Week in review

Quote of the week

“When economic growth results from saving, investing and hard work you can describe it in terms of ‘cause and effect.’ But if you ever get economic growth simply by spending money, you can only refer to it as an act of God…or the devil. Black magic, maybe. Voodoo economics.” – Bill Bonner

A Century of Bipartisan Tyranny

by Tom Mullen

“Like Democracy, ‘Bipartisanship’ is now held up as an ideal and an end in and of itself. It would seem that no matter how ludicrous or destructive a policy might be, it must be just and beneficial if both major political parties agree that it should be law. Implicit also in this reasoning is that a truce between the two rival gangs in Washington, D.C. on any particular issue represents the consent of the governed for that policy — a fallacy that is becoming increasingly exposed as the American people begin to take to the streets.” more…

The Optimistic Thought Experiment

by Peter A. Thiel

“In contrast to the divergent future worlds of globalization, all versions of anti-globalization are incoherent. Of course, one can imagine various details: less trade and travel; more robust boundaries; the elimination of ngos; and a turning back of the clock, so as to restore cultural institutions that are in the process of breaking down. But the pieces do not add up, at least not on the level of the whole world. By its very nature, anti-globalization cannot be a global political agenda. Every worldwide conference or gathering of anti-globalization activists or politicians necessarily dissolves into self-contradiction — or worse, becomes a deceptive cover for some bad version of globalization, such as a worldwide communist revolution.” more…

Hope Equals Truth About Our National Bankruptcy

by James Howard Kunstler

“Obama’s actions in the face of an epochal finance fiasco and economic collapse are a mere extension of the pre-January-20 policies, carried out by much the same cast of characters.” more…

The Capital Well is Running Dry and Some Economies Will Wither

by Ambrose Evans-Pritchard

“Unless this capital is forthcoming, a clutch of countries will prove unable to roll over their debts at a bearable cost. Those that cannot print money to tide them through, either because they no longer have a national currency (Ireland, Club Med), or because they borrowed abroad (East Europe), run the biggest risk of default.” more…

The Nuttiness of Negative Interest Rates

by Robert P. Murphy

“In his April 18 New York Times op-ed, Harvard professor (and Bush adviser) Greg Mankiw calls on the Federal Reserve to promise future inflation, in order to fix the economy. Mankiw’s article beautifully illustrates what is wrong with today’s economics profession: it consists of very sharp guys (and gals) who can develop interesting models that spit out policy recommendations that would destroy the economy.” more…

In the news…

  • Here’s Mercatus Center’s (of George Mason University) freedom rankings for 2009 for the various states in the union. Actually on a side note, learn about George Mason. He participated in the Constitutional Convention of 1787, but refused to sign onto its product.
  • A study from the Federal Reserve puts the “ideal” interest rate at -5%. Yup, that’s a negative sign.
  • ReactOS 0.3.9 is released.
  • Here’s a statement on the flu from the WHO. I don’t buy it, but as a thought experiment, this is a rather sinister take on all of this.
  • A $3.4 trillion budget as been passed by Congress.
  • Here’s a nice bit on the buzzword of the year, “cloud computing”.
  • HR1207 (The Audit the Fed Bill) has 112 co-sponsors!
  • April has been Iraq’s deadliest month in a year.
  • You can join the NRA for free for one year, here.
  • Supreme Court Justice David Souter will retire.
  • You can “hire” a herd of goats to “mow” your lawn or eat your weeds.

Other stuff

  • Here’s a flash game called Debt Ski. It’s kinda fun. It’s supposed to help teach kids about money management.

And now the numbers…

DOW Jones Industrials – 8,212.41 (+136.12/1.69%)
S&P 500 – 877.52 (NEW)
VIX – 35.30 (NEW)
CSI 300 (China) – 2,622.926 (+50.038/1.94%)
BSE 500 (India) – 4140.42 (-21.06/-0.51%)
MICEX (Russia) – 920.35 (-2.64/-0.29%)
BOVESPA (Brazil) – 47,289.531 (+517.742/1.11%)
RICI – 2611.86 (NEW)
Gold/oz – 888.20 (-25.90/-2.83%)
Silver/oz – 12.50 (-0.44/-3.40%)
Copper/lb – 210.10 (+5.10/2.49%)
Oil/bbl (Brent) – 52.85 (+1.18/2.28%)
Wheat/bu (CBT) – 570.00 (+26.75/4.92%)
Corn/bu – 413.75 (+28.00/7.26%)
EUR-USD – 1.3272 (+0.001/0.08%)
USD-JPY – 99.115 (+1.94/2.00%)
USD-BRL – 2.174 (NEW)
3 Month Treasury – 0.14 (+0.04/40.00%)
2 Year Treasury – 0.91 (-0.05/-5.21%)
10 Year Treasury – 3.15 (+0.16/5.35%)
30 Year Treasury – 4.07 (+0.19/4.90%)
U.S. Public Debt – 11,238,592,141,958.59 (+53,669,479,095.80/0.48%)
Baltic Dry Index (BDIY:IND) – 1806.00 (-67.00/-3.58%)

Interesting week, eh? Swine, err was it H1N1, influenza abounds. Or so says the hype. Then again, who knows what will happen. The prospect of a major pandemic is pretty freaking scary.

Looks like Chrysler will declare bankruptcy. Meanwhile I hear that GM will no longer be known as General Motors, but rather Government Motors… That’s a joke.

As I have been mentioning for a few weeks now, I have finally made some changes this week on the numbers. The Wilshire 5000 is gone, replaced by the S&P 500.  I also pulled in the VIX, which is a measure of volatility in the S&P 500.

On the commodities side: the Rogers International Commodity Index (RICI) has been added. Yes, Rogers refers to the billionaire commodities investor (speculator) Jim Rogers. Copper, wheat and corn have all had their decimal point shifted two places to the right. This puts the data inline with the way it is reported elsewhere. Not sure why I shifted it to begin with… oh well.

Currency symbols have been changed to use the established convention. EUR-USD simply refers to the number of US Dollars you can get for one Euro. Similarly USD-JPY refers to the number of Japanese Yen you can get for one US Dollar. BRL refers to the Brazilian Real. I’ve marked USD-BRL as new because I was previously reporting BRL-USD. Established convention is to report USD-BRL. As a note downward motion in XXX-USD indicates dollar strength, while downward motion in USD-XXX indicates dollar weakness. The Chinese Yuan has been dropped until the Chinese allow it to float. That said, I’m not holding my breath for it entering back on the list anytime soon.

The Fed Target Rate has also been dropped.

There may be more changes next week!!! I am developing more and more of an interest in commodities, so that will probably influence my choices. The Australian Dollar is high on my list as Australia is a big time commodity exporting nation. Speak of commodities, it appears China is stockpiling all kinds of stuff: gold and rubber to name two. They have a boat load of dollars, so I guess they gotta spend ’em on something before their no good.

Well that’s it for this week. Have a great weekend!

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