Oil is a “bubble in the making”, but the crash is “not imminent”.

That’s what George Soros will say when he testifies at a hearing in front of U.S. Senators today at 10 AM regarding energy market manipulation.

Toll Brothers (TOL) lost more money in FQ2, as the housing market continued to tank. But there were two bright spots: First, excluding write-offs, the company appears to have done a bit better than expected. Second, CEO Bob Toll finally stopped blaming the media for the housing crunch.

Inflation plus recession equals stagflation, right? Wrong, Paul Krugman argued vociferously yesterday, there cannot be a wage-price sprial (and therefore stagflation) with out higher wages. Krugman is now joinged by Merrill economist David Rosenberg. Reuters:

“It is utter nonsense, in our view, to be talking incessantly about stagflation,” Merrill Lynch economist David Rosenberg wrote in a note to clients, pointing to strong productivity gains and flat wages.

Last week I warned about the white elephant of the financial markets, inflation. A few of you were kind enough to write in suggesting that I had screwed up my metaphor. After all, the most common phrase in the English language for an obvious, but ignored truth is “the elephant in the living room.”

In the Wall Street Journal article “One Bold Analyst’s Latest View: Worst Is Over for Economy, Stocks” Barton Biggs sounds much like Bob Brinker. He says many bears like George Soros think we’ve had a classic “bear market rally” but he believes the worst is over.

Bill Gross, the Chief Investment Officer over at PIMCO, was on CNBC late last week talking about inflation. I did not get a chance to listen to the segment until today but I am glad I did, as it was quite insightful. It should be clear from watching the video and from the constant chatter in the media that inflation will likely remain a significant overhang for the U.S. Economy in the coming year or so.

Some details of the back-and-forth between Microsoft (MSFT) and Yahoo (YHOO) have come to light as a result of the unsealing of documents in a shareholder lawsuit against the battered Internet giant, as Eric Savitz details at Tech Trader Daily. One of my favorite moments is where it emerges that Microsoft offered Yahoo a whopping $40 a share back in January of last year, but then CEO Terry Semel turned the deal down. Nice call, Terry — that’s right up there with taking a pass on buying Google in 2002. Of course, Terry still has most of his $71-million in options or whatever, so he’s probably doing OK. Other shareholders, not so much.