SAR #8153

The Energy Department no longer talks about oil,
but about "liquids".

Potluck: Bernanke & Co. are considering letting foreign banks dump their [bad] paper on the Fed, too. Only the 'very safe' stuff of course, like sub-prime backed derivatives rated AAA by S&P.

Going and Coming: Some schools in Tennessee did not run buses on the last day of school, to save gas money. A Minnesota school district are planning to skip school on Mondays to bridge the shortfall in budgets for gas money. So much for 'rithmatic.

Seconds Look: Moody's lowered its outlook on securities backed by second mortgages, raising the expected default rate: Now 17% of the 2005's, 42% of the 2006's and an extraordinary 45% in the 2007 vintage are expected to default.

Perfect, As Is: "Japanese Man Finds Woman Living In His Closet."

Louder than Actions: The Commodity Futures Trading Commission investigation into oil pricing is seeking to criminalize the intent of speculators. If they were just trying to make money, then that's fine. If they were trying to make money by trying to "skew the markets," that's bad. If they lost money, they will be accused of something else.

Seco, Totalmente Seco: Barcelona is in the midst of the worst drought in its history, and it has a pretty long history. It is so dry that water is being imported from France, fountains are dry, pools drained. The whole Mediterranean region is inexorably warming up and drying out. Peak water?

Den Mother: Société Générale’s Albert Edwards in a recent note: “We are not through the worst of this crisis. The worst is still to come. We expect global equity prices to fall by up to 75% from their peaks as a deep global economic downturn unfolds over the next few years."

Gravity: American corporations reported first-quarter profits fell at an annualized 6.2%. This is the sixth quarter in a row with falling profits for US companies. If earnings have fallen for 6 quarters, and if stock prices are at some multiple of earnings...

Heck of A Job.: While China struggles with the aftermath of the earthquake, Katrina's victims are learning that their children who lived in FEMA trailers for months and years may face lifelong ailments from formaldehyde fumes. Let's take up a collection to help the people in Myanmar.

Crude Awakening: The Dallas Fed maintains that strong demand has pushed producers to capacity and that new supplies to meet increased demand have not been, and may not be, available. They also cite the weakening dollar, but only soto voce for fear the boss is listening.

Where's The Beef? Due to high corn prices, US feedlots are losing money on every steak you eat. Go out and have another one tonigh; because prices are going to go up due both to the price of corn and the export of beef to countries with stronger currencies. Bummer.

Porn O'Graph: A century of debt levels.