27 MAY 2009, Wednesday

1. Update from 7 MAY 2009 post regarding the Federal Reserve's Quantitative Easing plan. Above is a chart of the 10 year US Treasury Note's interest rate. Ben Bernanke tried to force the market down when he announced his grand "Quantitative Easing" experiment. And now he has found that markets will do whatever they are going to do despite someone's wishes. Ouch...rates are going up. We're experiencing a sharp rise in interest rates despite all efforts of the government to hold them down. People are no longer willing to buy the debt of the US at stupidly low interest rate levels. Congratulations to Congress and President Obama...we are now hostages due to our excessive spending! The bank (ie, China) is going to demand higher rates from the US to fund the operation of our federal government. In simple terms, they no longer trust us and are demanding higher rates. This isn't good...especially in a time when we are trying to spend our way out of troubles and establish new entitlements (ie, universal health care) at the same time. This may be the canary in the coal mine scenario. What they can't borrow...they will get via taxes. Make no mistake...taxes will go up for everyone...EVERYONE! We've already seen tobacco tax hikes, soon alcohol tax hikes and...heck...why not a national sales tax! Feels like FDR is back at the helm (review 15 MAY 2009 post). Hey! I've got a novel idea. Why not repeal all the bullshirt spending just authorized by Congress and do a real live budget scrub to eliminate nonsense programs and curtail spending to relieve the US's reliance on foreign lenders. Sorry, there I go again trying to think out of the box we're in.
2. 30 year mortgage rates jump 28% in one day from 5.1% to 6.5%. That can't be good for "stabilization of the housing market". Ouch and double ouch! Click to read more.
3. It seems that the "Pain Train" is at the station and loading...when it leaves I don't know...but this has my attention and concern since the housing market is the supposed key to economic recovery. "All aboard for the next leg down"???
4. One more thing...North Korea is up to it's usual nonsense. Time to: 1) tell Russia to screw off and deploy the missile shield everywhere to protect us and our allies and 2) equip South Korea and Japan with bombers and nuclear bombs. Perhaps then China and Russia will use their influence to get North Korea to knock the nonsense off...until then the US is being played like a cheap fiddle.
5. Rant over...Steve, OUT!