The Economy Guy

Stocks took their lead from Microsoft’s failure to purchase Yahoo.  The market was down all day, and ended down 89 points.

Bonds did not change an iota.  They still think inflation is coming.

The Dollar weakened a little today, but we’ll really have to wait until later this week to see if the dollar is going up or down.

Gold put on a run today, but is still a good buy.

Oil hit a NEW HIGH today, and gasoline pushed up too.  Think about this fact.  Oil is what’s driving the US economy into the tank (together with the housing mess), but gasoline is much more visible to the average Joe.  It looks like this will get worse.  What does that spell for the economy?

In the news today….

The FED reported today that bank lending is getting tighter.  Amazing.  Where has the FED had its head.  Of course it’s tighter.  That was caused by the liquidity crisis to begin with, and is now the bank’s have woken up to the fact that RISK is real, and they can lose money with bad loans.  Maybe loans are just coming back to a “normal” way of doing business….  I suspect this is closer to the truth, but the news won’t report it that way.

Our next installment in food price inflation will come from hikes in chicken and pork prices.  Isn’t this fun?

Your Dinner Conversation…..

Something stinks in the numbers the US is using for payroll numbers.  First of all, the payroll numbers are “totally not consistent” with the GDP numbers.  Payroll numbers would have to be so much lower to provide a 0.6% GDP growth that someone is in fairy tale land.

Next, when you look at the details of the payroll numbers, here is what you see.  The total jobs created in April was 267,000 jobs.  I bet you didn’t hear that 45,000 of those jobs were in the construction industry!!!!!!!  Also, our financial institutions took on another 5,000 people (even when they are laying off?????).  The numbers are a real fairy tale.  Someone should make this into a movie.

The question for you tonight is “Can you trust the US economic numbers they are currently published?”  If yes, which ones?

Here are today’s numbers:
Dow Jones 30 Industrial – 12,970 (Down 89 points)
10 Year Treasury Bond – 3.85% (No Change)
Euro – 1.5498
Gold – $874 (Up $16)
Oil – $119.97 (Up $3.65) – NEW HIGH at $120.30 today.
Gasoline – $3.05 (Up $0.09) – gasoline is back.  Watch those prices run at the pump.