Weekend Linkfest

Another week, another collection of mayhem: From the Fed pause to the not-so-friendly skies, indices lost between 1% and 1.5% this week as investors digested lots of news.

Surprisingly, the airports were not nearly as problematic as you might have suspected: I flew out of JFK the day the thwarted terror plot was announced, and aside from having to move all of our liquids to our carry-on bags -- which we then checked -- getting through security was fairly easy, and our flight to Denver departed on time (go figure).

Speaking of which, Vail is gorgeous during the summer, with sunny 85-degree days and delightful 75-degree evenings. And as long as the lodge has fast Internet access, I can get you the Weekend Linkfest:

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The Pause That Refreshes?

• The long-awaited, very telegraphed, highly anticipated Fed pause took place this week -- and markets sold off afterward. It was, as they say, already baked into the cake. Some felt that despite investors' sentiment, a rate increase would be good. I was in the camp that thought a quarter-point hike and an accompanying dovish statement would have been good for the markets. Instead, we got The Dovish Pause. Then came Friday's surprisingly robust retail numbers -- the largest gain since January -- and investors began contemplating the definitional differences between the words "pause" and "stop."

After the Fed meeting, we looked at most of the research on what happens When the Fed Stops Tightening. (Of course, we don't know yet if they are actually finished.)

Back in April, I wrote Pause/Resume Scenario Increasingly Likely. This scenario would be the worst of both worlds -- an official acknowledgment of a slowing economy and an admission that inflation is too strong. Now we return to fearing another hike and wondering What if the Fed's reasoning is off?

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• The Wall Street Journal writes that U.S. airport security is moving more toward the El-Al model: Aircraft-Security Focus Swings to People (from weapons). Before the airline terror plot was thwarted by U.K. undercover agents, the Cato Institute was asking whether we had been lulled into a False Sense of Insecurity? In Lebanon, Evidence mounts that Qana collapse and deaths were staged.

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That Dismal Science

• Inflation remains an issue. Slate's Dan Gross looks at The Rising Cost of Living Well. Meanwhile, stagflation is The comeback kid. Oh, and have a look at the graphics at The Changing Dollar. Lastly, Gas Costs Eat Into Restaurant Sales.

• Look who's caught up to reality: The economists who participate in The Wall Street Journal's Monthly Economic Forecasting Survey. (If no WSJ subscription, go here.)

• What are the odds of an economic meltdown? Depends upon whom you ask:

- 30% chance of recession sometime in the next year (according to Berkeley's Brad DeLong).

- 30% chance based upon the inverted yield curve (according to this 1996 Fed paper).

- 40% chance (according to the Estrella/Mishkin model, if the yield curve inversion reached 50 basis points).

- Less than 50% (according to James C. Cusser, a senior bond manager at Waddell & Reed).

- 50% to 70%, due to investors' "fairy tales" (according to NYU's Nouriel Roubini).

• It's not all doom and gloom: Job Market Heats Up In Silicon Valley.

• I believe housing continues to be the key to the slow-motion slowdown.

• One of the bigger issues is APRs: Strapped Homeowners Start To Feel the Pain of Rising Rates. Just be glad you don't own one of The Houses That Wouldn't Move.

• Are Economists Too Optimistic on Housing's Soft Landing?

• Ohio and California mortgages have seen default notices soar, and yes, foreclosures are on the rise -- but they are still far below historical peaks.

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Investing News

• MSN Money's StockScouter loves utilities.

• Trannies Begin New Leg Down. (We've mentioned this a few times this year.)

• Good warning signal: Five phrases that signal a fund manager is covering up. You shouldn't hesitate to cut loose any fund where you've lost confidence in the manager.

• The Rising Dividend Investing blog observes: Cash is King. Is this one of the Signs of a Risk-Averse Market?

• A pair of prediction market notes: Tradesports seems to be the only ones on the planet refusing to acknowledge the North Korean missile test, and Chris Masse explains why this is a debacle in The TradeSports/InTrade's North Korean Missile contract snafu. BusinessWeek offers the CEO Guide to Prediction Markets.

• Fascinating look at how Man Financial has risen to become a powerhouse.

• BusinessWeek looks at what's Behind Earnings' Surprising Strength. John Hussman wonders why Record Profits Don't Excite Corporate Executives.

• Interesting new blog: Capital Chronicle.

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Technology/Science News

• The Myth of the Living- Room PC.

• Might Apple(AAPL Quote) get delisted?

• Is Google(GOOG Quote) a model for hedge funds?

• Can we get unlimited Energy From the Restless Sea?

• AOL's disturbing glimpse into users' lives.

• State of the Blogosphere, August 2006.

• Zero to 60 in less than 4 seconds. Oh, and it's electric.

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Music, Film, Books, Etc.

• I've mentioned The Party Party before, but for some reason, this mashup has been making the rounds again.

• Some years ago, I really enjoyed Dava Sobel's Longitude. I just started The Planets by the same author.

• The Los Angeles Times has a long expose on the man behind the Girls Gone Wild video empire.

• A double backflip on a motorcycle. (This is pretty amazing.)

And that's all we have from 6,000 feet. Enjoy the rest of your weekend!