Weekend Linkfest (Nor’Easter Version)

Good morning, and welcome to this week’s edition of the Linkfest. So much happened this week that we will be ranging far and wide today. Put on your sprinting shoes — or, if you live in the NorthEast, your snow boots — cause we got some ground to cover.

Economists say Fed Chief Bernanke should establish his credentials as an inflation fighter — but their average forecast puts rates no higher than 4.75% this year, a survey finds. Of course, most economists have gotten inflation ass-backwards.

• The 30 year Bond (a/k/a "The Bond") returned this week to surprisingly strong demand. The thirst for US long bonds heralds steeper inversion;

• On the subject of Bonds: Legg Mason has Passed PIMCO in Fixed Income Assets;

• Yahoo Finance has an excellent overview of Why Americans Aren’t Saving. MSN MoneyCentral points out that the Rich are getting richer faster. And Slate’s Dan Gross calls the "ownership society" a bust. And for the econ wonks out there, check out this Federal Reserve research on the impact of The Decline in Household Saving on the Wealth Effect.

A consumer 3play: Doug Kass notes the Consumer is increasingly leveraged; This is important due to the consistent relationship between consumer spending slowdowns and bear markets; If you want an early warning prior to a Consumer Spending slowdown: Watch Real Hourly Earnings.

• I participated in a fascinating discussion on Economic Dark matter at the WSJ: Is ‘Dark Matter’ in the Deficit? (How often do you get to call a pair of Harvard Economists idiots?);

Is the Party Really Over For the Housing Boom? Perhaps not.

• I’ve been annoyed at Citibank’s odd Panic/Euphoria gauge (here and here); Apparently, I’m not the only one: Barron’s Mike Santoli notes the barrage of criticism, and gives Citigroup’s Tobias Lefkovich an opportunity to defend the indicator (Barron’s is free this week);  An easy fix for the indicator is at the end of this;

• While many of President Bush’s appointees have been highly criticized, his Economic appointees (Federal Reserve, CEA) have all justifiably received universal accolades. That is, until a recent "Out of Left Field" Fed appointment drew jeers.

• Fuel for the Windfall Tax crowd:  Exxon Mobil spent more money in 2005 buying back stock than it did on capital spending, exploration and research and development. (They are just beggin’ for trouble);

• I have discussed the 4 year Presidential Election Cycle (most recently, here). A recent academic study confirms its validity:  Presidential Elections and Stock Market Cycles;

Thomas Friedman argues our SUV lovin’, fuel wastin’ ways — and $65 Oil — is why Iran will eventually have the bomb.

The Seven Sins of Fund Management (pdf);

• Smith vs.Darwin:  Is the Invisible Hand just so much more Intelligent Design?

If home prices fall, rents may fuel inflation

• Need some software written? Rent a coder!

• Some good reads:  A well regarded book on Index funds is online for free; What looks like another interesting read — Ahead of the Curve — has extensive charts and excerpts online; I just started Confessions of a Wall Street Analyst — and so far, its terrific;   

• Lots of market commentors (Rev Shark, Myself, Doug Kass) like to use pithy quotes to make our point. Now, there’s an entire blog dedicated to just Trading Quotes;

• Ever since Curb Your Enthusiasm began, I discovered two things: That Larry David really is George Costanza (the character is no longer a parody), and knowing this makes the original Seinfeld series is even funnier than before;

• An interesting trend in music? All female hard rock cover bands;

• The more things change: Last year’s critical darling Clap Your Hands Say Yeah, sounds intriguingly like David Byrne and Talking heads — circa 1979. I like it, but then again, I’m a huge T-heads fan;

•  The Falling Sand Game (Warning: an amusing but colossal time sink);

That’s about all from suburban NY, where a Nor’Easter’s acomin’ — and I am well stocked with hot cocoa, Godiva Chocolate Liquer, and more DVDs than I can possibly watch in a weekend — including The Aristocrats. Tag line: "No Nudity, No Violence, Unspeakable Obscenity".

Let the blizzard begin!

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  1. KirkH commented on Feb 12

    Since you seem relatively bullish on housing, does it make sense to state your position in the RE market just like you do with equities?

    If median wages are stagnant but home prices have doubled or tripled in much of the country in the last few years what is your argument for this disconnect? Why doesn’t income matter with regards to home prices any more? If inflation is higher than the numbers show aren’t rates going to continue to rise putting pressure on the billions of dollars of “exotic” adjustable rate loans?

    Also, what’s your take on Austrian Economics? Was Rothbard just a crazy gold hoarding idealist or is the Fed really as bad for the economy as they say? Great blog by the way.

    BR: All my RE stuff is here:

    RE may be extended and eventually pull back, but I doubt its a bubble

  2. B commented on Feb 12

    WTF was Bush thinking with this Fed nomination? There is a putrid stench of cronyism with this foolishness. It appears from a few comments that no one “in the know” even knows who this guy is. Huh? This is 10x worse than Harriett Miers.

    I razz economists alot as it pertains to market timing but let’s get serious. I have to think there is a very rich bed of wisdom and talent for these very elite positions. If you are ten years removed from college, have no formal economic training, have written no research papers, have done no ground breaking work in economics, have not led any business and have no crisis management experience and are basically a kid, how in God’s name can you be considered for the Fed? If it isn’t going to the a PhD in economics, at least pick someone like Rubin.

    I’m sorry, but there is so much potential shit that can hit the fan in the next ten years that I want a bunch of grey hairs running the Fed. There is no substitute – WISDOM.

  3. muckdog commented on Feb 12

    I suppose I’m still in the “idiocy” camp on inflation. To me, the core rate is all that matters because energy just isn’t as large of a hit on folks (or businesses) as it was in the 70’s. People make adjustments to compensate. Either they conserve or they spend less at the malls. The latter certainly isn’t inflationary.

    (I was just checking my therm usage year over year, and I’m down about 15% due to increased conservation. Fleece, fleece, and more fleece! Sure, the bill seems about the same. On fuel, I’ve taken mass transit and carpooled more than in previous years.)

    Regarding unemployment rate vs labor participation rate, I’m not sure why folks have “dropped out” of the workforce. I’m not sure that’s a valid measurement, because who knows what their reasons are? Maybe they made $500,000 on their home sale. Maybe with extended unemployment benefits, folks are taking a break from job searching. Or maybe one person in a couple decides to stay home with the kids instead of forking out cash to a daycare center. Or maybe they’re spending their time researching lotto strategies instead of gaining new job skils. Who knows?

    I think the wage pressure is coming because the labor market is tight. I see it when I interview folks for IT jobs at my Fun Factory. We’re just not swamped with qualified applicants like we were a few years ago. We’re getting the dregs again, like in the late 90’s…

    Lots of great links, BR.

  4. Barry Ritholtz commented on Feb 12

    If you want to know about the PCE Deflator, ask an economist.

    But don’t take my word on it — if you want to know about inflation, try asking a housewife or cab driver.

  5. muckdog commented on Feb 12

    All this talk about raising the minimum wage or creating a living wage baffles me. In the cities that have a “living wage,” aren’t other wages pushed higher? Isn’t the cost of living much higher in these cities? Maybe a reason the cost of living is higher is because folks make more money.

  6. todd commented on Feb 12

    The “rent may go” up article from the Dallas Morning News makes no sense. If there is a bigger supply of available housing and a higher demand for renters, prices are going to have to come DOWN to attract tenants. It’s amazing to me how many market savvy people have no grasp of the fundamentals.

  7. NN commented on Feb 13

    Talking Heads-This must be the place!!!!

    Little OT but that song really gets me going and its part of the soundtrack to a great movie!

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