The Economy Guy » Dinner Conversation

Toxic Asset Plan Is Toxic

admin — Fri, 03 Apr 2009 21:48:57 +0000

Stocks moved sideways mostly today, but ended up just over 8000. This was in the face of a very bad unemployment report. Stocks are irrational, and this is proof. This has been the best stock rally since 1933. I might add that the Great Depression continued through 1939, so even if this is following the Great Depression, you can count on a lot of misery over the next few years.

Bonds got clobbered (interest rates way up) as the amount of bonds coming on the market next week spooked the traders.

The Dollar, oil and gasoline all went sideways.

Gold went down again today below $900/ounce. This might be another buy opportunity, but wait for the fallout next week.

In the news today…..

The Unemployment Rate jumped to 8.5% in March from 8.1% in Feb. During the month of March we lost 663,000 jobs. Also, given the current weekly unemployment claims being made in April, this trend of a massive unemployment gain is expected to continue.

Fannie and Freddie are going to give their employees $210M in bonuses this year. And, I might add, they are paying for it with your tax dollars. So, where is the outrage in DC this time? It doesn’t exist because everyone knew about it, as they did about AIG. What a bunch of scumbags.

10% of the population of the US are getting Food Stamps. That is 32.2 million people. The average payment in January was $113 to each person. A typical family of 4 will get an $80 boost to their Food Stamp money starting soon, and that added money is coming from the Stimulus Bill.

Food for Thought – Tonight’s Dinner Conversation…..

Remember Geithner’s plan to solve the “toxic asset” problem that our big banks have??? It’s called the Public-Private Investment Program, and also please remember that YOU will be paying big incentives to the “investors” who are putting in their own money!!!!!!!!

Well, here is the rub. The exact same banks who are holding those assets are putting together plans to purchase the other banks’ “toxic assets.”

Does this sound insane to you? Or, am I just smoking something?????

So, the TAXPAYER is giving money to those greedy, incompetent banks, and they are going to use that money to buy more toxic assets. Only this time, they will be on the receiving end of the “incentives” promised by Geithner and make a bundle of money out of the deal.

Are you hearing anything about this scam on the news yet??? I haven’t seen it yet, but this is so explosive that it must hit the news sometime. Enjoy the blast when it happens.

Here are the last numbers for today:
Dow Jones 30 Industrial – 8018 (up 40 points)
10 Year Treasury Bond – 2.91% (up 0.16%)
Euro – $1.3487
Gold – $897 (down $12)
Oil – $52.51 (up $0.13)
Gasoline – $1.49 (down $0.02)

Breaking The Gas Cartel

admin — Wed, 22 Oct 2008 21:30:16 +0000

Stocks were hammered today as the pundits stated that corporate earnings aren’t coming in as high as they should be, and the future looks glum. Bonds rallied, and are on a major move downward in interest rates. The bond move is good news for the economy, as it’s stating that the government intervention is working somewhat.

There was a major upturn in the Dollar against the Euro, and a major downturn in commodities, including gold, oil and gasoline. Hedge Funds are still unloading their leveraged inventory of stocks and commodities, and this has pushed all these in their directions today.

In the news today….

Earnings were down today across the board in the stock market. But, McDonald’s earnings were up – because of the success of their Dollar Menu. While I don’t usually comment on individual stocks, this is a great example of where people will be spending their money as we move into the recession, and people are scared about their financial future.

The FED was pretty sneaky today. It increased the interest it pays to commercial banks for excess reserves deposited in the Federal banks. They used to pay 0.75%, and will now be paying 1.15%. This move – to pay interest on reserves – was approved as part of the $700B bailout law. Just thought you should know where your tax dollars are going – as this is MORE money going directly to the banks – and that’s my definition of a bailout. Why are they doing this? To manipulate the short term bond market and money market – and get the credit moving through the economy again – and this is a noble goal. Just remember that it’s your money that’s accomplishing it.

So why is the FED doing so many different actions in the marketplace? In my opinion, they are throwing as much “stuff” against the wall as they can, and hoping some of it will stick. Some of it appears to be sticking now (reducing LIBOR for example.) Most of their moves have been unsuccessful in freeing up the credit markets. Time will tell.

Tonight’s Dinner Conversation….

Costco in Hawaii dropped their regular gasoline price to $2.89/gallon. The average price at all other stations is $3.79. How can Costco do that? Everyone gets their gas from the 2 refineries in Hawaii.

In addition, inflation is not going up right now as commodities (oil, gasoline, gold, food stuffs, energy,…) fall and stock prices fall. Why do stock prices falling have a negative effect on inflation expectations?

Hints for your Dinner Conversation….

Costco has broken the cartel of price fixing that oil companies have created over the years. I know those are inflammatory words, and I’m trying to get your riled up. However, gasoline ALWAYS have come down SLOWLY when they the futures price is declining, and go up FAST when the future price is increasing. Costco with its nationwide purchasing ability has end run this problem, and still is making a profit for itself. Why don’t all the other gasoline stations drop their price? That’s the real question for you to debate.

When stock prices fall, people just don’t feel as wealthy. It’s psychological. The practical side is that they can’t sell their portfolio for as much money, and they can’t borrow as much against their portfolio. Remember that a falling stock market is deflationary (taking money out of the money balloon). Lastly, remember that inflation/deflation is the CAUSE, and increasing/falling prices are the RESULT. (In other words, increasing prices if NOT the cause of inflation.)

Congratulations! You’re A Bank Owner!

admin — Tue, 14 Oct 2008 21:25:40 +0000

Stocks started up over 400 points this morning, but ended down 77 points. Most people expected another up day for stocks today.

Bond interest rates roared ahead today – with the 10 Year Treasury Bond ending over 4%. (I want to thank several readers for pointing out that the bond market was closed yesterday – as I missed that fact.) The US Treasury Bond curve is steeper now than for a very long time (the difference in interest rate between 2 year notes and 30 year bonds). This indicates that the bond market thinks inflation is coming, and is preparing in the only way it knows how – by increasing long term rates.

The Dollar fell today, and Gold went sideway – still representing a decent purchase price.

Oil and gasoline gyrated up, and then down today. This market is just so much fun to watch.

In the news today….

The news continues to be dominated by the government bailout of the financial sector. Paulson has stated he will be purchasing shares of banks – and started with the biggest banks (including two major banks that didn’t need his help – according to the experts) – who have agreed to selling shares (and options for future shares) to the US Treasury. Welcome to the world of shareholding – now the US Citizens are the proud owner of bank shares. The remainder of banks should be swarming into this problem very shortly – as the Treasury announced they are opening up this deal to lots of banks.

The bond market continues to expect the FED to cut the FED Funds Rate later this month. This surprises me because the rhetoric tends to say “everything is getting better – so let’s wait on any rate changes.” We’ll see. If rates are dropped again, that means the FED thinks we really DO have a big problem, and it is CONTINUING.

Tonight’s Dinner Conversation….

I want to emphasize (as I did yesterday) that Hank Paulson did NOT (and I mean NOT, NOT, NOT) want to purchase bank shares, but wanted to buy those “toxic securities” when he first brought his “bailout” plan to Congress and the President. Aren’t we supposed to have the best and brightest as the Presidential appointees – especially Secretary of the Treasury? Why would Paulson have been so adamant about buying “toxic securities?” Let me ask this question another way around – “Which of the two ways (buying bank stocks or buying toxic securities) is better for the financial community?” Or, conversely, “which of the two ways is better for the taxpayer?” Here’s a second question – “Which of the two ways solves the liquidity problem (the problem that banks don’t want to lend money)?”

I know I am asking you to think outside of the box regarding these questions, but it is a fun exercise for your cerebral cortex.

Here is an even more important question – “What problem (outside of the illiquidity problem) STILL exists, and is driving the US economy into the tank?” Okay, that’s an easy question – it’s the housing market – houses are still be foreclosed on, and prices are still falling. Here is the fun question to debate with your dinner companion on this topic – “What is the government (President, Treasury, FED, Congress) doing to solve the housing problem?” Idle chatter does not count. Only concrete plans that are, or will be implemented count.

And, if you want to get very political – “What are the two candidates proposing to do to solve the housing problem?” While I don’t want you to have an argument about this “political” question; I do want you to debate the pros and cons of each candidates proposals. Isn’t this how you can learn whether or not a candidate really knows what he’s talking about – or just blowing hot air???

Here are Today’s numbers:
Dow Jones 30 Industrial – 9311 (down 77 points)
10 Year Treasury Bond – 4.02% (up 0.16%)
Euro – $1.3637
Gold – $840 (down $3)
Oil – $78.63 (down $2.58)
Gasoline – $1.88 (down $0.03)

Let’s See What Tomorrow Brings

admin — Mon, 13 Oct 2008 22:28:13 +0000

Stocks jumped straight up today because all the fear left the market, and greed entered the door. The Dow ended up 936 points – a massive move upwards.

While other things had some big moves, I consider the rest of the market to be moving sideways.

In the news today….

While the G-8 and the G-20 met this weekend, nothing came out of their meeting to endear themselves to stock market investors. However, the EURO countries met on Sunday, and committed to “not allow any bank to fail.” They said they would use whatever means necessary to secure all people’s deposits.

Paulson wasted 2 weeks in not wanting to purchase bank stocks, but only toxic waste, and now has flip-flopped on this issue, and is steaming straight ahead to purchase shares. The Bank of England’s first action was to purchase British bank stocks – and made Paulson look like a sluggish player at this game.

Tonight’s Dinner Conversation….

What is the stock market going to do tomorrow? The is a great debate going on among stock market players – Did we see the bottom, or is this UP just a sucker punch and the market will be going lower?

That is for you to discuss tonight.

Some key inputs to that discussion should include whether of not banks have started lending money. The bond market didn’t move at all today – what does that mean? The Bond Market is a much more sober market than the emotional stock market – and if Bonds don’t move, does that mean nothing has been fixed?

Gasoline Prices….

My son would be pleased to point out that gasoline prices are coming down just before the election – as he predicted about a year ago. If you believe this is not a coincidence, then you believe in a conspiracy theory. Don’t rule anything out of your thinking to explain the unexplainable.

Here are Today’s numbers:
Dow Jones 30 Industrial – 9388 (up 936 points)
10 Year Treasury Bond – 3.86% (no change)
Euro – $1.3568
Gold – $843 (down $17)
Oil – $81.19 (up $3.49)
Gasoline – $1.92 (up $0.11)

Who Started This Mess?

admin — Wed, 17 Sep 2008 01:04:15 +0000

Stocks bounced up 142 points today after yesterday’s mauling. There is always hope in the market – hope that AIG will get bailed out, hope that WaMu isn’t that bad off, hope the FED doesn’t cut rates…

Bonds lost very little (only 0.01%) as the FED decided to NOT cut the Fed Funds Rate. Bond traders were betting on a 25 basis point drop, and some were betting on a 50 basis point drop. They can get it wrong too.

Oil and gasoline fell dramatically again – almost all the way to $90.

Gold fell $6 and is still a terrific buy.

In the news today….

I’m tired of reporting news, so I think I’ll just spout my ideas of what’s going on, who started this mess, and who’s next to fall?

First the easy one – who’s next to fall.
AIG – is my number one pick.
WAMU – they are hurting big time.
Citibank – has always been on my list – I think they’re hiding right now.
Morgan Stanley – this is on my watch list – I intend to talk to one of their senior VP’s in two weeks and get some straight talk.

What’s going on??
There is a credit crunch. All that fiat money that is floating around the US caused some big bubbles, and all bubbles burst. The housing bubble is just the latest. But right on top of it is the individual credit bubble – you remember – all those credit card applications you get in the mail each week. They’re throwing money away – and this bubble will burst too – and it’s a very big bubble too. You see – when bubbles burst – all that money goes to “money heaven” – bless it. There is less money around – and this is called a deflation – and it leads directly to a recession, then depression, then financial chaos with lots of bank failures – and we haven’t begun to see those bank failures yet. The deflation scared the heck out of the FED, and that’s why they are pumping money into the system as fast as they can print it – remember just $70B given out yesterday – the largest amount since 9/11!!!!!!!! That should be food for thought for all the cerebral readers. The FED saw that banks weren’t lending to each other – that’s the overnight interest rate – because banks were afraid they would lose their loan – so the FED injected $70B into the overnight lending facility to encourage banks to lend, and to keep their lending rate at a reasonable level.

Who caused this mess???
You’ll probably read, or will hear that Alan Greenspan is the culprit. Au contraire, mon ami. He just inherited this mess, and did the best he could with it. Did he cause the dot.com bubble? Nope. He lowered interest rates, but lowering rates by itself does not increase the amount of money in circulation. It takes hard cash deposited in banks to increase the amount of money in circulation. He did not print all that money – it came from somewhere else. I think the culprits go back to 1943. Can you believe that? Can anyone tell me what happened in 1943 that has economic significance? More importantly, what’s going on today that was caused by that lousy decision in 1943? Hint: President Nixon later played a key role in this story too.

I intend to go to the heart of this mess we’re in. I want ever reader to understand the cause of the fiat money that has caused ALL those bubbles over the past 60 years. Do you remember South America’s bubble – Argentina, etc.? Some of you weren’t born then. Do you remember the “Tiger” nations in SouthEast Asia? Do you remember Japan’s bubble and bust?
These bubbles were no different than today’s bubbles – they just played out a little differently?

Any of you that know what I’m talking about (1943 for example) or where the money came from? Write and tell me. If I hear interest – I’ll continue to talk about how we can turn this catastrophe into profits for our pockets.

Oh, did you see that the Russian stock market fell 20% today, and was shut down, ending down – only 17%. That may seem like a big number to you, but do you think it could happen in the US? The US Stock Market is a bubble too – and as it bursts – it will decline in value.

How safe in your money in the bank?? Don’t care because you have FDIC insurance? Think again. What happens when (not if) the FDIC runs out of money? One of two things could happen – option 1 – the government steps in and gives the FDIC more money (probable), or option 2 – they stop insuring your account? What’s your congressperson doing about this – probably nothing – probably doesn’t even know it’s going on – but it’s Congress who mandate the money for the FDIC – so they should be engaged.

Here are Today’s numbers:
Dow Jones 30 Industrial – 11,059 (up 142 points) – I call this a dead cat bounce.
10 Year Treasury Bond – 3.49% (up 0.01%)
Euro – $1.41.57
Gold – $781 (down $7)
Oil – $91.15 (down $4.56) – this is the market that caused the Russian stock market to crash.
Gasoline – $2.40 (down $0.16)- how low can it go without you seeing something at the pump?

Morgan Stanley Treasury

admin — Wed, 06 Aug 2008 00:12:27 +0000

I am going to try an experiment – trying to write the economyguy while traveling throughout the world. That means the timing of the articles might be affected, or I might miss an article if I get into a “computer unfriendly” area. But, assuming I can connect to the internet, all should be okay. I’m excited because it is a real test of whether of not someone can travel extensively in the world, and accomplish “staying in touch” at the same time.

Stocks exploded after the FED announcement that there will be NO CHANGE in the Fed Funds Rate – all this movement for no change??? Well, it was the rhetoric that moved the market – you see, the FED said that inflation was getting bad, and they have to fight it. So, if this is true, why didn’t they raise interest rates?? They couldn’t.

Bonds were not as spooked by the FED news, and rose just slightly.

The Dollar took off on the news – and that is because currencies assume that inflation scare tactics will translate into higher interest rates, and a more attractive currency.

Oil and gasoline continued their fall, helping calm the commodities market – and perversely calming inflation fears too.

Gold fell under $900 – so gold is an official “buy” right now, but buy cautiously as the metal could fall in value further. When it falls far enough, I’ll announce a “Buy with both hands” signal.

In the news today…..

The FED held the Fed Funds Rate steady at 2%. No big news to economyguy readers because you knew that major money in the bond market were betting on exactly that outcome – and those folks are connected enough to know.

The Service Sector index came in at 49.5 in July. Anything under 50 is a contraction in this economic area. Just another small sign of our recessionary condition.

Dinner Conversation Tonight….

The US Treasury just signed a contract with Morgan Stanley to “consult” with them on possible actions they could take with Fannie Mae and Freddie Mac. The contract value was $95,000.00.

Morgan Stanley can’t sneeze without spending that amount of money. So, why would they sign a contract with such a lousy amount of money???

Well, the other conditions of the contract weren’t revealed – were they?? So, let’s speculate on what they might be, and then we’ll see if that comes true. The Treasury has the authority to lend money to Fannie/Freddie and to purchase the share of Fannie/Freddie. How does Morgan Stanley make money?? Not if the Treasury loans money. BUT, if they purchase shares of Fannie/Freddie, Morgan Stanley can play the brokerage house role. That is just too obvious.

What else could Morgan Stanley be doing to make money out of this deal? And think BIG MONEY?? That’s you home work for tonight. Has Morgan Stanley bought a sweet spot with Fannie and Freddie? Could they become the intermediary for future sales of Fannie/Freddie paper?

Here are today’s numbers:
Dow Jones 30 Industrial – 11,616 (up 332 points)
10 Year Treasury Bond – 4.01% (up $0.04)
Euro – $1.5454
Gold – $886 (down $22)
Oil – $119.17 (down $2.24)
Gasoline – $2.96 (down $0.04)

Dinner Conversation

admin — Tue, 29 Jan 2008 23:00:46 +0000

Stocks moved up again with expectant anticipation of a 0.50% cut in interest rates tomorrow from the Fed. However, the bond market interest rate went up today, and lost of its bias that the Fed would be cutting the full 0.50%. If the Fed cuts anything less than 0.50%, then watch out as stocks get hit hard – and decline all day.

All other markets marched sideways – awaiting the big news tomorrow.

In the news today….

Countrywide reported a $422M loss for their 4th Quarter. Countrywide share prices have continued to decline since the announcement of the Bank of America purchase of Countrywide. What will Bank of America do? Will they adjust their offer? I would bet they do.

Durable Goods orders for December increased 51.2%. The increase was probably from international orders of US goods. It is speculated that Durable Goods orders within the US was flat.

Consumer Confidence was 87.9 in January compared to 90.6 in December. Anything less than 100 is a bad sign for the economy.

Home Foreclosures was 79% higher in 2007 than 2006. There were 1.3M foreclosure warnings sent out in 2007.

Dinner Conversations

The French rogue trader who lost $7.2B for the French bank, Societe Generale, has come out and stated that his bosses knew what he was doing. Naturally, the bank denies that anyone else knew what he was doing. He stated he started trading for the bank in 2005, and made a large profit for the bank when a terrorist attack occurred in London. He stated that he only wanted to make money for the bank, and didn’t want or get anything for himself.

Those are the facts. What do you think? Did he act alone? Did the bank collude with his actions – even using a wink and a nod? Who’s liable in either case? I bet you can have a great conversation around this case. Does the fact that this happened in France skew your attitude?

Here are today’s Numbers:
Dow Jones 30 Industrial – 12,480 (Up 96 points)
10 Year Treasury Bond – 3.66% (up $.07)
Euro – $1.4773
Gold – $931 (down $2) – and hit $933 during the day.
Oil – $91.64 (up $0.65)
Gasoline – $2.33 (no change)

More New Highs

admin — Thu, 03 Jan 2008 23:00:23 +0000

Today was a sideways day in all markets. In addition Gold ended at a NEW HIGH, and Oil had an inter-day NEW HIGH. You might get tired of me saying NEW HIGH in the days to come. As far as the “sideways” comment is concerned, the numbers speak for themselves at the bottom of this report.

Today’s News.

Manufactured goods went up 1.5% in November. BUT, it was driven by Oil going up. Durable Goods went down 0.1% in November following October’s huge fall of 3%. New people filing for unemployment benefits went down last week, BUT it was probably the Christmas effect of temporary workers needed for all those sales. The number of people filing for unemployment was 336,000, and this is a VERY BIG number in the statistical history of things.

What does all this mean?? It means that businesses are being very cautious in their expansion plans. They are postponing some big expenditures, probably waiting to see what the economy is going to do. (Wouldn’t you??) My advice is to ignore the numbers just quoted as they don’t mean that much anyway.

Consumer loan late payments are going up, but credit card delinquencies went down slightly. This is a “lagging” report, so doesn’t say what’s happening today, or in the future. But, it is one spot to watch in the future.

Dinner Conversations

Citibank has limited the amount you can withdraw from one of their ATMs in New York City. Their explanation is that there is too much fraud, so they are limiting the amount that someone can steal. A conspiracy theorist would put forward the possibility that Citibank is running out of money, and is putting in place the means to control a run on the bank.

The average cost of a condo in New York City is $1.43M. This is somewhere between 18% and 34% increase in value over the past quarter. New York City is RED HOT. Guess that makes you wonder where all those houses are that are losing so much money across the USA.

Here are today’s closing numbers.
Dow Jones 30 Industrials – 13,057 (Up 13 points)
10 Year Treasury Bond – 3.90% (same)
Euro – $1.4748
Gold $869 (Up $9) – A NEW HIGH
Oil $99.18 (Down $0.44) – It hit $100.05 during the day, A NEW HIGH
Gasoline $2.54 (Down $0.03)

Dinner Conversation

admin — Wed, 19 Dec 2007 21:00:05 +0000

Issue: 12/19/07 Wednesday

The market was up and down and up and down today. I’m feeling seasick. We are definitely in the light volume season of trading from today all the way to the end of the year. Moves can and will be exaggerated. Bonds increased in value slightly as bond players are still trying to figure out what’s really going on with all the money flashing around the world. The dollar is meeting resistance in its attempt to climb against the Euro. If the Euro turns around, it is ready to continue its march in strength. If the dollar finds more strength, it has a couple of cents left in its climb.

Here are details of how the Fed will protect homebuyers.

Key provisions of a Federal Reserve plan to protect home buyers from shady lending practices:

Restrictions on penalties for paying off a mortgage early.
Requirements to set aside money to pay for property taxes and homeowners’ insurance.
Showing proof of income when seeking a home loan.

For both risky and not-so-risky borrowers, the Fed proposed:
- Prohibiting certain types of misleading or deceptive advertising for home mortgages. For instance, it would bar using the term “fixed” to describe a rate that is not truly fixed over the life of the entire loan. It also would require that all applicable rates or payments be disclosed in ads with equal prominence as advertised introductory “teaser” rates.
- Requiring lenders to provide financial disclosures to borrowers early enough for them to use while shopping for a mortgage.

The “protection” for buyers include restrictions on who can qualify for a loan. Sounds like a little double-talk. In reality, these restrictions aren’t a big change in lending practices, and don’t really stop those poor loans from being made in the future. A great example of your government in action. Unfortunately, it’s the Fed this time.

Here are the results of the first Fed $20B auction.

The Fed announced that the interest rate on the short-term loans will be 4.65 percent, which is slightly less than the 4.75 percent the Fed charges banks on emergency loans through its “discount” window. Banks have been reluctant to use the Fed’s discount window because of the fear that investors will believe they are having trouble getting funds in a normal manner. The Fed received bids from banks for $61.6 billion worth of loans, an indication the Fed had been successful in achieving its goal of encouraging banks to use the new auction facility. In its announcement of the auction results, there were 93 bids for the emergency loans. Each bank could submit up to two bids.

The good news is that the auction was oversubscribed by 3 to 1. The bad news was that somewhere between 47 and 93 banks bid. This is a small number consider the 1000’s of banks in the country. The Fed isn’t going to publish which banks got how much money – a sign a fear to be transparent.

Dinner Time Conversation Teasers (some of you told me you like having this type of diversion)

U.S. military commanders in Iraq didn’t know Turkey was sending warplanes to bomb in northern Iraq until the planes had already crossed the border, said defense and diplomatic officials, who were angered about being left in the dark. Americans have been providing Turkey with intelligence to go after Kurdish rebels in northern Iraq. And a “coordination center” has been set up in Ankara so Turks, Iraqis and Americans can share information, two officials said Tuesday. But defense and diplomatic officials in Washington and Baghdad told The Associated Press that U.S. commanders in Iraq knew nothing about Sunday’s attack until it was already under way.

Do you remember that crazy Armenian Resolution that Congress tried to pass, but failed?? Well, here is a follow-on story on how the US military works with its allies. Here is what you can read into this story – the Turks don’t trust the Iraqi Central Government, so they didn’t give any advance notice of the air raid; the US has set up an intelligence center in Turkey to share knowledge about the PKK (Kurdish rebels) whereabouts and movements; the US still has excellent military relations with the Turks.

Here’s another dinner time story.

Credit rating agency Standard & Poor’s slashed its credit rating for bond insurer ACA Financial Guaranty Corp. to a non-investment grade “CCC” from investment grade “A.” The downgrade of ACA led S&P to cut ratings on nearly 3,000 municipal bonds, which could may spark a municipal borrowing crisis, according to Peter Schiff, chief executive of Euro Pacific Capital. ”Many municipalities get high credit ratings because their bonds are insured,” said Schiff. “Higher borrowing costs for cities will force them charge higher property taxes, which will increase the strain on consumers. And some cities may be shut out of the credit markets.”

So you thought there weren’t going to be knock-on effects of the sub-prime meltdown??? Here is one that could catch you in the pocket book – a gift from your county property taxing authority. Cities and counties are run by small time politicians who usually aren’t much different in their inability to get anything done – just like Congress. Cities and counties were hoping home prices would just keep going up, so they could spend all that extra cash and NOT have to increase your “tax rate.” Your taxes would go up, but your tax rate wouldn’t – a bittersweet reality for homeowners. Now cities and counties are going to have to make some hard choices. I encourage you to hold their feet to the fire, and not allow them to even think about deficit spending.

Here are Wednesday’s closing details:
DJ30 – 13,207 (Down 26 points)
10 year US Treasury Bond – 4.07% (Down 0.05%)
Euro $1.4376
Gold closed at $805 per ounce. (Down $2)
Oil Closed at $91.24 (Up $1.16)
Gasoline is $2.33 (Up $.03)