Budget Gaps
Mostly sideways action today. Stocks tried to rally, but IBM came in at the end of the day with poor earnings.
Gold is testing key support levels at $1180 and $1178. While they went to $1176 today, they bounced off those lows – successfully testing these points. Let’s hope for a big bounce, and the big banks don’t sell again as they have been recently.
In the news today……
Ireland creditworthiness – was downgraded one notch by Moody’s today. The credit rating companies are more on the ball now that they got caught with their hand in the cookie jar back in 2008. Greece, Spain, Portugal and now Ireland have been downgraded.
IMF and EU stop talks with Hungary – as the Hungarians are playing hard ball in the negotiations with the IMF for a bailout. The IMF is holding all the cards, so they just pulled out of the talks, and that froze the $25B that was already approved for Hungary to use – leaving them high and dry. Saner minds should prevail in the near term, but if they don’t this could be another run on the Euro and scare lots more people.
IMF wants more money – and they only want another $250B so they can bail out countries around the world with money. This is just as inflationary as the US printing money by the FED, or the Quantitative Easing performed by the Europeans. Also, the majority of IMF money comes from the US, so actually it is YOU bailing out the rest of the world, and you don’t have a say in it either. I bet you have never voted for anyone in the IMF – have you?
Lehman Bros – when it was about to fail, it was hiding its bad assets in off-balance sheet transactions – and the surprise was that the French Central Bank was helping Lehman Bros. No one knows why the Bank of France was acting that way – yet. Sounds screwy to me, but that just means I don’t understand who was making money on this deal.
States have Budget Shortfall – and it is about $196B in 2010 in total. What will they do about it? That’s a great question, but the answer will be painful – that I am sure of. Here is a chart of the states, and how they are doing.
Tonight’s Dinner Conversation…..
Marc Faber is a pretty good judge of our economy. He is predicting that the FED will be implementing a massive Quantitative Easing action this fall. I suggest you watch the video of him talking at:
Here are the last numbers for today:
Dow Jones 30 Industrial – 10,154 (up 56)
10 Year Treasury Bond – 2.96% (up 0.02%)
Euro – $1.2937
Gold – $1182 (down $6)
Oil – $76.43 (up $0.42)
Gasoline – $2.06 (up $0.01)
