Posts Made By: Paul Kammueller

The question I have is, who tastes it to make sure it's "sweet"?

At any rate that sweet crude is getting increasingly bitter as it extends its run past $100. And now that OPEC sees that we can 'survive' $100 oil they have no interest in increasing production, citing a plentiful supply of production. And all the while the Fed keeps cutting rates.

Now Bernanke and OPEC have access to all the same information we do. Everyone knows what commodity prices are doing. Do they believe those prices are about to break, or is the Fed simply putting recession priorities so far ahead of inflation priorities that they are blatantly risking an inflationary explosion to avoid a recession (or avoid a particularly deep one)?

What's amazing is that the treasury markets are basically pre-bidding the short yields down, increasing the odds of a .75 -- while muni bond auctions continue to fail and the bid yields skyrocket... there is some serious cognitive dissonance in all of this yield action, perhaps symptomatic of a relative scarcity of capital to bid on fixed-income securities while most of the "active money" is currently chasing commodity futures.

If this condition continues, it will at some point trigger a market-initiated general rise in interest rates which will trump any Fed action (but more likely it will presage it) -- and it may be just that which ultimately causes commodities to break. If the runup in commodities continues, the nature of things will be to bid up bond yields until things break.

So Bush vetoes a bill making torture illegal, surprise surprise. Nothing like sending mixed signals to the world while you're waxing idealistic about 'spreading democracy'.

I honestly never thought I'd see the day when politicians, here, in America, would speak of things in such a manner. If we have reached the point where publicly declare that we NEED torture to feel 'safe', then we are finished as a nation. This is the most abysmal, embarassing and depressing form of 'leadership' there is.

http://www.cnn.com/2008/POLITICS/03/08/bush.torture.ap/index.html

One thing that's puzzling me is how the soaring oil prices are not being confirmed by the oil stocks. Here is a 38-year chart of Exxon-Mobil, on a logarithmic scale and sheared to trend-normalize the chart. Recent highs were near the top of the channel.

So yesterday I posted something cautiously optimistic and in response Bear Stearns nearly sunk the U.S. financial system. I want to apologize to everyone for jinxing the global economy. 8O

So in the tradition of the Panic of 1907, J.P. Morgan once again rides to the rescue, backed this time by the Federal Reserve. It's obvious the reason they're doing it is because they literally can't NOT do it -- a collapse of Bear Stearns would force a huge wholesale dumping of mortgage-backed and other securities onto an already stressed market. Bear Stearns controls 350 billion in assets. It would be a systemic financial meltdown.

Question is, what does 28 days of financing GET them? They say to convince their customers, etc. that they're worthy and not be afraid -- but doesn't a short-term bailout just send the signal that all of their creditors and customers have just 28 days to get their money out?

I'm thinking some kind of breakup or long-term government bailout and restructuring will have to occur and the 28 days really just gives all the parties time to figure out what the structure will be.

The larger question of course is, how many others of these are there?

Eerily, once again The Carlyle Group (historically the private equity firm of the Bush family, the bin Laden family and other global market players) is at the center of it all. Speculation of Bear Stearn's collecting worthless collateral from the Carlyle Group triggered the rampant speculation that led to the sudden shutdown of Bear Stearn's access to short-term capital lines. But that's a matter for another forum.

Is it just my imagination, or has anyone else noticed how credit-card solicitation junk mail has just suddenly STOPPED?

Candidates typically run on platforms based on the positions they stand for, not for precise predictions of what will happen on the date they take office. They typically say what they will push for and stand for, I don't recall any of them claiming supernatural powers over the opposing party.

Your claim might make hold some water if the dems had gotten the white house or 2/3 majorities in both houses. But that is not the case.

I do not recall ANY dem candidate claiming that they will personally end the war regardless of republican stonewalling. To classify them liars requires that you assign them prescience about the precise numbers of congressional makeup resulting from the election. Not knowing the precise numerical outcome of future congressional elections doesn't make you stupid. It makes you normal.

And think about it: if the minority party (be they republicans or democrats) always ran saying, "Vote for us, we're in the minority so we won't get enough votes to do anything but vote for us anyway", well we'd descend into a one-party system really quick and we could do away with elections altogether. But that seems to be what you believe the minority party (whichever party it is) should run on?

Face it: the neocons decided in 2003 to make Iraq into the showroom-centerpiece of modern republican thought, and do it with a force size that defied all military convention, just to prove to those silly peaceniks how cheap, easy and painless the war and occupation would be. But such hubris carries a great price by maximizing risk, and now we're all paying.

The people are done, that's all. Deal with it.

The decision was Michigan's and Florida's, not the national dem party. The Michigan and Florida dem primary planners made a conscious decision to void their own states' votes when they went ahead with their primaries anyway after being forcefully warned in no uncertain terms of the ultimate result. Not being recognized by the party, a primary isn't a primary but rather an informal poll. The Michigan primary wasn't even that, being a primary with only one candidate on the ballot.

If the party had caved and given them back the full validity of their invalidated primaries, the next election cycle would be pure chaos. Once you send the message that breaking the rules has absolutely NO consequences, you can forget about maintaining any semblance of order to the electoral process.

The half-vote was a gift to make them feel better about having messed up their own states' primaries. It gives them some voice, without fully rewarding them for breaking the rules. This is the art of political compromise, and I wouldn't expect political polarists to be able to comprehend it.

Generated this chart from tables at eia.gov, sorry no years showing but the last April is 2008 so count backwards from there... blue line is 12-month moving average for global production, red line is 12-month moving average for global consumption. Draw your own theories/conclusions & discuss!

The financial liquidity crisis has passed and it is increasingly obvious that inflation is getting completely out of hand. The treasury futures are starting to price in an interest rate hike. The rapid commodity-inflation is illustrative of precisely the sort of economic & production bottlenecks that monetary policy is supposed to prevent.

I think we may be approaching 1982 here all over again: the fed may be forced to choose between a hard recession or more and more inflation.

Wow what a sign of the times. You know gas is getting expensive when the hero of the neo-cons adopts a mode of transportation that is an icon of the stereotypical image of latte-sipping young urban liberals.

http://www.autobloggreen.com/2008/06/12/donald-rumsfeld-buys-a-vespa/