Here are a few articles to think about over the weekend:

1. Mortgage Damage Spreads (Legal problems now are the debacle in the housing market. The economy will not fully correct until the housing market stabilizes, that looks to be further down the road than previously thought by many.)

2. Flashback to 1870 as Cotton Hits Peak (The Lubbock economy looks destined to get a further economic boost as cotton prices hit record highs. Here are a few key lines from the article that reveals this: "The sudden surge in prices—cotton has risen up to 56% in three months—has alarmed manufacturers and retailers, who worry they may be forced to pass on higher costs to recession-weary consumers. The December cotton contract hit $1.1980 a pound minutes after the opening of trading on the Intercontinental Exchange Inc. on Friday. It is officially the highest price since records began back in 1870 with the creation of the New York Cotton Exchange."

3. Bernanke Argues for More Fed Action (Big surprise here?!? I think not. With core CPI data out today showing prices excluding food and energy only increased by .8% over the last year, GDP growth of 1.7% in the 2nd Q, and estimates of GDP growth in the 3rd Q between 1.5-2%, there is cause for concern by those on the FOMC. Much of the bang for the buck from their proposed QE2 seems to have already taken place, see previous article about a falling dollar and increases in commodity prices, from the increase in expected inflation due to excessive money growth.) Here is the full speech given by Chairman Bernanke today.

4. For Fed, Goosing the Market is Worth It (Great review of what the Fed has been doing and what the costs and benefits are for further action. See the figure below that shows the impact on various assets since the Fed announced that they were considering QE2. Artificial increases in assets is what lead to every financial crises and bubbles. Do we smell something fishy here again?)

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