• 157,000 new jobs in May… so how come GDP’s in the toilet?
• The S&P’s high on dollars... but what about euros, pounds, oil, gold, houses or corn?
• Chavez’s nemesis -- Radio Caracas Television -- back on the air… sort of.
• The Achilles’ heel of the information grid bodes well for energy companies
• A potential perk so good even the Spanish government wants a piece
• “Get a life, you lunatic,” says a reader… will The 5 respond?

The May jobs report showed a net gain of 157,000 jobs… nearly double the revised 80,000 jobs in April.

We don’t mind seeing a stronger-than-expected labor market. But we’re a suspicious lot. “The data only tell us how many jobs were created,” comments our friend Chuck Butler, “not what type, and certainly not who filled them.”

So how come the markets get so lathered up over data?

The S&P 500 closed up half a point -- a new record high.

What do record highs in the Dow and S&P really mean for investors? Well, that depends on your perspective. The S&P may be high on dollars, but look at it against the euro or the pound. If you’re an investor from Europe, you’ve gotten crushed over the last four years…

Notice too what the S&P has done against houses, gold, oil… or even corn. Oy vey. These record highs are great for the financial media. We cribbed this chart, BTW, from The New York Times.

"It's only when the tide goes out that you get to see who's been swimming with their trunks off," said Warren Buffett once. According to Dan Amoss, private equity investors have been skinny-dipping for a little too long.

“At the current market high tide,” writes Dan in this morning’s Rude Awakening, “many believe that easy credit can fund the buyout of any company at any price. But as surely as low tide follows high tide, tighter credit conditions will suck imprudent private equity deals out to sea, drowning many investors in the process... and exposing the flaws of an investment strategy that values momentum and pole-vaulting.”

If you missed Dan’s piece in today’s Rude Awakening, you can find it here.

The economy grew 0.6% annualized in the first quarter of 2007, the Commerce Department reported yesterday. That figure is down from its initial estimate of 1.3%. The first quarter marks the slowest growth in the U.S. economy since the fourth quarter of 2002.

For the quarter, exports fell nearly 1% -- the biggest drop since 2003. Imports jumped up almost 6%. Government spending rose 1%. House prices increased 0.5%, the slowest increase in 10 years. And consumer spending increased nearly 5%.

“What is most interesting to me,” writes Mike Shedlock, “is the financial media have taken this as an ‘optimistic report.’

“It is not.

“GDP was up a mere 0.6% in spite of very robust consumer spending. If plus-0.6% GDP is all we can muster with strong consumer spending, it should be obvious what will happen when consumers toss in the towel.”

“The insatiable need for power is the Achilles’ heel of the tech world,” our Chris Mayer reported this morning. Mayer says new servers, faster processors and more memory eat up electrical power… and produce lots of heat. They require more energy-intensive air-conditioning systems to keep the machines cool and prevent them from crashing. But exactly how much power is needed might “shock” you.

“Forrester Research has found that a typical data center with 2,500 servers consumes as much electricity in one month as 420,000 homes do in a year,” reported Chris. “This unique problem of the 21st century bodes quite well for companies that deliver the world’s power.”

Radio Caracas Television, the news network recently shut down by Hugo Chavez, is back on the air. Sort of. The dispatched broadcasters are posting a daily show on YouTube. Luckily for them, the Internet isn’t on the Venezuelan coast.

Remember last week’s $500 million deep-sea coin discovery? Through our relationship with Odyssey Marine Exploration, the recovery firm and our friend Nick Bruyer, we’re trying to arrange a “first crack” at the coins for you. Well… it looks like we aren’t the only ones angling for the booty.

The Spanish government sued Odyssey yesterday morning. The Spaniards are demanding that Odyssey reveal the identity and location of the ship that yielded this amazing treasure. Odyssey describes the ship as a 17th-century vessel that sank 40 miles off the southwestern tip of England… but will say no more, citing security concerns for the crew.

Spain filled a similar suit back in 2000 and won. Bummer. We’ll keep you posted.

Our exclusive Agora Financial infinity program, the Agora Financial Reserve, is open for new members today… until July 5. The Reserve, as we call it, is an exclusive group of investors who have, for a one-time fee, unlimited access to the investment recommendations of every Agora Financial editor… for life.

The Reserve is such a great deal, we offer it only twice a year. And since we’ve added so many new products in 2007, hired several great new editors and have even more planned for this year, we can’t afford to offer it at the low $4,997 price ever again.

So… one last hurrah! If you’re interested in the Reserve and would like to lock in this great rate, this membership drive would be the time to sign up. Our next offering, in December, will be at a minimum $1,500 higher. We’ll have additional details on our new and planned products later today. Look for them…

“I really enjoy The 5 Min Forecast… keep ’em coming,” requested one reader.
 
“As for the national debt,” he continued, “why don't we just have the world forgive payment, like we did after World War II with our allies and the Axis countries that we rebuilt and fed? Better yet, tell the creditors to foreclose on Uncle Sam… and we'll start over.”

That sounds like a great idea. Can we take a mulligan?

“If all the people who say, roughly, ‘I sure like that Ron Paul. Too bad he doesn't have a chance,’ were to actually vote for him, he'd win in a landslide,” writes another.

Perhaps. We haven’t voted in a long, long time.

“I'm a subscriber to Capital & Crisis,” wrote in another reader, off to a great start. “Chris Mayer seems like a thoughtful and intelligent analyst.” (Good. Good.)

“I don't know how Chris Mayer got mixed up with the rest of you gloom and doom [uh oh], Apocalypse now, disaster is just around the corner, the sky is falling lunatics.” (Not so good.)
 
“Please continue to send me Capital & Crisis [sure], but stop sending me all your right-wing lunatic fringe stuff, including The 5 Min Forecast. [Hmm… right-wing?]. I guess there are enough screwballs in the world to support you people. Chicken Little must be a big, big fan...” (Who’s calling who a screwball?)

“It wouldn't occur to any of you that you should try to figure out what the good reason might be why the dollar is going up against the euro. [That would never occur to us.] That would run against your true religion of Stone Age economics and the True Believer’s head-in-the-sand mentality. Get a life.” (Amen. Praise be to Mammon.)

Umm. We agree. Chris Mayer is a very thoughtful and intelligent analyst. Thank you for reading and have a nice weekend (screwball).

Addison Wiggin

P.S. The dollar rose against the euro this week in response to the release of the minutes from the FOMC’s meeting on May 9. The minutes show the governors of the Fed expect “moderate growth” in the U.S. economy. And they are still cautious about inflation. In the markets, we saw record-high closes of the Dow and S&P 500. All of these factors quelled speculation that the Fed was considering a rate cut that would erode the dollar’s yield, making it more attractive to investors… even if they are worried about record levels of debt.

But you knew all of that, because you read it in The 5 yesterday.