2011 April 08 | timiacono.com

Well, truth be told, Fed Chief Ben Bernanke is now so far behind the inflation curve that he’ll have to ask directions to find it, a point that became clear to me when I updated the model portfolio at Iacono Research for the next installment of the newsletter this weekend – it’s now up 8.1 percent for the year and that includes a pretty big cash position.

This chart of the day at Bloomberg tells part of the story that should get more  interesting as we get closer to “The Bernank’s” inaugural post-FOMC press conference later this month.

We now live in a part of the country (Montana) that, fortunately, has some of the lowest gas prices in the nation, but it still seems like inflation is quickly spiraling out of control (thank God – a new set of Costco coupons arrived in the mail today). I can’t imagine what it’s like to be unemployed in, say, California where, you have to pay $4+ a gallon for gas to go look for work when you know the odds are stacked against you.

Wall St. Crooks to Benefit from Shutdown

It looks as though the already slim chances of anyone going to jail for their role in the worst financial crisis since the Great Depression will sink to approximately zero in the event of a government shutdown, Securities and Exchange Chairman Mary Schapiro saying earlier today that enforcement activities could grind to a halt if Congress does not pass a budget.

“Tomorrow, unlike almost every other financial regulator, we may be shut down,” Schapiro said.

One of the many regulatory bodies that was either asleep at the switch, understaffed, underfunded, or who thought the market would regulate itself, the SEC is in the process of implementing the reforms specified in the Dodd-Frank Act, however, things apparently aren’t going very well, what with having to somehow reconcile the sweeping new financial reform laws with the needs of the big banks, mindful of the revolving door that exists between Wall Street and Washington in general and between banks and the SEC in particular.

“We’re stretched incredibly thin,” Schapiro said while addressing the Society of American Business Editors and Writers conference in Dallas, Texas. “We can get the rules written, but what we’re not going to be able to do is operationalize them.”

The big banks may as well hang up one of those “Mission Accomplished” banners…

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Gazintas and Gazoutas

This daily chart at the Economist provides a good summary of what goes into and what is coming out of the $1.2 trillion European bailout fund, freshly updated to include another €80 billion($115 billion) in the latter category to bail out Portugal.

The financial media is now littered with stories about how Spain is not like Portugal or Ireland or Greece and that they shouldn’t require financial assistance. You can’t help but recall how, after Greece was bailed out, they said Ireland and Portugal should be OK and then, after Ireland was rescued, they said that Portugal and Spain were OK.

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Friday Morning Links

MUST READS
Still No Budget Deal – Washington Post
Americans to Fed: prices are too high – Reuters
Gold hits fresh record, silver tops $40 an ounce – MarketWatch
To Fight Inflation, Europe Ends Cheap Money Strategy – Spiegel
European Debt Crisis Morphs Into New Phase – Bloomberg
Political Divide Poses Risks for Portugal in Bailout Talks – NY Times
Subpar U.S. Mint practices encourage speculation, Congress told – Mineweb
The Ryan Budget is Ludicrous and Cruel – Krugman, NY Times
Why 2011 Is Like 2000 and 2007 – Comstock Partners
2011 Is Not Like 2008 but 2007 – CNBC
QEased commodities charts – FT Alpaville

MARKETS/INVESTING
Oil near $112 as attacks damage Libyan oil fields – AP
Gold surges to record on euro, silver at $40 – Reuters
Gold Is Still Cheap Despite Record Surge: Marc Faber – CNBC
Silver defies bears to target $40/oz and beyond – Reuters
Washington shutdown fears sink U.S. dollar – MarketWatch
When gold becomes money again – Commodity Online
‘Booming’ silver prices generate astounding demand – Mineweb
Demand for silver bars spreads – GFMS – Mineweb
IMF says high oil prices are here to stay – Fortune

ECONOMY/WORLD/HOUSING/BANKING
On Hyperinflation – Credit Writedowns
Economic data would slow to trickle in shutdown – MarketWatch
Irish Welcome Portuguese to the ‘Debt Club’ – WSJ
Japan says economy in “severe” condition – Reuters
Spain Can Just About Avoid the Bailout Curse – WSJ
Inflation at UK factories hit two-and-a-half year high – Telegraph
Emptying the 401(k) to buy a home with cash – MarketWatch
Foreclosure fraud: The homeowner nightmares continue – Fortune
Home prices fall for seventh month in February – MarketWatch
And In The Meantime, The Adjusted Monetary Base…. – Zero Hedge
Fed’s Lacker: Interest Rates Could Rise By Year-End – WSJ
More signs of Fed discord on rate policy – Reuters

 
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