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 U.S. stocks rebounded slightly yesterday… major indexes regained half what they lost the day before. Lower oil and gas prices helped, as did a “decent” manufacturing report. The 10-year note’s yield climbed again to 5.19%.
 A recent survey reveals three out of four Americans have not yet changed their spending habits in response to housing’s downturn. The Boston Consulting Group also released these results yesterday:
- 74% of Americans said they would be able to sell their home in less than 6 months for a price they think it’s worth
- 55% are “confident that their homes continued to increase in value compared with a year ago”
- 85% of those polled believe their home will rise in value over the next 5 years.
 The Blackstone Group -- one of the world’s largest private equity investment firms -- goes public today. Its initial offering is a whopping $4.75 billion -- the sixth largest IPO in history. Not to be outdone, rival group Kohlberg Kravis Roberts announced it too might be traded publicly in the near future.
 “The buyout binge continues to amaze me,” comments Chris Mayer. “The number of private equity deals in the U.S. this year exceeds last year’s total threefold,” and far exceeds the market top in 2000. Mayer cites the work of Fred Hickey, editor of the Hi-Tech Strategist:
“Nearly $2.5 trillion of merger deals have been announced worldwide this year, about 50% more than the same period in 2000. Deal prices are running about 12.1 times the target’s cash flow, versus 9.7 times in that crazy 2000 period.”
And… virtually all of these deals are financed by debt. In the month of May alone, according to Bank of America, U.S. companies raised $143 billion in debt -- a new record.
“When will it come to a head?” asks Mayer. “And who will be left holding the bag?” As Warren Buffett has pointed out, the problem with private equity deals is that there is no score card. “We won’t know whether these deals are good deals until years have passed,” Chris writes. “That’s good for the promoters, who continue to raise money to finance the next deal. It’s not so good for their investors.” Find out more.
 “Last night, the U.S. Senate passed a new energy bill,” reports Dan Amoss of Strategic Investment. “With the stroke of a pen, they’ve solved all of our problems: increased fuel efficiency, reduced reliance on foreign oil -- and saved the world from global warming.” (Yay! Uproarious applause!)
The bill (which still must pass the House) would:
- Increase the use of biofuels to 36 billion gallons by 2022
- Set penalties for gasoline price gouging
- Give the government new powers to investigate oil companies' pricing
- Provide federal grants and loan guarantees to promote research into fuel-efficient vehicles
- Seek to store carbon dioxide captured from coal-burning power plants underground.
Phew! We’re so glad they’re on the case.
Too bad Congress produces five or 10 “unintended consequences” for every problem they think they’re solving. “This bill is no exception,” says Dan. “If only the real world were as simple and easy as it is in the fantasyland they call Capitol Hill.”
“The energy return on energy invested of corn-based ethanol is about 1.3:1 -- it transfers the energy contained in the supply chain -- fertilizers, pesticides, planting, harvesting, distilling and transportation -- into a fermented fuel with a much lower Btu content than gasoline.
“Take away the government subsidies and the market would quickly discover that this is a bad direction. It’s hard enough for the free market to help solve our huge long-term energy challenges; the last thing we need is for the government to ruin the adjustment process.”
(Congressman and presidential candidate Ron Paul has been ringing the “small government” bell louder than ever, and a rush of media attention has put him in quite the spotlight. Our colleague and dutiful revisionist Dave Gonigam addressed Paul’s “missed opportunity” during his recent wave of exposure in the latest Whiskey & Gunpowder exposé. Click here for the full story.)
 “A combination of bad weather, plant disease and insect problems has decimated thousands of acres of winter wheat across the U.S. plains,” Reuters reported yesterday, confirming what Kevin Kerr has been telling us all spring. Earlier this year, wheat had the “makings of a bin-busting crop.”
But now, “the crops are hurting,” Kevin reiterates, “there's no two ways about it.” Coupled with record-high prices, booming Chinese demand, fields being excessively planted with corn (thanks, ethanol) and poor growing conditions abroad, wheat is having an extremely tough year. Kevin’s been short these grains all spring… and loving it. Click Here to find out more.
 This week, Iraqi President Jalal Talabani plans to ask the Chinese to revive a $1.2 billion oil deal originally established before the U.S. unleashed its “Shock and Awe” campaign against Saddam Hussein’s army.
“Isn’t it ironic?” asks Christopher Hancock. “After spending nearly five years and $500 billion, we're left with a divided Iraqi government that controls the world's third largest proven oil reserves… openly seeking Chinese assistance in fixing their domestic production.”
“You have to hand it to the Chinese,” admits Christopher. “I don't remember any cries from Beijing over the past five years over losing their $1.2 billion oil exploration deal. They basically sat still and waited. While America's international image eroded, the world's opinion of the Chinese has only strengthened.”
“Before you know it, the Chinese will have established deep economic ties with governments all over the globe. And they'll never use force... They know it’s best not to use a cannon to crush a mosquito.”
Shares of PetroChina surged on the news.
 The Japanese yen hit a 4½-year low versus the dollar yesterday. This month alone, the dollar has climbed 2% against the yen. The Rising Sun’s currency also sits at a 15-year low against the pound, and a 20-year low against the New Zealand kiwi. Traders borrowing in yen and saving in kiwis are still enjoying the ride, despite efforts in Auckland to slow the yen carry trade down.
 The Swedish krona is on track today for its biggest five-day gain against the dollar since 2000.
 Normally, in this space, we’d pass on a few comments from fellow readers of The 5. Not today. Our e-mail servers have been in the dumps for two days. Despite our prods, pleas, groveling, bribes and idle threats, our tech guys say there’s no solution in sight. If you’ve written, thanks… and bear with us while we get our act together.
Best regards. Have a wonderful weekend.
Addison Wiggin
The 5 Min. Forecast
P.S. Earlier this year, we discovered that retired ballplayer Lenny Dykstra is a reader of Agora Financial newsletters. “Nails” occasionally writes a column for TheStreet.com, and while doing an interview with Fortune, he mentioned he got a lot of his investing ideas from the guys you’ve come to know through The 5 Min. Forecast.
“I am proud to say,” Lenny wrote, "Agora Financial's newsletters are one of the biggest reasons I have become the ‘winning investor’ I am today. Please tell your whole staff: THANK YOU!”
No… thank you.
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Monday. June 25, 2007: 
