If McLuhan were around he would issue admonitions about high definition television. The television image he spoke about in the 60's was cool, iconic, low definition, and it was partly responsible for John Kennedy's political success.

To project his ideas out fifty some years, we find the internet, has all those television values he mentioned, including involvement in depth, rather than passive viewers. The rural American landscape, and the failure of the internet to penetrate those areas, with deft manipulation of the electoral college system, allowed Bush to be elected, and the war in Iraq found fertile ground in the that half of the American imagination which is deprived of connectivity, cable being a form of passive entertainment. In rural America cable, and its violent content tends to precede internet connectivity.

Republicans, devoid of a platform, simply plugged into this national connundrum, call it Blue state, Red state, or coastal versus central geographic patterns of information dissemination.

If Democrats want to win the next election, they need to pass the rural internet bill, the internet presents an ample challenge to talk radio, and its television counterpart, but only where its footprint can compete with radio, and hot, high definition, cable programming. Additionally many cable companies package their programming to fit a certain demographic. The spillover of this tendency could be felt in rural radio stations, which wanted to ban the Dixie Chicks. The rules of cable suddenly were being applied to other mediums, like radio.

Don't Worry, Be Happy, that's the Reagan mantra, right?

The Telegraph reported that M3, or projected M3, since the government no longer uses that measure, contracted sharply in July. The sharpest drop in history. Its possible to inject liquidity into the economy, only if investors are willing to accept new debt. Lately a lot of that debt is being rolled into money market funds, and that will not monetize anything. A dollar of debt becomes a real dollar only when it is spent on something.

I came by that article by way of Mike Shedlocks column, M3 COntraction - The Future is Now. He regards the m3 action as unordinary. Deflation is the current state of affairs, or to paraphrase, yeah the asteroid is headed to earth, and we're all doomed, what's your point?

Monetizing debt is the key to understanding how the Fed works. A few years ago the methodf involved thirty year bonds in exchange for foreign dollars. But with each iteration since then the duration of the lending has gotten shorter, and the buyers more reluctant.

A shrinking money supply implies a panic to get into the investment paper that the Treasury will repatriot.

A similar thing happened in Japan not long ago, when the BOJ mopped up excess liquidity in their money markets. How they held that cash, or why they owned it is just one of those banking mysteries. Evidently a similar method is at work here, the Fed has issued debt, and those who bought the debt, reluctantly have parked it in a safe place.

The money supply problem is deflationary, which explains the Fed reluctance to raise rates, (Wall Street would love it, as the first rate hike at this point in the business cycle, is like the bell on the gate at the racetrack) the G-8's recent backtracking on interest rate hikes also betrays this weakness. This isn't good but I think the problem will resolve itself, and we will see a rate hike, and the DJIA will go to 14000, sooner rather than later. From there the secular bear market will resume, in spades.

Meanwhile money supply and interest rates bear watching.

They wouldn't even be in this country right now.

I was trying to figure out who picked Peggy Noonan, former Reagan speech writer, to have the last word, and to lay down the gauntlet for Democrats. Is James Carville going to have the final word before the Republican keynote speaker steps up. I also couldn't figure out the cameras obsession with Bill Clintons casual conversation with the red haired woman on his right, but I was starting to get the idea. (you are too aren't you?)

Hillary's speech achieved the objective of breaking the split between PUMAs and the rest of the party, and it also saved the Clintons reputation in the party, because despite all the noise about her rights, there is a substantial movement in the party AWAY from Clintononian politics. Clintonian politics for want of another word is that constant slide toward the center. After twelve years of steady erosion, Democrats don't know what they stand for. Well they stand for universal health care, and they are against the war in Iraq. Those generalizations don't cut it, but Hillary was trying to stay on board, she was not trying to guide policy.

Speeches are made in context, and this one had little or none/ Mrs Obama seemed wrapped in consternation for a good deal of the time. I understand what she was thinking.

Did Sir Bill of Redman get his tribute? I'm guessing they are pirated copies.