The Economy Guy

Okay, so I said the DOW was going to go up and test the 13,000 level today, but I was wrong. It decided to go down 340 points, and then come right back to where it started, closing down 15 points. The momentum is upward, so I am guessing tomorrow is the day it tests 13,000.

First Magnus Financial has STOPPED making mortgage loans. Most people have heard this name. It’s getting ugly.

Countrywide, the largest lender in the US, has BORROWED $11.5B from 40 banks. Countrywide is said to have a great stable portfolio of paying mortgages, so shouldn’t be having this type of liquidity problem. What is happening in the market is spilling over, and getting in the way of real business right now.

Here are Thursday’s closing details:

DJ30 – 12,845 (down 15 pts).

10 year US Treasury Bond – 4.60% (down 0.11%) The 10 year continues to drop in interest rate. This is a BIG drop, and signals the market’s strong request for a Fed Funds rate decrease.

US Dollar – $1.3426/Euro. (up 0.0025) Another smaller improvement by the dollar. Don’t get too excited (again). The Yen continues to climb against the dollar, and had a huge jump in value today.

Gold closed at $658 per ounce. (down $22.) This big drop shows that people are backing off the risk arena.

Oil Closed at $71.00 (down 2.33) This large drop in oil is caused by the risk of the hurricane being ignored. Markets put risk in quickly, and can take it out quickly too.

Gasoline is $1.98, .03 lower, taking the storm premium back out of the gasoline price.