The US employment numbers came out this morning, and they were disappointing. But disappointing does not begin to describe the situation I read about today in Europe. I have just finished up with my conference in Carlsbad, California and am getting back to the room late. I have to get up in a few hours (4 AM is rather obscene) to fly to Tulsa to see my daughter graduate from university, but wanted to drop you a note as I normally do on Friday night. But given the time and the need for some sleep, tonight I will draw your attention to the writing of a few friends and some of the more interesting charts I saw at the conference. It will be a shorter letter than usual, but we will uncover a few real nuggets; and next week I will be back to a more normal writing schedule.

On May 22 I will be doing a webinar with my conference co-host, Jon Sundt of Altegris Investments, where we will talk about what we heard at the conference and some of the material I covered in my speech. This webinar will be a great way for those not able to attend the SIC conference to get a sense of its scope and depth. Because of the nature of the material, and due to SEC regulations, we will need to limit the webinar to accredited investors. If you have already registered at my Accredited Investor website, you should be getting an invitation. If you have not registered and would like to listen in, you can go to www.mauldincircle.com/ and sign up. The call will be at 11 AM Central Time. (In this regard, I am president and a registered representative of Millennium Wave Securities, LLC, member FINRA.)

Also, I will be in Atlanta May 23 (details at the end of the letter). And now for some "nugget hunting."

It was only a few years ago that I use to sit down at this computer on Friday and wonder what I would write about. In today's environment, there is enough to write three e-letters and still leave interesting copy on the editing floor. Today we look at the rather disturbing developments in the municipal bond market, Warren Buffett's offer to "rescue" the tax-exempt insurers, and ponder what the resolution will be. We also look at corporate earnings, and note how they have been downgraded significantly over the last year. There is (or will be) a connection between stock market prices, valuation, the current credit crisis, and the economy. There is a lot of ground to cover.

But first a quick note about my 5th annual Strategic Investment Conference, to be held in La Jolla April 10-12 (co-hosted by my partners at Altegris Investments). Paul McCulley of Pimco, Don Coxe of BMO (two of my favorite economists anywhere, and simply brilliant speakers), Rob Arnott, George Friedman of Stratfor, as well as your humble analyst and a dozen hedge fund managers who will show you how they navigate in these troubled waters. By the way, George's new book should be at the conference ahead of the bookstores. He has been writing on how the geopolitical world will change over the coming century. I have read a rough copy, and it is fascinating.

The evidence continues to mount that the US is in a recession. In this week's letter, we will look at the blind spot in the unemployment statistics, the continuing meltdown in the credit markets, and the simply awful service sector implosion in the ISM data, and then add a few thoughts on the housing market. There is a lot of data to cover, so this week's letter should be particularly interesting. The letter will print longer than normal, since there are lots of graphs.

But first, we are finalizing the speakers for my annual Strategic Investment Conference (co-hosted with my partners Altegris Investments) in La Jolla April 10-12. I am extremely happy that Greg Weldon has been able to clear his schedule to attend. Long-time readers know that Greg is one of my favorite analysts, with his uncanny ability to tease the most important facts out of the fog of data we are deluged with each week. He has been on top of the whole credit crisis for as long as anyone, and his thoughts on what is coming next will be valuable. Greg joins Paul McCulley of Pimco, Don Coxe of BMO (two of my favorite economists anywhere, and simply brilliant speakers), Rob Arnott, George Friedman of Stratfor, as well as your humble analyst and a dozen hedge fund managers who will show you how they navigate in these troubled waters. By the way, George's new book should be at the conference ahead of the bookstores. He will be writing on how the geopolitical world will change over the coming century. I have read a rough copy, and it is fascinating.

The conference is limited to those with a net worth of over $2,000,000, due to regulatory requirements. I simply hate to put limits like that, but rules are rules. You must register at http://www.accreditedinvestor.ws and subscribe, someone from Altegris Investments will call you (again, a regulatory requirement), and send you the detailed invitation about the 2008 conference, including a link to past and current conference speakers and details.

What does a recession look like? How does it feel? What does it mean for your life and your investments? We explore these questions and more in this week's letter. I have been working on this letter all week, and think you will find it interesting.

But first, one interesting observation and a request for help on a fun project. Last week, I was in Europe. I walked across the street from my hotel in Geneva and was delighted to see a Starbucks. While I initially made fun of people who overpaid for a nickel cup of coffee (the price of my youth, which dates me), eventually I became hooked. I now have a venti decaf every morning on the way to work (venti being the Starbuck's code word for large). When I am feeling particularly adventurous I live on the edge and get a venti half-caf (half regular caffeinated coffee). The price in Dallas recently increased 5% to $1.95 or $2.11 after tax.

I ordered the same thing in Geneva and paid 6.7 Swiss francs which is like $6.43 or three times what I pay in Dallas. The fancy drinks were over $10. And the place was packed at 10 am in the morning. (Memo to returning Starbucks chairman and CEO Howard Schultz, the coffee was decidedly inferior.)