The Economy Guy

The stock market ended down again today.  Nothing but worry moving the market.

Bonds on the other hand started with declining interest rates, and continued declining all day.  Bonds ended up at the same place at the end of the week where it started at the beginning.

Oil jumped $3.66/barrel on supply worries.  Problems in Nigeria has raised its ugly head again.  Just when you thought we might get a break on gasoline prices, oil prices jump – and with it gasoline.

Gold made a strong comeback this week, and ended at $922.

The Euro moved slightly higher.  Currency markets are looking forward to next week – as there is nothing else to look forward to.

In the news today…..

It was reported today that the global stock markets fell in January.  50 of the 52 stock markets followed fell.  The amount of value lost in all the stock markets was $5.2T.  Let me spell that out.  $5,200B.  Now that’s a lot of money.  All this money went to money heaven, and that’s a lot of illiquidity.  This sort of emphasizes what happens during a meltdown.  It’s the opposite of a bubble.  During a bubble, a lot of money drives all prices up, and everyone celebrates.  When money is pulled out of the system, all the prices go down, and everyone gets nervous.  Another way to look at this phenomenon is that inflation is the creation of money, and deflation is the destruction of money.  January saw the destruction of a lot of money.

Here are today’s Numbers:
Dow Jones 30 Industrial – 12,182 (Down 65 points)
10 Year Treasury Bond – 3.65% (Up 0.09%)
Euro – $1.4509
Gold – $922 (Up $12)
Oil – $91.77 (Up $3.66)
Gasoline – $2.36 (Up $0.09)