REMINDER: All investment, economics, and finance related material now appears at the new IaconoResearch.com. For the time being at least, this has become a personal blog covering a variety of mostly unrelated topics.

On a Motorcycle in Moscow

This clip (hat tip ES) reminds me of when I was in my twenties in Los Angeles and late for work, but, this guy seems far too timid about where he’ll do his wheelies.

Of course, I’m not talking about riding a motorcycle myself – I’ve never been on one. But, I do remember being late for work and watching guys deftly navigate the 401 405 freeway at about 60 or 70 mph when everyone else was doing about 25.







Koreans in Deep Inflation Kimchi

Inflation in India appears to be closings in on about 10 percent and, in other parts of Asia, life’s essentials are getting more and more expensive in what may now be a situation where U.S. exports in-flation to the rest of the world (yes, this follows the importing of de-flation in recent decades which helped keep U.S. inflation much lower than it would otherwise be). According to this New York Times story, even kimchi has become dear.

Even in the middle of a loud and bustling outdoor market, her voice drops to a whisper when she agrees to reveal the two secret ingredients that make her kimchi so popular with her customers.“Fermented-anchovy paste and pickled-prune sauce,” says Kim Gil-soo, looking warily, both ways, down the alley in front of her store, called Prosperity.

“I special-order the sauce from a certain place in the countryside,” she said, still whispering. “I’m quite well known for my kimchi.”

But recent sales have been disappointing, Mrs. Kim said, because of an unavoidable spike in the price of her kimchi, the fiery and pungent Korean national dish that typically combines cabbage, radishes, red chili peppers, garlic and salt. The price for one head of long-leafed Napa cabbage grown in Korea has skyrocketed in the past month, to as much as $14, from about $2.50. Domestic radishes have tripled in price, to more than $5 apiece, and the price of garlic has more than doubled.

Kimchi has become so expensive that some restaurants in the capital no longer offer it free as a banchan, or side dish, a situation akin to having an American burger joint charge for ketchup, although decidedly more calamitous here. The politics editor of a major South Korean newspaper called the kimchi situation “a national tragedy,” and an editorial in Dong-a Ilbo termed it “a once in a century crisis.”

Maybe they should try ketchup…

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Two more important economic reports were released earlier today during what was a veritable avalanche of financial news. The Commerce Department reported(.pdf) that retail sales rose more than expected in September, up 0.6 percent following an upwardly revised gain of 0.7 percent in August, as the American consumer is clearly not dead yet.

Auto sales bouncing back from a decline of 1.0 percent in August to register a gain of 1.6 percent in September were responsible for about a third of the overall improvement, but gains were broad-based, only one of the 13 major categories – clothing – posting a decline.

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Bernanke Speaks, Markets React

Federal Reserve Chairman Ben Bernanke eased off of the gas pedal this morning, one that had been pegged to the floorboard in recent weeks with what seemed like nonstop talk about quantitative easing (i.e., money printing) by central bank officials, offering a few thoughts about the U.S. economy and monetary policy in this speech at a conference in Boston.

There were no new details offered up about what might come at the next policymaking committee meeting during the first week of November, this being the most likely cause of financial markets throwing a bit of a fit when the details first became known.

But, upon further reflection, there appear to have been enough mentions of further easy money from the Fed that markets are now recovering, the most direct reference coming in the opening part of the section titled Monetary Policy Tools: Benefits and Costs:

Given the Committee’s objectives, there would appear–all else being equal–to be a case for further action.

In light of soaring stock and commodity prices (something that the Fed surely wants some of, but not too much), there is a good deal of caution expressed regarding unintended side-effects of further printing press operations, the word “cost” being used a total of four times in the last few paragraphs.

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Inflation Uncomfortably Low at 1.1 Percent

The Labor Department reported that consumer prices rose 0.1 percent last month and are just 1.1 percent higher than a year ago, meaning that Fed Chief Ben Bernanke at least got the title right -  Monetary Policy Objectives and Tools in a Low-Inflation Environment – for his speech today (more on that later as markets try to digest all of this morning’s data).

The cost of energy rose 0.7 in September after hefty monthly increases during the two prior months and, given that prices for other items such as housing and apparel continue to fall, deflation-averse economist are probably happy to see crude oil at over $80 a barrel.

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Friday Morning Links

MUST READS
How to stop a currency war – Economist
China yuan warning ahead of US currency report – BBC
Mortgage Mess May Cost Big Banks Billions – NY Times
Bernanke says sees case for more Fed easing – Reuters
Two tales show bank’s role in prolonging mortgage crisis – McClatchy
`Currency Vigilantes’ May Replace Bond Counterparts in QE Boom – Bloomberg
ECB’s Stark: Currency race to devalue would be fatal – Reuters
Fed Wants to Hoodwink Public, Only Fools Itself – Baum, Bloomberg
SEC and Mozilo in talks to settle civil fraud case – Reuters
Home remedies worth trying – Washington Post

MARKETS/INVESTING
Oil below $83 as stock market rally cools – AP
Gold steady as US data, Bernanke awaited – Reuters
Cotton Prices Hit Record Highs; Shortage Feared – FT
Scale of Currency Moves ‘Unprecedented’: Analyst – CNBC
OPEC Members Seek $100 Oil to Counter Dollar Weakness – Bloomberg
Gold Vs US Bonds – Which Do You Believe? – Real Clear Markets
China Stocks Rise for 7th Day, Capping Best Rally in 11 Months – Bloomberg
Gold up, Gold equities not so attractive – Commodity Online
Cramer: Bears Can’t Stop Us Now – CNBC

ECONOMY/WORLD/HOUSING/BANKING
Who can magically fix the economy? No one – Fortune
Record gap with China sends U.S. trade deficit soaring – LA Times
China September Property Prices Rise, Defying Curbs – Bloomberg
Rising Cost of Kimchi Alarms Koreans – NY Times
India Inflation Unexpectedly Quickens to 8.62% – Bloomberg
Florida judges facing avalanche of foreclosure cases – Washington Post
Depressed Housing Market Could Drag On Economy For Years – NuWire Investor
Is David J. Stern the poster boy for the foreclosure mess? – The Upshot
Bernanke Ponders `Crapshoot’ as Fed Seeks to Support Prices – Bloomberg
Bernanke Speaks: What to Expect From Fed Chairman – WSJ
Lending Is Up, but Demand Is Lacking – NY Times

 
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