The Economy Guy

Stocks jumped up again today by 115 points.  A nice jump.  While the economic news should cause the market to collapse, the pundits decided that because IBM was going to buy more of its own stock back, this was a good sign for everyone.

Bonds gained a little in contrast to the stock market.

The Euro hit a NEW HIGH today, and Oil hit a NEW HIGH today too.  These were predictable, and are signs of the poor US economy and poor US dollar.

In the news today….

What was all that bad news today???  Well, the value of houses are falling.  Not new news, I know.  However, here is the real statistics – keep your hat on.  The S&P House Price Index showed that houses in Miami fell 17.5% in the last 3 months, Las Vegas – 15.3%, and Phoenix – 15.3%.  Houses in Los Angeles, San Diego, San Francisco, Detroit and Washington DC fell over 10% each in the last 3 months.  For those of you that are analytic, just remember that houses can FALL IN PRICE over 5% in one month, and for multiple months at a time.

The PPI (producer price index) came out today showing a 1% jump in wholesale prices last month.  This was the biggest jump in 25 years.  THIS IS A SIGN OF STAGFLATION.  It could also be precursor of a much bigger future inflation.

Consumer confidence fell last month – not a big surprise either.  But, this is one more sign that we really are going into or already in a Recession.

Dinner Conversation for Tonight

The FDIC is hiring back 25 retireed veterans from their resolutions and receivership department.  These old codgers are from the late 1980’s timeframe when the housing market last collapsed.  The FDIC is getting prepared for bank bankruptcies.  The last time around in the 80’s, over 1000 banks collapsed.  Hold onto your seats, this could be a fun time.

Here are today’s Numbers:
Dow Jones 30 Industrial – 12,684 (Up 115 points)
10 Year Treasury Bond – 3.86% (Down 0.04%)
Euro – $1.4976 – a NEW HIGH
Gold – $949 (Up $8)
Oil – $100.88 (Up $1.65) - a NEW HIGH
Gasoline – $2.55 (Up $0.01)