Dissin' (Megan) Fox

• It always puzzles me when I hear that the Democrats do not want to debate on Fox.  Personally, I'd be on Fox in a heartbeat.
• In a "What me, worry?" demeanor, the Fed is looking at the subprime woes being a small thing in the economy.  Well, except those going through it.  Hard-hearted and cruel? You could argue that. But the way that Federal Reserve Chairman Ben Bernanke and his fellow members of the Federal Open Market Committee see things, they can't afford to mess up the rest of the U.S. economy in order to rescue the relatively small ranks of subprime borrowers. 
• "You gotta harden your heart, swallow your tears..."
• It was only a year ago that the Fed raised rates for the last time.  Since then, they haven't done anything.  Kind of an easy job.  How much does it pay?  Sure, there's the in-between jawboning.  But that's just some game that you folks do for grins and giggles, right?  Like Janet Yellen goes out and says, "Watch this, Ben!"  Talks up inflation, has a good laugh, and goes back to doing nothing.  Bunch-o-government workers!
• So my thoughts on interest rates is status quo.  I don't think there is much inflation to worry about.  Higher energy prices have acted like a tax on consumers.  Higher interest rates and rising adjustable rate mortgages have increase monthly cash outflows and reduced discretionary spending.  I think a rate hike here would be dangerous and slow down an economy that doesn't need any slowing down here.  A rate cut?  I doubt it.  I think the Fed may be watching the tight labor market and wage pressures here, so I don't think they're in easing mode just yet.
• Tonight's blog entry dedicated to the lovely Megan Fox (naked, nude, topless, Maxim, stripping, smoking, panties, oh my Lord).

Randoms

• Sacramento Landing keeps track of the housing market here in, uh.... Sacramento. Check out the grim details.  Crikey.
• Wallstrip on Gamestop.   I went there last week and picked up a game for the Wii.  Seems like games are the same price everywhere; although they do have used games and also older games in a discount bin.  They had just stocked 2 Wiis.  As I was there, one guy came in and bought one and GME fielded about 5 calls asking if they had any Wiis in stock. 
• Irwin Kellner over at CBS Marketwatch pens a column Why the Fed could raise rates as early as this month.

Most of the data available for the quarter to date suggest that the economy is growing faster now than it did in the first quarter. The rate of inflation has picked up as well.

 

This should assuage those whose primary focus is profits and dividends. Faster growth combined with higher prices generally boosts revenues and thus leads to better earnings.

 

At the same time, however, it has put the kibosh on the notion that an interest rate reduction is just around the corner. Indeed, there is every reason to think that the opposite is in store.

• C'mon, Irwin.  You think they'll raise rates so soon after a .6% GDP and a CPI number of 2.6%?  With gas prices up near highs, and acting like a tax hike on consumers?  I don't think the Fed is that trigger happy.  In Absense of Inflation a couple of days ago, I noted that not everything is going up in price and that consumers have other options out there.  Nobody is forced to pay for expensive oranges or high-priced milk. There are other options at the grocery stores.  What about technology, Irwin?  Nobody ever mentions the things that have dropped in price...
• Can one "pen a column" on the internet?  Hmm. How about "taps out a column?"  Or "keys a column?"
• Folks seem a little disappointed over The Sopranos finale.  You know what?  I've never watched even one episode.  LOL.  But that show has been big water cooler talk.  I wonder if HBO is losing subscriptions now that the series is over...?  The Sopranos creator defends the finale.  Hey, I think it sets up a movie deal down the road....
• Referrals... So I mention Japan's Miss Universe Riyo Mori yesterday, and it sure didn't take long for the Riyo Mori nude search monsters to start pinging The Learning Curve.  LMAO.  Should've included swimsuit in that list of words.  She joins the nude and naked search frenzy with Maria Sharapova, Erin Burnett, and Carrie Ann Inaba.  Haven't seen the nude keyword used with Abby Joseph Cohen (not pictured), though.

The Absence of Inflation

I know this seems counter to what folks are feeling. It seems as prices are always going up. Note the remarks by Barry Ritholtz in the comment section at the clipmark. Inflation measures a broad basket of goods, not just a handful of things that on our lists of "Top Ten Irks." If the cost of something is up, consumers often substitute something else. If apples are pricey, they buy bananas. If oranges are expensive, they try the grape juice. If gasoline is up, they rideshare, use mass transit, telecommute, drive less, and hybrid purchases increase.

Interest rates are up because of the *fear* of inflation, rather than inflation itself. We're just not seeing the overall increase in the sum total of goods in that CPI market basket. IMHO, anyways.

clipped from blogs.wsj.com Inflation, Conspicuous By Its Absence For months economists and doomsayers warned darkly of the looming spectre of inflation. Yet the bond market barely budged, and the stock market wasn’t all that worried, either. It’s striking, then, that the selloff in bonds in the past few days is notable for the absence of the one factor that is frequently the cause of higher interest rates — inflation. The most recent report on core inflation, as measured by the personal consumption expenditure deflator, released last week, showed it rising at an annualized 1.995% rate, the lowest since 1.993% in February 2006. Yesterday Greg Ip reported on the Livingston Survey of economists, used by Federal Reserve officials, which shows forecasters aren’t too concerned about inflation, either.

Rising Interest Rates and Housing

Here we have some comments on the impact to the housing market from rising interest rates. Doesn't look too good for the subprimes! And it also doesn't look good for the summer selling season.

clipped from thehousingbubbleblog.com “The biggest topic of the week has to be the massive jump of the yield on the 10-year. The last hope of the housing market was the dream that the Fed still had control of the situation and could lower interest rates. This would set everything right in the minds of fanatics such as David Lereah, Leslie Appleton-Young and Lawrence Yun.” “Raising interest rates will kill whatever is left of sub-prime and Alt-A craptacular real estate lending. Rates go to 7% and bye-bye any real estate recovery at these bubble prices. Prices must and will fall.” The Contra Costa Times. “Investors’ expectations of an interest rate cut, and home buyers’ hopes for cheaper mortgages, seem to be disappearing. Some market watchers say the yield is likely to climb higher as bond prices weaken, making it even harder for consumers to finance home purchases and for companies to borrow money.”