The good news is it drives the economy. The bad news is it adds to the household debt burden.

As the news this morning of increased joblessness and earlier reports of exploding deficit and debt reveal, the president's economic policy is a disaster. Obviously, the secretary of the treasury and Mr. Lindsey are being sacrificed to protect the president. Sadly, the removal of these economic officials will do nothing if they are simply replaced with yes-men committed to the president's relentlessly partisan agenda of pushing tax cuts at the expense of all else.

Do not accustom yourself to consider debt only as an inconvenience; you will find it a calamity.

The time to sell debt is approaching. The production data showed Japan's economy is expanding and it may give the central bank more confidence to change policy. Bonds will probably stay heavy.

European debt is pricing in a perennial recession. Sooner or later the European economy will revive and then we will see bond prices fall. On a relative value basis, we much prefer to hold Singapore bonds.

The news should improve in the second half as likely Fed rate cuts begin to affect the economy and earnings momentum improves on easy comparison,