“With stocks tied to bonds, bonds tied to housing, housing tied to the credit crisis, and everyone hitched to the government, this was all like the conga line to the poor house.” -Craig Rappaport, wealth manager at Janney Montgomery Scott

Todd Harrison writes: In a free-market system –such as we used to have –inefficiencies would be naturally resolved by supply and demand. In the current world, a “man made” readjustment, such as a meaningful currency move that significantly devalues the U.S. dollar becomes increasingly likely.

Todd Harrison wrote in January: “Our current course has ominous ramifications for the dollar. As the greenback is the world reserve currency, those implications extend throughout the global landscape. A currency holds a nation together and the economy — perhaps society at large — assumes more, not less, risk as a function of the path of our attempted fix.

“Structural: As the equilibrium between asset classes remains elusive, the single greatest risk remains a seismic shift in currency markets. Therein lay perhaps the most profound path of maximum frustration, one that punishes the savers who proactively prepared for the current crisis. While negative sentiment creates fertile ground for bear-market rallies, aggregate risk appetites contract and voluntary and involuntary thrift collide. This continues to manifest despite efforts by government officials to induce borrowing rather than allowing for the painful, yet necessary, debt destruction required for a more stable economic foundation. Social mood and risk appetites will determine our financial fate and, by extension, the way we live our lives. That proved positive during the era of conspicuous consumption but is troublesome as we edge through the age of austerity.”

Writes Todd Harrison, reviewing his January thoughts: “The age of austerity has officially arrived and we’ll see a steady stream of social strife as the rejection of wealth increases in size and scope. While societal acrimony began to percolate last year, this dynamic will manifest through social unrest and geopolitical conflict as we edge ahead.

”This is, without question, the single biggest socioeconomic risk as we stand at a critical crossroads. On the one side, there is orderly debt destruction that will ultimately pave the way for true globalization. On the other, there is isolationism and protectionism as sovereign nations protect their interests at any cost. If calmer heads don’t prevail and the global community takes a turn for the worse, history books will likely point to Shock & Awe as the beginning of WW III. You don’t have to agree with this assessment; you simply have to respect it.”

“With saber rattling on the currency front (not to mention the general direction of stateside social mood) is proof positive that this unfortunate theme seems to be playing out.

“There is a palpable likelihood that the global balance of powers will fragment into 4 primary regions: North America, Europe, Asia and the Middle East, with ramifications which would manifest through social unrest and geopolitical conflict,” writes Todd Harrison at Marketwatch.com.

Writes Todd Harrison, the seeds of discontent have been sowing under the surface for years, with the greenback off 30% since 2002. It is his view that the stealth recovery actually began at the turn of the century, with the March 2000 top for the NASDQ. And we then are halfway towards what he calls a stealth recovery one way (globalization via debt destruction) or the other (isolationism and global friction).

Todd Harrison now writes about the dollar: “If drugs continue to be injected which mask symptoms rather than address the disease (medicine in the form of debt destruction), the likelihood of a seismic readjustment increases in kind.

“As governments take on more risk—as they price assets on behalf of the market and transfer debt from private to public—the common denominator, or release valve, becomes the currency.”

Asset classes will, as a whole, deflate, and my economic condition measured in greenback will appreciate. And so will my taxes. To pay for it all.

With quantitative easing came a concern for flight of capital from the U.S.

A position paper was written by the Federal Reserve a few years back, discussing the option of a two-tiered currency, one for U.S. citizens and one for foreigners.

Harrison’s January thought was: “The unfortunate aspect of our current conundrum is that in many ways, the cancer is bigger than the patient. It is analogous to a financial dike springing holes faster than the government can invent fingers.”

Joining the growing chorus questioning the U.S. dollar’s unofficial position as global reserve currency, in India, chairman of the Prime Minister’s Economic Advisory Council, Suresh Tendulkar, is urging India to diversify its foreign-exchange reserves and hold fewer dollars, according to Bloomberg News.

Zeng Peiyan, the head of China Center for International Economic Exchanges and the former Chinese Vice-Premier, in a speech in Beijing on Friday called for a new system to ensure the stability of the major reserve currencies, the China Daily reported.

Tensions mounting between the People’s Bank of China’s economic concerns over China’s holdings of dollars, with the earlier call by central bank chief Zhou Xiaochuan for the development of a new super-sovereign currency largely taking the place of the dollar, and the Chinese government, with their “diplomatic reasons” for toning down their criticism, said Stephen Gallo, head of market analysis at Schneider Foreign Exchange. The Chinese government is still more happy to play to the tune of the Bernanke-Geithner camp which sees leaning against the wind in order to protect the U.S. dollar as a necessary evil,” Gallo said.

Writes Todd Harrison: “There is clearly risk to that region but we must remember they have a 25-year head start down Deflationary Road. Japan has the highest level of savings relative to private debt. Their public debt is horrendous but what is happening over time—and why the Yen is appreciating—is that Japanese savers are bringing those savings back to Japan.

He notes that thee Nikkei entered the 2009 half-time up 13% vs. a 3% loss in the DJIA and a 2% gain in the S&P.

“You can’t spend relative performance, we know, but I expect Japan to out-perform U.S. equities this coming year.”

The story over the next 3 years will be about the value of the U S dollar.

If drugs continue to be injected which mask symptoms rather than address the disease (medicine in the form of debt destruction), the likelihood of a seismic readjustment increases in kind, writes Todd Harrison, about the dollar. “As governments take on more risk—as they price assets on behalf of the market and transfer debt from private to public—the common denominator, or release valve, becomes the currency.” Asset classes will, as a whole, deflate, and my economic condition measured in greenback will appreciate. And so will my taxes. To pay for it all.

The seeds of discontent have been sowing under the surface for years, with the greenback off 30% since 2002.

With quantitative easing came a concern for flight of capital from the U.S. A position paper was written by the Federal Reserve a few years back, discussing the option of a two-tiered currency, one for U.S. citizens and one for foreigners.

Joining the growing chorus questioning the U.S. dollar’s unofficial position as global reserve currency, in India, chairman of the Prime Minister’s Economic Advisory Council, Suresh Tendulkar, is urging India to diversify its foreign-exchange reserves and hold fewer dollars, according to Bloomberg News.

Zeng Peiyan, the head of China Center for International Economic Exchanges and the former Chinese Vice-Premier, in a speech in Beijing on Friday called for a new system to ensure the stability of the major reserve currencies. China Daily reported.

Tensions mounting between the People’s Bank of China’s economic concerns over China’s holdings of dollars, with the earlier call by central bank chief Zhou Xiaochuan for the development of a new super-sovereign currency largely taking the place of the dollar, and the Chinese government, with their “diplomatic reasons” for toning down their criticism, said Stephen Gallo, head of market analysis at Schneider Foreign Exchange. The Chinese government is still more happy to play to the tune of the Bernanke-Geithner camp which sees leaning against the wind in order to protect the U.S. dollar as a necessary evil,” Gallo said.

There is a palpable likelihood that the global balance of powers will fragment into 4 primary regions: North America, Europe, Asia and the Middle East, with ramifications which would manifest through social unrest and geopolitical conflict, writes Todd Harrison at Marketwatch.com.

After the first pitch with two outs in the ninth, San Diego left fielder Kyle Blanks began walking in from left field: “I kind of saw one or two floating around my head. Then I turned around and there was a wall. I started to walk in and tried to get Everth (Cabrera) to call time. … It was a pretty thick wall of bees and I really didn’t want a piece of it.”

The game was halted at 3:09 p.m. At 3:14 p.m., both teams were cleared from the field at Petco Park. In San Diego. A bee stoppage in the top of the ninth inning. A few thousand bees attached themselves to a queen bee. At 3:56 p.m., the beekeeper arrived. After quickly doing his job, the beekeeper sprayed a chair and the jacket of the ballgirl, along the warning track down the left-field line, and the game resumed at 4:01 p.m.

The game started after Troy Aikman, who bought a stake earlier this year in the Padres with his Jeff Moorad, the long-time player agent, had thrown out the a first ball.

The Texas Rangers approach the All-Star break in first place. But a lot has been brewing behind the scenes.

In 2007 Tom Hicks partnered with George Gillett, Jr., to buy the Liverpool team of the English Premier League. In 3 weeks they face a July 24th deadline to refinance the $574 million debt for their Kop Football (Holdings) Ltd. There was a time not long ago when the commissioner of baseball did not allow an owner to have an interest in other professional sports franchises.

It is fairly common for such ownership to extend beyond just a baseball team. Jerry Reinsdorf owns the Chicago Bulls and the Chicago White Sox (with Eddie Einhorn), and is trying to buy the Phoenix Coyotes in the NHL. Mark Cuban has attempted to add the Chicago Cubs to his holdings along with the Dallas Mavericks. There was quite an appetite in Texas for ownership in teams beyond just the winter sports seasons, as if these winter sports did not extend the season long enough. In this case, the leaders at the forefront of the British banking crisis, the Royal Bank of Scotland and Wachovia, had provided the financing to Hicks and Gillett for the 2007 purchase.

How does a league like the NHL allow competing owners to go into partnership to acquire an English soccer team? The conflict of interest extends beyond the financial operation but offers a lack of transparency in any potential trades between organizations. As a consequence of the partnership to buy the Liverpool team, 2 NHL teams had been on the path to financial ruin when neither owner apparently was able to secure soccer re-financing in the current environment. On June 20th, Gillett agreed to sell the Montreal Canadiens, the Gillett Entertainment Centre and the Bell Centre back to Molson Brewery, the entity which he had staked his majority purchase. Gillett made his fortune through sports franchises, developing Colorado real estate for skii resorts, and in meat packing companies.

Tom Hicks sale of his NHL hockey and MLB baseball franchises is now widely anticipated. Tom Hicks was the guy who re-invented baseball by giving Alex Rodriguez $260 million to play baseball. Tom Hicks is the guy who hired some twenty-something kid to run his major league team who in June drafted 2 pitchers whose agents’ demands far exceed the slotting system that has developed following the June free agent draft. Tom Hicks was the guy who never really paid attention to pay slots.

Earlier this year according to the Wall Street Journal, Hicks Sports Group missed a $10 million quarterly interest payment on March 31st, triggering the default notice on a $525 million loan. There were layoffs of several front office personnel 2 weeks ago with his MLB team. As the owners of the Texas Rangers and the Dallas Stars, Hicks looks as financially secure as the state of California. Hicks recently sold his rodeo. He now reportedly wants to sell a majority share in his Texas Rangers which he acquired in 1998.

Last night I attended a Northern League game in St. Paul, Minnesota. The owner of the franchise owns more than one team in the same league, making a mockery of competition, turning baseball into a version of the American Wrestling Association, a la Vern Gagne. There was a bit of a house of card beyond the playing field with this type of ownership.

The sale of the Montreal Canadians will not be the first sports franchise to occur due to the crash of 2008. In the next 12 months, a financial storm will come faster than the last Atlantic hurricane to professional sports, causing havoc throughout the sporting globe.

Unrest. Unease about the economic outlook. There was a lot of restlessness out there. Unrest beyond the stories out of Iran. Unrest in the market. Marketwatch reported that the dollar gained against the Euro but declined against the yen, “in a pattern that has frequently emerged when traders grow nervous about the outlook.”

Money and fate and relationships. These were the major ingredients in a love story. Any love story. Money and the times always provided the ambiance to the story. In all relationships, actually. Even with the new BRIC nations. Amidst this unrest and unease about the economic outlook.

Alfred G. Rava initiated a class-action lawsuit against the Oakland A’s after he wasn’t given a commemorative plaid sun hat being handed out to women at an A’s-Twins game on Mother’s Day 2004 as one of the first 7,500 ladies arriving at McAfee Coliseum for the game. The Oakland A’s have reached an out of court $510,000 settlement with the biological male, who happens to be an attorney.

Alfred G. Rava, the biological male who happens to be an attorney, also initiated similar class action lawsuits against the San Diego Padres and Los Angeles Angels of Anaheim, claiming a violation of his civil rights under gender discrimination.

According to freelance writer Joe Kukura, biological male attendees of that Mother’s Day game may come forward and claim a $50 plus 2-for-1 A’s tickets and a Macy’s gift card. The Mother’s Day hat promotion had followed the breast cancer research fundraiser in a 5 kilometer “Race For a Cure,” in support of breast cancer research.

In other news, as federal judges are bound by a code that says they should not join any organization that discriminates by race, sex, religion or nationality, Supreme Court nominee Sonia Sotomayor resigned from an elite club for women on Friday.

The word for the day is TOILETS. I just came home from a visit to the stockbroker. I presented my theory about globalization. Asia was the place where capitalism was booming. If that was the case, I proposed, these were the people who were the target for comforts from the west.

Call it global positioning.

Your Twins Radio Network. This year when John Gordon is given under his new contract vacation time, Kris Atteberry will be stepping in. Who exactly is this guy?

So from the world wide web comes the following:

Kris Atteberry, 34, is a native of Bozeman, Montana, a student who attended a one-room schoolhouse in Bozeman through the 8th grade before heading out east to The Hotchkiss School, an independent boarding school located in Lakeville, Connecticut. Repeating the 10th grade was a condition of admission to Hotchkiss. A 1992 graduate, he then attended Stanford University where he met his future wife, Jennifer Posthumus, at a Stanford summer sports camp. She was ranked 10th in women’s foil and had an outside shot of joining the Olympic team. Atteberry was staying on campus for a radio internship; she had attended Cal, and was training for the Olympics at Stanford where her mother was the women’s fencing coach. In 1996, he graduated Stanford with a degree in English Literature. Atteberry then sent out demo tapes to minor league baseball teams around the nation who showed little interest. Then came the tip from a friend that a radio job had opened up in Cody, Wyoming at KODI-AM. Soon Atteberry was serving as the voice of Montana State football and basketball for the five years, as well as the voice of the St. Paul Saints on radio and television before joining the Twins Radio Network team in 2007.

Former Hotchkiss American Studies school teacher Tim Katzman, now director of corporate communications for the San Diego Padres, had contacts within the Twins organization and was able to put in a good word for Atteberry.

And this quote from Andy Price, director of game presentation and broadcasting for the Twins in a Hotchkiss Alumni Magazine, who had 275 other applications:

“Price said, ‘When I heard Kris’s demo, I heard the talent and liked his background. And we wanted a younger guy who was hungry and would work his tail off to get his shot.’”

With this admission, it sounds like Andy Price set out intent on age discrimination and gender discrimination before landing the new voice of the Minnesota Twins. The Twins had retired that Jackie Robinson number 42, but seemed unclear on what the total concept of discrimination entailed.

Atteberry does a nice job with the post game show.

The sound of Twins’ baseball in 2009. Priceless.

It should be Priceless.

Your Twins Radio Network.

The discussion of Japanese baseball. And a guy named Bass. Dan Gladden knew his last name. John Gordon never heard of him. Oh my!

Randy Bass had come up through the Twins farm system and had made the Twins major league roster. Before he was sent to Japan.

Somehow I expected my Twins’ announcers to know this kind of detail. If the Twins Radio Network actually hired a real Minnesota Twin. Charlie Manuel. Boomer Wells. went to Japan, with the Twins receiving some compensation from the Japanese.

Your Twins Radio Network. Priceless.

Delmon Young’s footwork looks a lot like he is a disciple of Charlie Lau. Two of his 25 hits have gone for extra bases in 2009. Charlie Lau was dead by the time Young started to play baseball. Charlie Lau never hit for power either, with 88 extra base hits including 16 home runs over 10 seasons with 1170 at bats. Watch Delmon Young’s foot work and you discover why he gets nothing but singles.

Is the nickname for The Hotchkiss School “The Kissers?”

The National Association for Business Economics released a report Wednesday that more than 90 percent of economists predict the recession will end this year, although the recovery is likely to be bumpy.

That assessment is in line generally with the Federal Reserve Chairman outlook of Ben Bernanke. About seventy-four percent of the forecasters expect the recession — which started in December 2007— to end in the third quarter. Nineteen percent predict the turning point will come in the final three months of this year. The remaining seven percent believe the recession will end in the first quarter of 2010.

This National Association for Business Economics report followed a report on October 6, 2008 that 31% of economists did not think there was a recession. So 10% of the economists did not see an end to the recessions, with 31% of economists proven to be out of touch with the current world.

Has anyone checked the market in commercial real estate? When there was too much credit in the system, something had to give.

I wrote on October 6, 2008 that there was going to be another at least 25% to 30% correction in the valuations of homes. Real estate prices had fallen 23.3% in Minneapolis-St. Paul in the last 12 months. So there were signs that an honest correction had occurred at least in single family homes.

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Markets.

Deflation overseas continued to be in the news. The news from the UK was that in the 4th quarter of 2008, the economy had contracted 1.6%. Office for National Statistics yesterday announced that GDP in the UK fell 1.9% in the 1st quarter when compared with the prior quarter. This was the largest decline since the 3rd quarter of 1979. MarketWatch reported that year-on-year, GDP was down 4.1%, much larger than the 2% decline seen in the fourth quarter.

There then was a downgrade from Standard & Poor’s Corporation in the UK ratings outlook. Yet today MarketWatch is reporting that the dollar fell to the lowest level versus the Euro since December on Friday, as traders looked for alternatives to the U.S. dollar. It additionally was stated that fears about the global economy were abating. Whose analysis was that?

At the same time, the central bank of Japan upwardly had revised its economic view for the first time since July 2006, leaving the key interest rate unchanged at 0.1% and expanding the range of eligible collateral to ensure financial market stability.

Who trusted the Bank of Japan, based on their reported of real estate valuations in their portfolio over the last 10 to 15 years of their own crisis?

With worry that the debt level in the UK may result in its credit rating being cut, there was new concern about the massive U.S. deficit, with the falling US dollar notching fresh multi-month lows against the Euro, pound, and yen.

The battle was waging between forces of deflation in many countries on the continent overseas, with government in the United States and the United Kingdon promoting hyper-inflation. This was the same battle reflected in LIBOR rates on October 1, 2008.

No ratings agency has issued any new comments on the credit rating of the U.S.

How to protect capital in times of crisis? Is there a real alternative to the dollar?

The Euro reached a high against the dollar at $1.4008, its highest level since Jan. 2, 2009.

The pound recovered from the turbulence it suffered in the wake of the S&P announcement Thursday and set a new high for 2009 at $1.5937. Why?

Pension funds, insurers, and institutional investors, are pouring back currency flow into Great Britain, supporting the British pound and exchange traded fund (ETF). According to Boston-based State Street Global Markets LLC, in the 60 days to May 13, the money flows were 99% higher than any comparable period since 1997.
The depressed pound is actually a way to play distressed assets with potential for the upside, says Joe Weisenthal. The pound gathered strength today after the Bank of England voted to hold the key interest rate at a record low of 0.5%, says RTT News.