The Economy Guy

A very boring day in the market unless you were a trader.  The market was negative almost the entire day, and in the last few minutes, it climbed to a positive 91 points.  Another sideways week in stocks.

Everything else moved sideways too, as this was a breather day for trading across the board.

In the news today…..

So why did the market jump in the last few minutes?  One of those bond insurers, AMBAC, it was rumored, was having successful talks with the SEC on getting a much needed $3.5M from a group of big banks.   The reason?  To get its AAA credit rating back, and not only save its own credit rating, but to save the credit rating of all the issuers of bonds it services – and there by save the municipal bond market.  THIS IS A BIG DEAL.  It doesn’t appear to be a big deal – getting $3.5B is a lot of money, but chump change compared to a meltdown in the municipal bond market.

Gasoline is hitting new highs this week.  Why??  Because oil went above the $100/barrel price.  However, the supply (tanks of reserve gasoline) is at a 14 year HIGH.  This should mean that in a supply/demand equation, the price should come down.  So what’s happening?  Well, those speculators think they can make a lot of money at your expense.  I hope they lose their shirt, and prices come down.

Great Dinner Conversation

Washington Mutual has given up on trying to foreclose on a mortgage in Florida.  Interesting – and here are the facts.  The home owner hasn’t paid his mortgage since 2002.  His mortgage is $1.5M.  WAMU lost the court case because they couldn’t produce the paperwork that “proved” they had the right to foreclose.  (How do I find out if Countrywide lost my mortgage paperwork?)

Why is this important to all of us?  Certainly not because you may be able to get away with this!!!!  However, this could be the “Tip of an Iceberg.”  Other court cases have been lost before this one for the same reason.  As so many homes get foreclosed, if this problem is widespread, the “losses” by the investors in these mortgage will INCREASE.  You think the losses are big now?  Well, maybe just wait.  On the pro side, this could be a very interesting solution to the foreclosure wave sweeping over America.

Here are today’s Numbers:
Dow Jones 30 Industrial - 12,381 (Up 91 points)
10 Year Treasury Bond - 3.79% (Up 0.01%)
Euro - $1.4825
Gold - $948 (Down $1)
Oil - $98.81 (Up $0.58)
Gasoline - $2.53 (Down $0.01)