The Economy Guy

Stocks continued their bullish trend forward.  When will this stop?  I am watching and watiing, and I am of the belief that this bull market phase has gone too far too fast.  The sign for a pullback will come sometime in the future, and I’ll report it.

The Dollar was decimated again today.  Gold plowed forward, holding the $1000 level and gaining on it.  It looks like the $1000 level has turned from a barrier to a support level.

Oil and gasoline starting coming back up, as the Dollar plummets, and you can count on higher energy prices.

In the news today…..

Double Dip Recession – that is what is predicted by a noted professor today, as he points out that banks are reducing their lending by over 1% per month, and the M3 (monetary aggregate) has been falling at rates only seen during the Great Depression.  If this keeps going, there will be another recession starting in 2010.  Banks are reducing their lending because they are under pressure to bolster their capital, and rid themselves of toxic assets.  While this is good to do, it also means they will lend less, and push the economy into recession.  Not a pretty picture is it?

Wholesale Prices – rose 1.7% in August.  This is a large increase, and starts to show the price increases that will continue if energy starts to rise again.

Retail Sales – jumped a large amount in August.  This is caused by auto sales, energy price increases, and possibly increased consumer spending.  My recommendation is to wait until next month’s results to get a clearer picture.

Here are the last numbers for today (about 40 min before closing):
Dow Jones 30 Industrial – 9683 (up 56 points)
10 Year Treasury Bond – 3.45% (up 0.04%)
Euro – $1.4685
Gold – $1007 (up $7)
Oil – $70.93 (up $2.07)
Gasoline – $1.79 (up $0.05)