The 1000th Post

I have reached a milestone at this Blog, thinking of how much I have discussed so far. I feel an impluse to review and edit the entirety, but dislike the Thought of the trouble associated with such an effort. There has been some discussion of my collecting sufficient material for a book release, with some snide commentary that this time I could supply a full-length Work (I tend to run to 100-Page monographs). The only value to me would be to collate and organize various themes which I have promoted, as Few would buy any Work available Online for free. Anyway, on to Today's Post.

Durable Goods did a happy dance in July, confirming my estimate that the Mortgage Crisis will be isolated, with the Economy basically shrugging off any recessionary pressures. One month’s numbers does not a tale relate, but Non-Defense Durable Goods excluding aircraft at 2.2% gain indicates Wholesalers and Retailers still have little worry about overall Consumer Demand. I await the August numbers with hope and a little cynicism, because Flows have remained steady, and the Crack of the Whip has basically been felt by the Mortgage situation.

This article presents the data which may be the real Threat to the Economy. The Fed will hopefully "Just Say No!" to a cut in the federal funds rate. A "Yes" will only insert unnecessary liquidity, and start the Fan of Inflation. There is too much artificial Money (Commercial Paper) in the Economy, and excess liquidity will get it sold to beguiled Investors. Everyone in the Markets are set to make a Windfall in Profits-Taking Sales of Paper, and the Fed must disappoint this Group, or face the Prices of Real Goods marching in Step with the Silly Paper.

Here is the basic Advertising Campaign put out by the Silly Paper Agents to apply pressure on the Fed. What is not said is that a Cut in the fed fund rate is not a guarantee of increased Commercial Paper subscription, presenting no better deal to either Business or Investor, or lessening the Risk which must be endured by the Investor. The Fed has already presented a cheap alternative for Commercial investment Capital in their Cut of the Discount rate. An inability to accept a Percentage Point difference in Operating Capital Cost does not bode well for the security of the Business opportunity, and likely would not inspire Commercial Paper Investors to come back. lgl