Why don’t they tell us the GNP anymore? When I was a kid, they always told us about GNP. We’d stand next to our dioramas (or is it diorami?) of SovietCollective Farms, or Asian rice paddies, and Mrs. Swallow (yes, actual name) would tell us about the GNP of the Soviet Union was such and such, or the GNP per person of whatever country we happened to be focusing on in Social Studies that week was higher than that of the social studies unit from last week.

Then sometime in the 90s GNP was quietly escorted off to some undisclosed location and mysteriously GDP appeared. “Does this have something to do with the metric system?” I wondered. No, it doesn’t. But it still was a bad idea. Here’s why: GDP doesn’t count the wealth which American businesses create in other countries. The D stands for ‘Domestic’ as in Gross DOMESTIC Product. If we make it here, GDP counts it. If we make it somewhere else, GDP doesn’t count it. For many countries, this doesn’t matter much. Their companies produce domestically.

But America is the land of the free and the home of the multinational

corporation. If it weren’t we’d be in a recession right now. We source globally, produce globally and sell globally. Increasingly the domestic function is coordination.

When I used to be a talk show host, the old guys would call me and ask “Do we still make anything in America anymore?”

“Yes”, I’d tell them, “Decisions, we make decisions”.

That’s why even though GDP is the updated euro-metric-system-trendy growth stat; it’s already the least up to date. Like Disco, we dumped good old Gross NATIONAL Product just at the time that the great wheel was turning its way once again, when world trade was starting to explode and America was in the middle of it all. When the world went GLOBAL our stats went DOMESTIC.

So what if we hadn’t? What would things be looking like right now? Basically the surprisingly strong showing among large cap American company stocks would have been a lot less surprising. For the past year or more, GNP has been beating GDP.

In fact, last week’s growth revisions show that the gap is currently running at about a quarter of a trillion dollars per year. I don’t want to get too wonky here, but if I feed my thoughts into the Econo-geek to Plain English Paraphrase Dictionary it comes out to this: The wealth that US based companies are creating overseas minus the wealth that foreign corporations are creating here, is over $200 billion per year right now.

No wonder no one talks about GNP anymore – it’s showing far too much good news.

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Jerry Bowyer is chief economist at Benchmark Financial Network and makes regular appearances on CNBC. He also writes extensively on finance and history for the National Review, UPI, The Pittsburgh Post Gazette, Crosswalk.com, and The New York Sun.

A confluence of events drove oil prices to an all-time high of $135 last week. At the time, I identified this move as a potential market top. Since then, there has been another confluence of events that seems to have spurred a run for the exits by traders. This confirms to me that last week’s high does represent a market top.

Today's headlines are fomenting the decline: Increased production from Saudi Arabia and Kuwait; quantifiable declines in demand in U.S. gasoline and diesel fuel demand in the United States, and an impressive rally in the dollar have generated profit-taking and reduced concerns over the sufficiency of supplies. There was almost a herd mentality that emerged last week that prices would proceed inexorably higher, and that is almost always a bad sign on Wall Street.

In my research note after the price record was set, I remarked that my inner contrarian was restless. The parabolic move higher in crude oil prices was punctuated by a revelation from the International Energy Agency that investments in future supplies was not keeping up with expected demand. The remarks were ill-timed and extremely premature, but the market surged on the suggestion.

Today, the market has ignored a substantial decline in U.S. crude oil inventories. Margin requirements are being raised once again by the New York Mercantile Exchange, and the ICE exchange has apparently agreed to U.S. government oversight of its crude oil futures trading.

This regulatory move comes on the heels of significant congressional action that seeks to re-regulate energy trading. The heat is clearly on, and this may be causing some investors to get out of the way of further onslaught.

While the landscape is littered with analysts who have tried to call a top in oil over the past several years, this time it may be for real. Consumers confounded the market with their resiliency at the pump, until now. The breaking point has been visited upon the consumer, and the reaction is real.

The market remains vulnerable to myriad supply disruption possibilities, but with the dollar rebound, a decent upward revision in U.S. GDP, and a seeming bottom in place for the equity markets, the attraction of the energy markets and commodities looks to have ebbed.

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U.S. Treasuries have fallen sharply of late, with yields across the yield curve moving to their highest level since last December. Yields on short maturities have moved up the most, reflecting increased expectations for a reversal in Fed policy, such that investors are now expecting the Fed to eventually raise interest rates rather than lower them. This is evident in federal funds and Eurodollar futures, which are priced for a single quarter-point rate hike occurring in the fourth quarter of this year, and for as many as two additional hikes in the first quarter of 2009. Much of the recent increase in Treasury yields reflects these sentiments, which are rooted in both the recent improvements in the credit environment and an intensification of worries about inflation.

Treasury yields have been climbing ever since bottoming for 2008 on Monday, March 17th, which of course was the first day of trading following the Bear Stearns rescue. The 10-year's yield has climbed 69 basis points since then to 4.0% from its low of 3.31%. The yield on 2-year notes has increased much more, by 126 basis points to 2.60%, which of course means that the yield curve has flattened since then. It has done so because the Federal Reserve is no longer seen as cutting interest rates and because the flight-to-safety trade has moved in reverse since March. The increase in yields on 5-year notes has been 114 basis points, a very sharp increase in relation to the 2-year given its flattening to 10s, reflecting the fact that 5s tend to shine on the way up and get hammered on the way down (many entities are not allowed to invest beyond 5 years, which makes the 5-year an obvious target to overweight and underweight depending upon the interest rate outlook).

A major factor pushing Treasury yields higher in recent weeks has been a flight to other segments of the fixed-income markets. In the corporate bond market, for example, the issuance of company bonds has increased dramatically, with issuance topping $30 billion per week since the Bear Stearns rescue, which is roughly $10 billion above normal. In two of the weeks since then, issuance topped $45 billion, making those weeks the two best ever in the corporate bond market. Even high-yield issuers have gotten into the act, selling more bonds in a single week than at any time since last November.

The impact and message from the increase in corporate bond issuance is multifold. For one, the increased issuance produces a crowding out effect, reducing the amount of dollars available for investing in Treasuries. Second, the fact that the new issuance went extremely well indicates that investors have become more willing to move out the risk spectrum. Third, the issuance will benefit the economy, improving the outlook and dampening the chances at further interest rate cuts.

The credit environment in general has improved substantially from its worst point, cutting the demand for Treasuries. The improved environment is apparent in the increase in bond issuance that I mentioned and in gauges such as swap rates, where the swap market has improved sharply from its third distinct episode of fear -- with August, November, and March representing the three major periods of heightened anxiety.

Important also has been the decline in 1-month LIBOR, which has fallen sharply ever since the Fed increased the size of its Term Auction Facility to $150 billion per month beginning in May from $100 billion in March and April, $60 billion in January and February, and $40 billion in December. Today, 1-month LIBOR is trading at 2.38%, down 12 basis points in two weeks time and 51 basis points in May alone. With the Fed's Term Auction Facility (TAF) priced at 2.10% in the latest week, there is room for additional, albeit smaller, declines (the Fed auctions loans to banks via its TAF).

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Healing in the credit markets has strongly influenced perceptions about the direction of monetary policy, but so has the recent acceleration in inflation and inflation expectations. Last week, for example, the market for inflation-protected securities was priced for the consumer price index to increase at a pace of 2.57%, the most since August 2006. The ever-increasing level of energy prices has obviously had significant influence on inflation views.

There is room for additional increases in yields in the weeks and months to come. The 2-year note provides good guidance about how far yields can go. Most times (these are not most times because the funds rate has been brought low), a yield spread to fed funds of 50 basis points signals 50/50 chance that the Fed's next move will be either a hike or a cut. At 75 basis points over funds, the market is priced for high odds that a hike will be delivered within a few months but not more than six months away. At 100 basis points over, a hike is seen as imminent. These rules change a bit when the funds rate is unusually low, as it is now, so the scale at which 2s, and hence the rest of the yield curve can trade higher in yield must be moved up a bit. In other words, 2s could move to 125-150 basis points over funds when a hike is imminent, meaning that neutrality on monetary policy is defined as 62.5 to 75 basis points over funds. Hence, if 2s move higher than these boundaries and the case for a hike is good, then the yield rise will be justified. If not, look for Treasury yields to steady in that zone.

More: Click for Latest Economic coverage ...

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Tony Crescenzi is the Chief Bond Market Strategist at Miller Tabak + Co., LLC where he advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. Crescenzi makes regular appearances on financial television stations such as CNBC, and is frequently quoted across the news media. He is also the co-author of the just-revised "The Money Market " and "The Strategic Bond Investor ."

It's far and away the most over-covered and under-predictive sign of economic trouble – the Consumer Confidence Index.

We’ve all seen the recent headlines “Worst Consumer Confidence level in five years”, “Lowest consumer sentiment since Katrina”, and today the mother of all consumer confidence confabs “Lowest Consumer Confidence in 16 years!”

Sounds pretty scary, that is until you actually look back at what happened respectively 3, 5, and 16 years ago to investors. Then you see that low Consumer Confidence seems to be more of a herald of booms than of busts. Sure Katrina coverage scared the living daylights out of the country, but after that passed, the Dow soared up to 14,000. Yes, surveyed consumers echoed the prevailing sentiment back to the pollsters, but, again, someone who bought stock at that bottom, nearly doubled their money over the ensuing 5 years.

Then there’s the Oct 1992 Consumer Confidence conundrum. Have any of the pundits who reported the '16-year-low’ story reminded you that the prior trough in sentiment preceded one of the greatest economic and investor booms in US History? (Sorry, Republican friends, there really was a Clinton Boom).

Why does the monthly Consumer Confidence Index mislead us so? Partly because we are stuck with some 19th century economic fallacies in our head, like consumers need to be constantly stimulated in order to keep the economy moving. George Bush tapped into this bit of economic phrenology when he urged post-9/11 citizens to go out and shop for their countries. Listen, every retail worrier, to what I’m saying: ALL THE MONEY GETS SPENT! If, saints forbid, someone actually saves a little rather than dropping it at the mall, it still gets spent, because savings are the source for capital. If I save a few bucks, it goes through our various capital aggregators (banks, mutual funds, ETFs, etc.) and into the hands of some business. So, although, I don’t purchase a new suit, someone purchased the computer on which they track the inventory for suits, etcetera, and on it goes. Someone who panics over consumer confidence is, unknowingly but implicitly, thinking that saving is a negative for the economy.

The other problem with the Consumer Confidence Index is that it doesn’t actually measure consumer’s confidence about consuming. This deserves fuller treatment in itself, but the questions asked by the Conference Board are really general economic conditions questions. Only one out of five topics focuses on the specific conditions of that household, and that one focuses on income, not spending. In other words, consumers are asked principally about "the economy" in general, the thing they know least about. And only asked a bit about their lives, the thing they know the most about.

I suspect that the consumers are recirculating gloomy headlines, feeding the general foreboding of the press back to the press, where it appears as yet more gloomy headlines in a kind of never ending economic Ouroboros (you know, the snake eating it’s own tail thing) of despair.

(Click here to see Jerry Bowyer's comments on Kudlow & Co. about national security in presidential politics).

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Jerry Bowyer is chief economist at Benchmark Financial Network and makes regular appearances on CNBC. He also writes extensively on finance and history for the National Review, The Pittsburgh Post Gazette, Crosswalk.com, and The New York Sun. He can be emailed at jerrybowyer@comcast.net .

Israel turned 60 this week. In human-years, that’s middle aged; in nation-years, that’s adolescence. The stories will be almost all about national security, and why shouldn’t they be? The state of Israel has been in mortal peril more than any state in memory. But what about Israel as a wealth creator, why ignore the money miracle?

Israel punches way above its weight class in initial public offerings, patents, and technology in general. It should – the nation is itself, after all, an IPO. In 1948, the country was an act of entrepreneurship – an idea, an implementation plan, setbacks and then success. In this way, it’s a lot like its closest ally, America: utopian vision, harsh reality, painful lessons, improved performance. Like America, it had its failed experiments with central planning and inflationist policies in the 70s. Like the US it lurched towards markets in the 80s, and again in the 90s. Like America, it has staked much of its future on commerce with other nations.

The Dow Jones Industrial Average has retained most of the nearly 1,300 points it gained after bottoming at 11,740 on March 10th, buoyed by a substantial improvement in credit markets in recent weeks, as well as with the notion that upcoming increases in consumer spending stemming from tax rebates will bolster the U.S. factory sector, the sector that dominates the economic calendar.

In this context it is notable that the most recent decline in equity prices, which shaved about 300 points off the Dow after it peaked on May 6th, was rooted in none of what has ailed equities prices since last summer, most notably the condition of the credit markets. This means that the sell-off was ordinary; a run-of-the-mill consolidation of recent gains worthy of dip buying, at least for now.

As for the improvements in credit markets I mentioned, a glaring one is bond issuance, which has been extraordinarily robust. In fact, in two of the past four weeks bond issuance ranked the highest ever. Even junk bond issuers are having an easier time these days, selling more bonds in the week ended May 9th than at any time since last November. Certainly, with facts like these, a stall in the equity rebound had very little if anything to do with the credit markets.

Also, picture this: an ISM index (the monthly factory index released by the Institute for Supply Management) that goes back above 50, the level that represents the dividing line between expansion and contraction in the factory sector. Picture the mood at 10 a.m. when the ISM is released on the first business day of the month in one of several months ahead. How will the ISM index get get back above 50? Well, one glance at the correlation between the year-over-year change in chain store sales (as measured by the International Council for Shopping Centers) and the ISM makes it obvious that if the tax rebates succeed as they are likely to in boosting chain store sales to a 3.5% gain or higher (3.5% is a normal level), the ISM will likely move higher.

Giving confidence to this idea is the lean level of business inventories, which will compel businesses to raise output if sales pick up.

This is the story as it stands today; conditions could change by the summer, but it seems likely that the current situation is likely until the end of June, probably into July when there will be a chance to reassess.

More: Click for Latest Economic coverage ...

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Tony Crescenzi is the Chief Bond Market Strategist at Miller Tabak + Co., LLC where he advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. Crescenzi makes regular appearances on financial television stations such as CNBC and Bloomberg, and is frequently quoted across the news media. He is also the co-author of the just-revised "The Money Market " and "The Strategic Bond Investor ."

One of the great things we have at CNBC is access to experts: Folks who know what they are talking about, right there, to comment on the business news goings-on. It's part of our credo: Fast, accurate news and what to do about it.

And let's face it: When it comes to advice, you want people who know what they are talking about. After all, charming and insightful as I and the other journalists around here are, it probably helps to hear what the folks who actually have skin in the game have to say.

We're ramping up that expert voice on the Web site in this ... our new guest blog. Here you will find comments from the experts you regularly ... and maybe even irregularly ... see on our air. What will they be commenting on? Short answer ... pretty much anything with a dollar sign. Or, if they were recently on air, they might take an opportunity to "expand" (now THAT could get dangerous). Heck, they might even pick a fight with one another (even more fun).

Whatever they do specifically, on the whole it should give readers more understanding about what is happening in the world of money and what the flash points are. We hope you like it.

-- Allen Wastler, Managing Editor, CNBC.com