Its deja vu all over again: It seems that way too often, the hope of "the Fed’s finally finished" raises expectations of a pause. We saw that on Wednesday, the best one day performance since 2003. Alas, it was all given back by Friday. These short covering/one-day wonders must be becoming quite tiresome to those poor souls who believe in them.
No matter: The economy is terrific, there is no inflation, earnings are great, Iraq is a democracy, oil prices are dropping and peace is due any minute in the Middle East. Oops, my bad; That must have been some incumbent’s press release.
Back in real world, there are real concerns which need to be digested. Its a rainy weekend in NY, and that means an extra long survey of many of them in our weekly linkfest:
• Are we placing too much blame on Bernanke? After all, he merely inherited a bad economic set up. Slowing growth, rising
inflation, high energy costs, a real estate dependent economy, and the
longstanding problem of excess liquidity — none of these rest at the
feet of the present Fed Chair. In reality, they are the result of what
Tim Iacono charitably describes as The Mess That Greenspan Made.
• The most egregious Fed Chair critic is Kentucky Sen. Jim Bunning (R). He called Bernanke an "amateur" and "blasted the former Princeton University professor for unnerving markets with his anti-inflation rhetoric." Perhaps the Junior Senator from Kentucky needs to be reminded of his own record: in his rookie season with the Detroit Tigers, he hurled a lamentable 6.35 ERA.
• Was Wednesday anything more than a Sucker Bet? so far, that seems to be the case.
• Real Estate moved front and center this week:
-The Fed Chair mentioned in his prepared remarks that the slowdown in Housing was "orderly."
-Barron’s Alan Abelson quotes D.R. Horton CEO Don Tomnitz as saying Housing downturns are "longer and deeper than we’ve imagined" in Eyes Wide Shut (If no Barrons’, go here)
-The NYT exhorts us to "Keep Eyes Fixed on Your Variable-Rate Mortgage" (They were kind enough to provide me with this interest only national map from their print edition);
- The latest Headache For Homeowners: Inflated Appraisals
-These are the best places to live in America;
• The Middle East is causing all manner of consternation. The Op/Ed pages of American newspapers are rife with fascinating and thoughtful analyses — (I am aware that this may quite possibly be the first time that sentence has ever been written).
In the WSJ, Middle East Scholar Fouad Ajami writes Lebanon is Hostage to Hezbollah via Iran and Syria. In the New York Times Ted Koppel (Yes, THAT Ted Koppel) addresses the question Are the Israelis over-reacting in Lebanon?:
"Perhaps they simply perceive their enemies’ intentions with greater clarity than most. It is not the Lebanese who make the Israelis nervous, nor even Hezbollah. It is the puppet-masters in Tehran capitalizing on every opportunity that democratic reform presents. In the Palestinian territories, in Lebanon, in Egypt, should President Hosni Mubarak be so incautious as to hold a free election, it is the Islamists who benefit the most."
In the Washington Post, George Will writes the Weekly Standard — "voice of a spectacularly misnamed radicalism, "neoconservatism" — is "so untethered from reality as to defy caricature." The Cato Institute concurs. Is National Review next? Some people are surprisingly thrilled about the situation — it means the Rapture is nearly here.
As to the financial repurcussions, consider these possibilities:
-Businessweek: The Mideast’s Economic Fallout
• With all eyes on the Middle East, you may have missed this: Has China’s Yuan Tinkering Changed the Global Economy? (it was the anniversary of the unpegging)
• Some interesting ideas came forth this week from the world of INVESTING:
Random Walk and Outperforming Fund Managers (or whats left of the efficient market hypothesis)
Citigroup’s Geo-Political Risk calculator
In case you missed it, Warren Buffett on Charlie Rose
The trading doc advises Making friends with market emotions;
• Option Options Options!:
Last week, I noted how offended I was at the 9/11 option grants; Surprisingly, some defended the practice, so I advised them to form an "Apologist’s Fund" and to use their own dollars in a 9/11 Options Grantee Investment.
Some interesting Tech and Science items:
Way cool: The Biomedical Image Awards 2006
PEW: Bloggers: A portrait of the internet’s new storytellers
Geek to Live: Top 10 free and cheap productivity tools
Cool Google maps mash up of the most popular books by city
Do you have Netflix Guilt?
A MySpace backlash has begun: The Register notes the social networking site’s advice to musicians, a huge provider of content: Sell more tdhirts shirts
• A week like this needs lots of Funny; we have it for you in spades:
Ask A Ninja Reviews "Pirates of the Caribbean" (Not Safe For Work)
the laugh-out-loud funny Secret Diary of Steve Jobs, Aged 51 1/2
Brilliant mashup of the Monty Python’s "Knights of the Round Table", as performed in Star Trek
Chad Vader – Day Shift Manager (episode 1)
And the astonishingly foul mouthed but incredibly funny edit of The Big F@#*^% Lebowski (Definitely NOT SAFE FOR WORK — it’s nothing but curses)
Regular readers know I’ve been a big fan of Entourage since day one. But HBO has also been running lots of older classic movies latetly: Animal House, North Dallas Forty, L.A. Confidential, 48 HRS, Houseboat, Field of Dreams — perfect for a rainy weekend. (And if you haven’t seen Monster-in-Law yet, do so — just for Wanda Sykes performance )
And that is all she wrote.