The Economy Guy

The stock market was driven down by a stronger Dollar – can you believe it?  Oh well, that’s what the folks on Wall St think.

Bonds moved sideways with a downward bias (increasing interest rates).

The Dollar gained over one cent against the Euro, and this was the hit on the market.

Gold and Oil both plunged as the Dollar strengthened.  This makes sense as the sentiment previously was for stronger gold and oil on the back of a falling Dollar.

In the news today…..

Bank of America – wants to pay back its $45B TARP loan to the government – probably because it doesn’t want to fall under the Pay Czar’s rules.  However, they have raised only $40B in new capital, and feels that’s enough.  Some FED folks don’t agree, and think that the bank should raise a lot more money in case of any problems down the road.  Maybe if Bank of America got on board with the President’s mortgage program, they could then get better treatment by the government.

Caterpillar – is hiring back some of the workers that it let go previously.  This is great news, but is driven by the export market and by the weak Dollar.

Tonight’s Dinner Conversation…..

Is the stock market cracking?  It was down big two days in a row now.  Will it dive back to the lows it plumbed in March?

Any opinion is a good opinion on this subject, so have fun discussing this one over the table.

Here are the last numbers for today:
Dow Jones 30 Industrial – 9868 (down 104 points)
10 Year Treasury Bond – 3.55% (up 0.08%)
Euro – $1.4866
Gold – $1040 (down $16)
Oil – $78.61 (down $1.78)
Gasoline – $2.03  (down $0.01)