Friday Lite

It's been a hectic last few days and the moving truck arrives later this morning - the week ahead will be anything but normal around here and I think I'm now officially a week behind on answering some mail . Sorry.

We don't actually move until next Friday and the computer stays with me so there will be something showing up between now and then, but who knows what or when. The usual schedule should resume sometime soon after Memorial Day.

Last chance to guess the mid-year price of oil and gold

This is your last chance to guess the mid-year price of oil and gold and win big! For details see last Friday's post - all entries must be received by the end of the day today and they can be made on this post, last week's post, or via email. If all goes well, the entries will be tabulated next week and a new chart will appear here, similar to the one below from last December.
The combined difference between the guessed values and the closing prices on June 29th will determine a winner who will receive a free one-year subscription to Iacono Research.
This is what the top ten looked like last time.
Not having had time to go through the guesses, there's no clear sense of anything other than that TJ just doesn't like to be part of the crowd ($55 and $600). But that's OK, I feel that way a lot too.

Mortgage lending is self-regulating too!

A few years back, long before the word "subprime" entered the vernacular, the nation's central bankers spoke glowingly about hedge funds and financial derivatives, highlighting the good they were doing for the world while at the same time brushing off the increased systemic risk they posed, claiming that these groups were "self-regulating".

On many occasions Alan Greenspan said, "Hands off those hedge funds".

The same line of reasoning is now being applied to the subprime mortgage lending implosion that is slowly sweeping the country. Yesterday, Fed chief Ben Bernanke delivered a speech on mortgage lending that sounded eerily similar to comments made by his predecessor about hedge funds and derivatives.

Credit market innovations have expanded opportunities for many households. Markets can overshoot, but, ultimately, market forces also work to rein in excesses. For some, the self-correcting pullback may seem too late and too severe. But I believe that, in the long run, markets are better than regulators at allocating credit.

We at the Federal Reserve will do all that we can to prevent fraud and abusive lending and to ensure that lenders employ sound underwriting practices and make effective disclosures to consumers. At the same time, we must be careful not to inadvertently suppress responsible lending or eliminate refinancing opportunities for subprime borrowers. Together with other regulators and the Congress, our success in balancing these objectives will have significant implications for the financial well-being, access to credit, and opportunities for homeownership of many of our fellow citizens.

And of course the Fed will be there to mop things up in the event that the subprime contagion and other malinvestments begin to affect the broader economy in a significant way later this year or next year.

Thoughts from The Money Show

Unfortunately, the notes taken at The Money Show earlier this week are now packed away and not easily accessible, so all that can be offered here are a few thoughts.


Overall it was a great learning experience - not necessarily what the speakers had to say, but getting a feel for who attends these shows and the mood of the crowd was invaluable.

• Greyhairs! - as someone in their mid-forties, I was a real youngster in a crowd of 10,000 (over four days). The average age had to be late fifties or more - nearly every session was a veritable sea of gray hair when viewing the audience from behind.
  
  
• Bull vs. Bull - Martin Weiss had some of the most memorable comments on the day I visited. During the Bull vs. Bear debate he remarked that everyone is bullish on foreign stocks and that maybe that's not a good sign.
  
  
• Exhibitors - The number of natural resource companies with booths in the exhibit hall was striking. The combined total of gold miners, silver miners, numismatic coin dealers, and energy companies about equaled the combined total of everything else.
  
  
• Trading Systems - Selling software to help people trade stocks has got to be one of the most profitable businesses out there today. They had some of the biggest and flashiest booths with some of the biggest LCD monitors and they just made it sound soooo easy - just like on TV. There must be a perpetual stream of new customers who buy this stuff, lose money, then give up within a year.

If anything else of note comes up after we unpack, this topic will be revisted.