Housing Starts Increase
Stocks resumed their upward trend to make you think the bottom has been hit, and the worst if over, and you will make money in the stock market for the rest of your life. Good luck.
Bonds also increased in interest rates, and as the 10 Year Treasury exceeds 3%, the influence on other interest rates starts to bear down, and cause bad things to happen to the economy. Remember high interest rates = slower economy.
The Dollar went sideways again.
Oil and gasoline are very sneaky right now. As everything thinks we have hit the bottom of the stock drop, and the economy will recover in 2009, the oil bulls are thinking its time to ratchet up the price of oil, and cash in on the spoils. Gasoline is now at the level that your pump prices will definitely start going up again.
Gold fell a little today as gold is not longer a “safety” play for people scared by the stock market. As the fear of losing your life savings vanishes (at least in the popular press), people (sheep?) drop their wealth hedge of gold, and jump back into stocks with the sharks. I wish them luck. Gold isn’t going anywhere, but up over the medium and long term.
In the news today…..
AIG Bonuses – I said my peace yesterday, but I must add that the current Treasury Secretary (Geithner) was sitting at the table with Paulson when the original TARP Bill was passed and AIG was given its first drink of money. Also, 2 weeks ago, Geithner gave AIG $30B more money, and didn’t even speak a peep about “bonuses” at that time. He didn’t know????? Of course he knew. What he didn’t know was how to get out of the way of that bonus train about to run him down. The calls for Geithner’s resignation are valid, but he won’t leave as he has the “confidence” of the President.
Remember that Geithner came from the New York FED bank, and he is a banker at heart, and believes that BIG BONUSES are a right printed in the Constitution. Oh, BTW, he never read the Constitution either.
Housing Starts – rose 22.2% in February over January. The statistic doesn’t mean much, and more manufacturing only makes our housing price problem WORSE. So, don’t get excited over this news. It’s just an aberration, and will go away.
Wholesale Prices – rose 0.1% in February, driven by energy (gasoline, heating oil, etc.) and food. This is another sign of that evil invader of your savings – inflation. You are just seeing the tiniest hairs on the head of inflation right now – nothing to worry about yet. I’ll keep you informed when it will be time to buy everything in sight.
Here are the last numbers for today:
Dow Jones 30 Industrial – 7396 (up 179 points)
10 Year Treasury Bond – 3.00% (up 0.05%)
Euro – $1.3014
Gold – $917 (down $5)
Oil – $49.16 (up $1.81)
Gasoline – $1.42 (up $0.06)