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Linkfest

Sunday, July 23, 2006 | 05:30 PM

Its deja vu all over again: It seems that way too often, the hope of "the Fed's finally finished" raises expectations of a pause. We saw that on Wednesday, the best one day performance since 2003. Alas, it was all given back by Friday. These short covering/one-day wonders must be becoming quite tiresome to those poor souls who believe in them.

No matter: The economy is terrific, there is no inflation, earnings are great, Iraq is a democracy, oil prices are dropping and peace is due any minute in the Middle East. Oops, my bad; That must have been some incumbent's press release.

Back in real world, there are real concerns which need to be digested. Its a rainy weekend in NY, and that means an extra long survey of many of them in our weekly linkfest:

• Are we placing too much blame on Bernanke? After all, he merely inherited a bad economic set up. Slowing growth, rising inflation, high energy costs, a real estate dependent economy, and the longstanding problem of excess liquidity -- none of these rest at the feet of the present Fed Chair. In reality, they are the result of what Tim Iacono charitably describes as The Mess That Greenspan Made.

• The most egregious Fed Chair critic is Kentucky Sen. Jim Bunning (R). He called Bernanke an "amateur" and "blasted the former Princeton University professor for unnerving markets with his anti-inflation rhetoric." Perhaps the Junior Senator from Kentucky needs to be reminded of his own record: in his rookie season with the Detroit Tigers, he hurled a lamentable 6.35 ERA.

• The WSJ's Greg Ip, whom I have criticized in the past for being too trusting of government statements and news releases, has the scales removed from his eyes in Fed Reality Check

• Was Wednesday anything more than a Sucker Bet? so far, that seems to be the case.

• Real Estate moved front and center this week:
-The Fed Chair mentioned in his prepared remarks that the slowdown in Housing was "orderly."
-Barron's Alan Abelson quotes D.R. Horton CEO Don Tomnitz as saying Housing downturns are "longer and deeper than we've imagined" in Eyes Wide Shut (If no Barrons', go here)
-The NYT exhorts us to "Keep Eyes Fixed on Your Variable-Rate Mortgage" (They were kind enough to provide me with this interest only national map from their print edition);
- The latest Headache For Homeowners: Inflated Appraisals
-These are the best places to live in America;

• The Middle East is causing all manner of consternation. The Op/Ed pages of American newspapers are rife with fascinating and thoughtful analyses -- (I am aware that this may quite possibly be the first time that sentence has ever been written).

In the WSJ, Middle East Scholar Fouad Ajami writes Lebanon is Hostage to Hezbollah via Iran and Syria. In the New York Times Ted Koppel (Yes, THAT Ted Koppel) addresses the question Are the Israelis over-reacting in Lebanon?:
"Perhaps they simply perceive their enemies’ intentions with greater clarity than most. It is not the Lebanese who make the Israelis nervous, nor even Hezbollah. It is the puppet-masters in Tehran capitalizing on every opportunity that democratic reform presents. In the Palestinian territories, in Lebanon, in Egypt, should President Hosni Mubarak be so incautious as to hold a free election, it is the Islamists who benefit the most."

In the Washington Post, George Will writes the Weekly Standard -- "voice of a spectacularly misnamed radicalism, "neoconservatism" -- is "so untethered from reality as to defy caricature." The Cato Institute concurs. Is National Review next? Some people are surprisingly thrilled about the situation -- it means the Rapture is nearly here.

As to the financial repurcussions, consider these possibilities:
-Bank of Israel: Markets Will Project a Change for the Worse in Israel's Security and Geopolitical Situation (pdf)

- Morgan Stanley: The ‘latest’ tension is another twist in the endless cycle of shocks in the Middle East

-Businessweek: The Mideast's Economic Fallout

-Bloomberg: Israel Stocks Rise Most in a Week on Optimism Conflict Near End
• With all eyes on the Middle East, you may have missed this: Has China's Yuan Tinkering Changed the Global Economy? (it was the anniversary of the unpegging)

• Some interesting ideas came forth this week from the world of INVESTING:

Random Walk and Outperforming Fund Managers (or whats left of the efficient market hypothesis)

The Market is Wired Differently From Human Brains

Citigroup's Geo-Political Risk calculator

Want to Buy Stocks Making 52 Week Lows? (Don't)

In case you missed it, Warren Buffett on Charlie Rose

"We Now Return You to Our Previously Scheduled Microsoft Bashing"

Fleckenstein says: The bear market is back

Speaking of Big Cap Tech Disasters: Dell

What Can Male Traders Learn from Successful Women...And Vice Versa

The trading doc advises Making friends with market emotions;
• Option Options Options!:

Study Finds Backdating of Options Widespread: More than 2,000 companies appear to have used backdated stock options; Fortune's Adam Lashinsky drew the early bead in Options gone wild!

Readers were warned of the adverse impact of Option Expensing 18 months ago;

A must read study: CEO total direct compensation at Tech100 firms is inversely correlated with performance -- (PDF)

Last week, I noted how offended I was at the 9/11 option grants; Surprisingly, some defended the practice, so I advised them to form an "Apologist's Fund" and to use their own dollars in a 9/11 Options Grantee Investment.

• The Investment Company Institute noted that Americans have over $14.5 trillion stashed away in retirement accounts. Sounds like a lot of money -- until you Do the Math;

• How What Naïve Consumers Don’t Know Can Help You

Some interesting Tech and Science items:
Way cool: The Biomedical Image Awards 2006

PEW: Bloggers: A portrait of the internet's new storytellers
7/19/2006

Geek to Live: Top 10 free and cheap productivity tools

Cool Google maps mash up of the most popular books by city

Do you have Netflix Guilt?
A MySpace backlash has begun: The Register notes the social networking site's advice to musicians, a huge provider of content: Sell more tdhirts shirts

• A week like this needs lots of Funny; we have it for you in spades:
Ask A Ninja Reviews "Pirates of the Caribbean" (Not Safe For Work)

the laugh-out-loud funny Secret Diary of Steve Jobs, Aged 51 1/2

Brilliant mashup of the Monty Python's "Knights of the Round Table", as performed in Star Trek

Chad Vader - Day Shift Manager (episode 1)

Judge: "Extremely Embarrassing" not the same as "Classified"

Daily Show on Ted Stevens and on Net Neutrality

And the astonishingly foul mouthed but incredibly funny edit of The Big F@#*^% Lebowski (Definitely NOT SAFE FOR WORK -- it's nothing but curses)

Regular readers know I've been a big fan of Entourage since day one. But HBO has also been running lots of older classic movies latetly: Animal House, North Dallas Forty, L.A. Confidential, 48 HRS, Houseboat, Field of Dreams -- perfect for a rainy weekend. (And if you haven't seen Monster-in-Law yet, do so -- just for Wanda Sykes performance )

And that is all she wrote.