The Fed Will Kill This Bull

Jobs! Higher wages! Stocks are kicking ass! The bond market stoked on the return of the 30 year bon! There is an almost Clintonian feeling in the air in most sectors of the economy right now–and it’s quite possible that it’s irrational exuberance II, but I doubt it. Earnings have been strong for a while now (once Bush’s taxcuts have worn off, it seems), so the fundamentals are up.

And even though there is evidence that unemployment is not as low as advertised and low, even negative inflation has been measured in the last three months, don’t expect the Fed to allow this to continue for much longer. They seem quite miffed that their short term rate hikes have failed to hurt the mortgage rates or longer term rates.

So, some might wait and see if their next hike echoes further up the interest rate chain, but chances are that the only real bull market of the 00s will be dead by the end of the year. God forbid wages should go up.


NHL Free Agency Winners: Bizarro World Edition.

(1) Philadelphia – Foresberg, if he stays healthy (mentally and physically) was the best signing of the year. Derian Hatcher and Rathje too.
(2) Edmonton – Pronger and Peca will make this team tough to score on for the first time ever. If the rumors are true and they add Paul Kariya, this team has a chance at some hardware.
(3) Anaheim – This team is built for the new NHL rules. Automatically a contender in the west with the Niedermayer signing.
(4) Pittsburg – If Sid the Kid is what they say, this team could be hockey’s new harlem globetrotters. Sergei Gonchar is a pickup they never would have made before. Will they add CuJo?
(5) Chicago – They have to bounce ahead of LA here. Khabibulin is the reigning stanley cup winning goalie. This team hasn’t had championship goaltending in forever. (And they traded away two before they gained that status).
(6) LA – Roenick is too old and beat up to justify the headlines he’s getting. Luc Robitaille claims that the team is now a championship contender. No way, but it does put them in a better position to make the playoffs. No one is winning anything with Roman Cechmanek.
(7) Calgary – Calgary did better this year simply by being able to retain their ace. Anyone think they’ll trade for Al Macinnis? Adding some veteran help didn’t hurt either.
(8) Islanders – Peca and Yashin weren’t compatible and we don’t know if Satan will be either, but some addition by subtraction and a deal with Satan were classic Mad Mike plays.
(9) Boston – They should have tried harder to keep Gonchar instead of signing Graybeard Leetch, but this team has added a lot of role players that will make them win more games.
(10) Florida – Upon further review, this team’s signings are for purposes of golf, not hockey–but at least they’re trying…

which is more than can be said about …
(1) Colorado – Don’t tell us Kurt Sauer is the next Adam Foote, and don’t tell us that with the new rules Hejduk and Tangay will be able to make their Lady Byng image irrelevant. And no one else was as offended as me by Joe Sakic’s 52-goal contract year performance and immediate fall off, but something tells me Joe is going to mail it in this year too. ESPN would be foolish to hype this team as much as they have been.

(2) Detroit – This team ought to be the charter member of the Senior NHL. You read it here first: they miss the playoffs in this new, fast, young west.

(3) Rangers – Players weren’t even returning their calls. The only reason to ever go play in this shitty team was money, and that isn’t a factor anymore. If they don’t go into full rebuild this year, they’re craizer than we thought.

(4) San Jose – They predicably lost the Nieder race, but haven’t done anything else but hemmorage players. They might land Selanne or Kariya, but they have lost their chance to do anything to put them back on the map. If they make the playoffs, it’s a surprise.

(5) T.O. – Their GM should hire extra body guards, and watch for a pat quinn knife in his back. This team hasn’t done anything either. They will fall apart too. Jason Allison? Dude — they should sign him and Lindros, because they seem to be the team the most willing to intentionally injure other players.

Apologists for these teams say they are “waiting for next year’s crop.” What a crock of shit. There’s no guarantee that those players will be available anyway, since a deadline trade would leave the new team plenty of time to woo them and offer them the max. Furthermore, it’s a lie to suggest that they weren’t trying. Forsberg said no to Colorado. Niedermayer flatly rejected New York. Don’t believe that. It’s a new NHL.

The ten biggest winners in this free agency signing period:

(1) Philadelphia
(2) Edmonton
(3) Anaheim
(4) Pittsburg
(5) Los Angeles
(6) Calgary
(7) Florida
(8) Islanders
(9) Boston
(10) New Jersey (even still, yes.)

And the five biggest losers

(1) Colorado
(2) Detroit
(3) Rangers
(4) San Jose
(5) Toronto

What a reversal! Only Philadelphia is on the good list in both CBAs. Edmonton is all of a sudden a power in the west, and with no red line, the one-two punch of Niedermayer and Ozolinsh with Sergei Fedorov and Petr Sykora up front makes the Mighty Ducks as Mighty as they’ve ever been.

The Left is finally starting to get it on Roberts.

The direct confrontational approach to the Roberts nomination was doomed to failure from the beginning. Finally, they are discovering some of the man’s “hired-gun” qualities. He represented a pro-gay client, he has also represented Native Hawaiians against Ward Connerly like racial “blindness.”

Please, I don’t believe this guy is a liberal. I don’t even think he’s a moderate. What I do think is that he’s at least a thinker, and that’s the best we can ask for from a right-wing appointee. But the only way to oppose him, to make sure that the Senate does its job, is to tick off the shark-brained troglodytes on the Right into thinking that this man is not their ideal candidate. With Brownback and Coburn on the committee, you have to think that it can’t be that difficult to do. The Right is constantly worried about left-drifting justices like Souter. Here they very may well have one who will evolve towards the centrist type of position that he is replacing. We can hope.

Now, if they will just start taking credit for preemptively shying Bush away from a Scalia Jr!

The Stupidest NYT Op-Ed in a While

Without the much-maligned Wal-Mart, the [American] rural poor, in particular, would pay several percentage points more for the food and other merchandise that after housing is their largest household expense.

Beggar thy neighbor, eh? There are so many things wrong with this statement I don’t even know where to start, so I’ll start with the fact that these “rural poor” (i.e. American rural poor) are still in the very, very high percentiles in terms of income per capita world wide, and they are externalizing these costs on those that are very, very low in those same percentiles.

It’s typical Bushian reverse socialism with the World’s rich/america’s poor stealing from the world’s poor.

Second, these few percentage points simply do not compensate these folks for the dramatic lowering of their own salaries because of employers like, well, Wal-Mart. Any honest holisitic assessment of prices and wages would have to reflect that.

Third, decreases in costs hurt debtors. America’s poor are enduring an epidemic of bankruptcy, and it’s only going to get worse with the new law. Every time prices go down, debt gets more expensive, even if interest rates stay the same, because the dollars they have to pay back are more dear. This is why every episode of significant deflation in American economic history has accompanied a panic, depression, or recession.

How can something like this get on the NYT’s op-ed page?

Without the RPS a Listless Energy Bill

It was fair to expect some pointless corporate socialism to buy out the Conservatrons in the Energy Bill, and it does have some worthwhile provisions such as updating the grid and changing the antiquated daylight savings regime. The nickel and dime tax breaks for sustainable energy are nice; however, they do nothing to change the energy status quo. A Renewable Portfolio Standard (RPS), assuming it was properly constructed, would have begun to incorporate sustainable (I prefer sustainable to renewable) energy into a meaningful portion of the nation’s supply.

The RPS in the senate bill would have forced each utility to garner a modest (the EU is already shooting for 22% and, all told, we have better geological resources for this then they do) 10% of its energy output from sustainable sources (generally wind, solar and geothermal) by a set date. If structured properly this would have been accomplished through tradeable credits. In this way a utility in, say, Michigan in January could have traded most of its 10% requirement to a utility in Arizona where there would be ample solar energy to account for some of Michigan’s 10% on top of its own. In this way the most efficient sources would have been utilized first and, assuming that it is advantageous to sell credits (in other words, the Arizona Utility could say, hey we’re producing 12% of our energy from solar sources, now we are going to sell the 2% extra credit to a utility that can only make 8% this month and make a profit) it would have created an actual market incentive for RD&D of sustainable energy and lots of high-tech (research) and blue collar (maintanence) jobs – as opposed to the 2 billion dollars that the Energy Bill will pay oil companies to do seismic tests for offshore oil wells regardless if states want exploration there or not.

To be fair the RPS does have one disadvantage, if a utility has to buy most of its green quota then the people it serves will not see the benefits from the green energy. But hey, that’s capitalism – real capitalism I mean. If their customers are unhappy about it then, by golly, there is an incentive for that company to invest in developing a form of green energy available in its area.

In a poorly strucuted market that does not internalize the downwind externalities of convetional energy sources and compounds this problem by lavishing them with underserved subsides green energy will never account for more than around 1% of America’s total capacity. An RPS would have put economic momentum behind a meaningful amount of green energy. It certainly would not have solved America’s energy problems, but it would have put a real dent in them and created an atmosphere that encouraged innovation. Instead, just like hybrid engines, we will be buying this technology from foreigners; specifically, Denmark, Germany, Japan and yes, China.

Stuff it, Larry. The new CBA is already working.

Adam Foote to Columbus.
Bobby Holik to Atlanta.
Tony Amonte to Calgary.

and . . . Chris Pronger to Edmonton.

That’s right. Edmonton makes the splash so far. And expect it to continue. Really, what are the odds of Peter Forsberg ending up with one of the old regime’s big spenders? Philly doesn’t have room. Detroit doesn’t have room. Dallas, Colorado, and the Rangers can’t afford him either, unless they all reconfigure themselves.

Players are being traded as players again, not as contracts. It’s the way it should be. This means that the team with the best players managed by the best coaches all picked by the best general manager will win again. A team that needs a defenseman will be able to make a trade with a team that needs a forward if the players are roughly equal in value, because they will all be within the same limits.

30 teams is still too many teams, but with the talent finally spread out equally, there’s a good chance that that macro factor alone will improve the quality of gameplay, without the need for contraction or drastic rule changes.


So, Philly gets Swedish Pete. But they have to unceremoniously dump Jeremy Roenick to LA to get it done. But for every move made by Philly, it has been Edmonton — not Colorado or Dallas — that has responded, and that’s a big difference.

The big movers: The Penguins, The Flames, The Oilers, and the Flyers. Only one name you’d have expected.

UN spells relief for Condi

So, who’s bringing the champagne and disco music to the State Department today? The Moustache has moved to the UN… Par-ty! It seems too that anyone in the Cheney mafia gets away with anything. This guy should not be in government at all, but alas and alack, at least he’s not anywhere that matters.

At least the Congress got something done. The highway and energy bills aren’t perfect (and you should be buying some caterpillar and some kind of uranium play) but at least they both take some pro-environmental steps. The energy bill encourages growth in non-fossil fuel energy and the highway bill (maybe I’m confused?) encourages hybrid vehicles.

Of course these are giant pork giveaways, but that’s how it’s done.