subtle difference, but I think it is important to clearly define what is going on here. All the FED help, all the treasury plans, and all the bailout bills have one aim: to put some kind of artificial floor under home prices to maintain calm among middle class voters. Nobody gives two hoots about a bunch of fools getting kicked to the curb. When those curbside dwellers are dragging down the home values however, people care a whole lot. would like to stop the pretending that "preserving the American dream" or "keeping families in their homes" is anybodies main desire. It is not. If it was a fact that taking out foreclosure folks and shooting them dead and burying them in the back yard for fertilizer added $25,000 in garden equity to a home, gun sales would be way up. And yes, Americans are that greedy and craven.

So the current mess is clear example of the "Tyranny of the Minority" as failed flippers, dumb dreamers, wannabe real estate tycoons, and liars are holding the banking system and the home price scale hostage. It speaks volumes about the banking system that it can be this fragile. It says allot about how disconnected from fundamentals home prices became that they can rise and drop by huge percentages over a 6 year span. Both things are broken and both must be allowed to go where they must.

Ok, enough with the heavy stuff! It is Friday night and that means some entertainment, yes?

Here is a scene playing out all across America as adjustable rate teaser loans get reset:

more cat pictures

If you get pulled over for DUI, at least try and stand up during the field sobriety test:


Time for some Music!

One of my favorite bands was Queensryche. Check out "Silent Lucidity":


While I love almost all songs by the Eagles, I especially love "Tequila Sunrise":


Sadly they have already disbanded, but Audioslave for a brief moment showed how great rock and roll can be even today, sample "Like a Stone":


Have a good night.

When You Look at Something in Only One Respect, You Can Miss a Ton

I can see the tops of the turnip plants pretty clearly now. The sunflowers are about 4 inches tall at this point. I still do not see anything from the cucumbers or potatoes yet, and the new grass seed I put down in some areas has not begun to grow either. Maybe all I can grow are turnips and sunflowers? Growing stuff is hard!

Ford and GM are Basically Screwed
I have explained why it is highly unlikely I will ever buy another US designed car again, based on my 2000 Pontiac Grand Prix GTP experiences (water leaks, brakes gone after 6k miles, major water leaks, etc), but I still hold out hope that GM and Ford may one day rise again. I am patriotic after all! When I read a headline like this one today, I wonder if they will even survive the next year or two:
AP
Toyota projects first full-year profit drop in 7 years
Thursday May 8, 9:23 am ET By Yuri Kageyama, AP Business Writer
Toyota projects first full-year profit drop in 7 years on strong yen, sluggish US market

I mean, if Toyota is having a rough go of it, how can GM or Ford expect to have a better shot? I had to chuckle because just this morning there was this story:
Reuters
Ford tells shareholders turnaround gaining traction
Thursday May 8, 2:44 pm ET By David Bailey

What do you believe? That the Ford turnaround is gaining traction while the recession is just starting and even Toyota forecasts bad results, or that Ford is only gaining traction as they run to a cliff to jump off? Always good to see two totally opposed outlooks printed within a few hours of each other.

Do Not Waste Your Time Praising Mr. "I Never Veto" Bush Just Yet
The house has passed an especially terrible bill to once again "preserve the American dream" for a bunch of flippers and dreamers that knowingly gambled and lost. As a refresher for the term "gambling and losing" I refer you to Wikipedia on Flatulence:
"Nerve endings in the rectum usually enable individuals to distinguish between flatus and feces, although loose stool can confuse the individual, occasionally resulting in accidental defecation also known as "wet farts", "sharting", "varting", "gambling and losing", "Leaky Pete" or "following through"

Loosely (haha loosely) translated to housing this means a bunch of fools thought home prices should all be well over a million dollars per home, and that banks for some time agreed to that logic and provided funding. Now that they are sure they were just a bit wrong, they are doing things in their pants out of fear.

President Bush has made all the right statements regarding the bill, and said all the right things if you want him to VETO the damn thing. One problem. He is HIGHLY unlikely to do that. Not in an election year. Not with all the crybaby's involved in the multitude of bailouts. The only way he follows through is because most of the banks do not want this bill. He may surprise me, but I doubt it.

When You Look at Something in Only One Respect, You Can Miss a Ton
In yet another "all clear" sign that the credit crisis is now over, AIG reported "earnings" (also known as losses) and it was pretty ugly indeed:
AP
AIG posts 1Q loss of $7.8B, plans to raise $12.5B in capital
Thursday May 8, 5:32 pm ET By Stephen Bernard, AP Business Writer
AIG loses $7.8 billion in 1st quarter on credit default swap and investment portfolio losses

If the headline was not scary enough, take a look at some great highlights:

• AIG lost $7.81 billion, or $3.09 per share, during the quarter ended March 31, compared with earnings of $1.58 per share, or $4.13 billion, during the year-ago period.
• AIG's combined ratio increased to 96.86 during the first quarter, compared with 87.52 during the year-ago period.
  Combined ratio measures the amount of money an insurer receives from writing premiums compared to how much it spends on claims and other expenses. A ratio above 100 means the insurer is spending more than it earns.
• Separately, the board of directors approved a 2-cent per share, or 10 percent, boost to its quarterly cash dividend, to 22 cents. The dividend will be paid Sept. 19 to shareholders of record on Sept. 5. (WHAT THE F#UCK??)

So it was a tough quarter. Looking at the "combined ratio" measure, I would say AIG has about a 3 point cushion before they become the US post office and lose money as their primary business. Very impressive!

Massive dilution to the tune of 12.5 BILLION in new capital is pretty wild. How does that feel current shareholders? I always wonder who in their right mind would be buying all these AIG (or FNM, MER, MS, etc shares for that matter) right now with zero visibility going forward? You can put your hand down now Mr. Bernanke!

Point three is where I would like to spend some time. An increase in the dividend is puzzling. With AIG having to raise ginormous amounts of capital, what is with a dividend increase? Glad you asked, as it brings us to a sad fact regarding big money funds:

They basically do ZERO research and know less than most about the stocks they buy.

See, AIG is a dividend paying stock, hence plenty of big funds buy it simply because it sports a nice dividend per share ratio. In the midst of a falling stock price, a dividend increase will make it even more attractive purely on a dividend per share price ratio basis. The problem here is that the company is facing serious structural problems. Why give a hoot about a dividend, when the dilution facing your holdings is shaping up to the tune of 20%? There is no reason to get excited, unless you are using some dumb model based on one parameter.

When you stare at something up close too long, you fail to see the big picture. AIG has allowed their stock to remain somewhat higher by precluding a forced sale of the stock by institutions that only hold dividend paying stocks. As AIG is raising new cash at probably over 8%, paying out a paltry dividend makes little sense to a stock buyer. But you would have to think and understand to get that. Nevermind!

Leave Friday rock/entertainment blogging ideas in the comments.

Have a good night.

Must Read Mr. Practical Article

After a couple of very nice days, it is going to rain for 2 days straight. I hope this Spring and summer is not a parallel of all the snow from last winter. One can hope.

Fannie Mae Pulls Things From their Fanny
Imagine you are truly "too big to fail". Imagine you have your hand in a business so deeply, anything and everything will be done to bail you out. If you had that kind of safety net, you may behave and communicate in ways that no other entity could ever do. That is the only way a company can have around 45 Billion in hard capital backing, get this 2.27 Trillion in mortgage obligations. That is too funny. In the face of this, regulators have approved FNM to hold even LESS, yes less, cash in reserve for losses right at a time when FNM is being asked to buy up the latest crap mortgages out there. I am really sure this is all going to end well, really.

Along this line of thought, Minyan Kevin Depew's "5 Things You Need to Know" was dedicated to FNM yesterday, and it was a must read:
http://www.minyanville.com/articles/index.php?a=17042
In the article Kevin used FNM's own charts to show how without a clue the management is. What I loike the best is that even after so called "historical models" have been shown to not work at all when lending standards do not conform to historical stringency, FNM is still using viciously flawed models to estimate losses. In their chart for home price growth (or contraction) in the US chart, their is a ton of fine print at the bottom which harbors a real whopper; Fannie Mae deems sales of foreclosures as non important to their price assumptions! Seriously, enlarge the graph and read the fine print! FNM even states that foreclosure sales cause prices to drop even more than they estimate, but exclude them anyway! I give up. You could not make up a better story. Why this graph and FNM metric is not a huge story amazes me.

So FNM has 45 Billion backing 2.27 Trillion, they are using estimates that are obviously screwed, and they are backed by the US taxpayer. WONDERFUL. I agree the worst is behind us, it is behind us getting ready to slam us from behind and not in a fun way!

Must Read Mr. Practical Article
Sorry to rip things off again! I read a piece form the Minyanville writer Mr. Practical today that captures everything that I think and feel about the current fiasco PERFECTLY. Link is here:
http://www.minyanville.com/articles/S-tax-nationalization-interest-stabilization-citizen/index/a/17062

I am not sure what the rules are for these kinds of things, but I want to make sure this gets seen as much as possible, so here it is:

Fed Chooses Wall Street Over Main Street
"It took from 1914 until November 2007 for the Federal Reserve to accumulate $800 billion worth of Treasury debt. It has taken from December 17 to the end of April for the Fed to divest itself of $260 billion of this portfolio, a decrease of one-third. In its place, it has placed AAA-rated mortgages. At the current swap rate, the Federal Reserve System will be out of Treasury debt in December of 2008. But by adding car loans to the list of eligible paper, the Fed will most likely greatly accelerate this.” - Economist Gary North

To the average person this is gibberish. Perhaps this is why the Fed is able to do what it's doing: slowly nationalize the banking system. The stabilization that everyone is giddy about has its cost. The private market, with the encouragement of the Federal Reserve, has manufactured vast debt that cannot be repaid. Banks used up their capital long ago, so the Fed has to take those bad loans away from them and give them capital back.

Stabilization is not a working banking system. When you hear all the CEOs of Wall-Street say the crisis is nearing an end, it has no implication for a working banking system that will create more credit.

The Fed adds a new twist everyday. Now it's going to pay interest on reserves banks must keep at the Fed. This will allow the Fed to expand its balance sheet even more and buy even more bad loans from banks. Again, this isn't a positive: It illustrates just how bad things are.
By the way, it's the U.S. taxpayer that will be picking up a good portion of this interest they will now pay to banks.

Chairman Ben Bernanke has been given high marks for saving the system. But just what are we saving? The average person does not understand that what they are really saving is the bankers and Wall Street at the expense of the middle-class standard of living. A devalued dollar of 50% hurts the middle class much more than a 50% decline in the stock market. Why not let a failed system fail, thus re-distributing savings and income back to the middle class? Of course, everyone will suffer but in the long run that will happen anyway and saving the system will disproportionally hurt the middle class more.

The system is broken. Every action by the Fed says so. Those that anticipate a shallow recession still do not understand this. The credit crunch has barely begun affecting the real economy. We're in the very early stages of this process and the government wants to boil the proverbial toad (the middle class) as slowly as possible.
Risk is very high.

Nuff said! Perfect encapsulation of where we are.

California City Fails to get Bailout
Vallejo California has announced that the city council has voted to pursue filing for bankruptcy protection due to insolvency. Citing enormous pay for police and fire fighters, as well as escalating pension obligations the city will run out of cash by the end of June.

I think this is a pretty big deal. Huge even. What does this mean for the muni bond markets? Probably not good things. What does this mean for similar California, Florida, Arizona, and Las Vegas cities faced with the same kind of issues? Probably not encouraging things.

Almost right on cue when Hanky Paulson said the worst of the credit crunch was over, this big city default news was out. Funny if it was not so sad. This story bears serious following.

Have a good night.

Oil Prices Are Approaching Critical Psychological Levels

Cyclones blast tiny Myanmar, and a volcano erupts spreading ash over a large part of a Chile town. Natural disasters really show us surface dwellers who is the boss. Scary stuff.

Countrywide Deteriorating Rapidly
Even though the "worst is behind us" in all things financial, CFC's mortgage portfolio has still undergone substantial degradation since January? Now who would have guessed that one? From Yahoo Finance:
AP
Countrywide shares fall as analysts question deal price
Monday May 5, 6:00 pm ET
Countrywide shares fall as analysts predict say Bank of America may renegotiate buyout price
NEW YORK (AP) -- Shares of Countrywide Financial Corp. tumbled Monday as two analysts said Bank of America Corp.'s planned acquisition for the mortgage lender could be renegotiated to a lower price.
Countrywide shares fell 62 cents, or 10.4 percent, to $5.36 Monday. During the past year, shares have traded between $3.95 and $42.24.
Friedman, Billings, Ramsey & Co. analyst Paul Miller said in a research note Bank of America should walk away from its acquisition of Countrywide, or at very least reduce the purchase price, because of continued deterioration in the mortgage market. Miller pegged a new sale price at between $0 and $2 per share. He set his price target for Countrywide at $2.

CFC was a dirty company that will come to be seen as everything that was wrong with aggressive mortgage lending. I have always contended that BAC was not going to be happy with being strong armed by the FED into this deal. Now things are looking weak. I imagine the deal will indeed go through, but there is going to have to be some layoff of portfolio risk. Where is that going to come from? You guessed it! The FED and by extension, the taxpayers.

I am going to offer some advice to banking CEO's that they may want to write down:
BEWARE the FED. The FED's only interest in deal assisting is to provide a smoke and mirror show for wall street. The FED game is one of confidence. The FED does not have either the time or the ability to review in detail whether CFC has value for BAC, nor if Bear Stearns can be reasonably absorbed by JP Morgan. The FED just wants a headline. You, the buyer will be stuck with the residual nightmare. Now maybe the FED will help you out of the mess they got you into, but that balance sheet of the FED is looking ragged right about now. You have been warned!

More Hypocrisy From Washington and their Ilk
Presidential hopeful Hilary Clinton would like a gas tax holiday to help the "struggling consumer" ie potential voter get by the next few months. What a big heart. To pay for the tax break she has proposed big Oil companies pay the tax break from their record "windfall profits". Well there you go. At the same time that plenty of congress fools are trying to get tax breaks for home building companies so they can get the tax they did pay during housing's windfall run back, now we are supposed to grab oil revenues from Exxon and the like? Hypocrisy anyone? High home prices, record builder profits=GOOD, High oil prices, record refiner profits=BAD. You need both housing and energy, yes? So why the different treatment?

Capitalism is dying before our very eyes folks. And as the saying goes, it is dying to thunderous applause. Wall Street, especially the financials, have screwed up so badly that they are cheering on increased FED oversight and loss of independence. The mainstream media wants a recovery story so bad they are willing to allow poor decision making to go unchallenged. The elected official are so hungry for angry voters to vote for them, they are promising the world through money creation and bailouts to buy votes. Truly a sad state of affairs.

Oil Prices Are Approaching Critical Psychological Levels
Oil closed up again, going over $120 a barrel. This is starting to get pretty scary. My psychological test was at $90 a barrel. When crude went over that I remember thinking "oh man, this is going to cause a panic". Of course nothing happened. $100 came and went, and now $120 is staring at us. What would cause a panic? $200? $150?

If oil continues to be at the head of all the news casts and headlines, eventually confidence MUST be influenced. This is a strange time. Most economic indicators are solidly in areas where past panics and recessions have ensued, yet there is a visible attitude of "all is well" out there in financial land. Maybe it is just whistling past the graveyard. Maybe I have no idea what I am talking about. Both possibilities are about equally likely, but both cannot be right.

I am struck by how strong the desire is out there to be optimistic about various things. Oil is becoming a major threat to that mindset. With all the FED bailout plans and emergency lending tricks have created a new bubble, a bubble in sentiment? If oil at $120 means nothing bad in a macro sense, then you know folks are pretending hard. It is shaping up to be a LONG summer.

Have a good night.

Back at It

Good to be back home! As much as Massachusetts drives me nuts, I always love to come home after a vacation. Jamaica was nice. Very hot and more humid than I would have thought. The sun is very strong as well and I got my first sunburn in about 5 years on Wednesday. The garden looks reasonable. The turnips I planted have the leaf tops emerging from the ground, the sunflowers are doing the same. Nothing from the potatoes as yet, and ditto the cucumbers. We will see.

The Week That Was
So Bennie Bernanspan did the 25bps cut to a FFR of 2%. The markets at first seemed to hate the move, and then on Thursday morning the markets seem to love it! Very schizophrenic of 'em, yes? Here is a 5 day DOW chart for last week:



That was quite the rocket ship move Thursday! The accepted reading of the FOMC statement was that the cuts are done now, and right on cue, as predicted here, the new found optimism was based on the idea that the FED must know all is well to be stopping the rate cuts. Seeing that the FED was totally wrong about basically everything related to the crisis up till now, why on earth would anyone place any credence in rate cut stoppage now? I dunno.

The FED is chasing their tale and looking ever more foolish every day. During the past week Mr. Bernanke rebuffed calls for the FED to step into the student loan arena, only to do a total intervention 2 days later! Whatever guys, seriously.

In other events, the dollar has been on fire and of course gold and silver are getting nasty hit. Why the dollar is rising here I have no idea, but that's what makes it a horse race. I mean, a stronger dollar because the FED may leave rates at 2% instead of cutting another 5obps maybe? Big deal. It kills me to see the metals getting whacked, but I am too wary to buy any at this time. I am a big chicken though

Microsoft Drops Yahoo Bid
Word is out tonight that Microsoft has pulled their enhanced bid for Yahoo. About time. MSFT made a reasonable bid, Yahoo wanted more, move along. I wonder how this will play out tomorrow.

Book Suggestion
I read Jack Finney's book "Time and Again" over vacation and all I can say is that you must read this book immediately. What an amazing work. I read tons of books and this one was truly wonderful and original. I have just bought the sequel "From Time to Time" and hope it will be great as well.

That's all I have for tonight, still not back into the groove you know? I plan to have a complete post tomorrow.

Have a good night.