March Madness
Stocks fell a little today, but ominously bond interest rates rose. More ominously, the Dollar fell and oil/gasoline rose on the inflation fears of the FED action of yesterday. The energy price rise was an unintended consequence of yesterday’s actions.
Gold rose $70 today, a big blast. This was also a unintended consequence, but a good one for those holding gold.
In the news today…..
Our new Attorney General is considering releasing some of the Guantanamo detainees (I’d call them terrorists) in the US. How would you like to have one of them as your neighbor? They would probably go straight onto welfare too. There are some folks from a region of China being held there, and we don’t want to send them back to China because the (bad) Chinese think they are from a separatist group – so they want to get their hands on them, and kill them (with only one bullet of course). I just don’t understand that kind of thinking. It is wonderful to be humanitarian, but????? These guys were trying to kill Americans, so this is what happens in war. Okay, I know this isn’t a real economics story, but it is interesting, and you might not see it on the news.
President Obama has made his pick for the NCAA Basketball Tournament – March Madness. The nickname of March Madness is highly appropriate to describe our President wasting his time on such a mundane thing – and not spending his time solving our economic problems. Bad choice Mr. President. You may think this is my opinion (which it is), but it also the opinion of a lot of prominent basketball personalities.
Unemployment Benefits – are at a RECORD level this month – no surprise there. Should we be really excited about that? Well, the trend is more important than the number or being a record. The trend is going up – and that’s bad. Any month’s record is just a backward looking statistic, and is therefore not a great predictor of the future – only a a story from the past.
New Unemployment Claims – this week were 646,000 – and this continues to be bad news, and portends a rise in the unemployment rate in the future.
Mortgage Rates – The 30 Year Fixed Rate Mortgage rate is 4.95%. This is a direct reaction to yesterday’s FED announcement that it will be buying Treasury bonds. Past history of the relationship of the 10 Year Treasury and the 30 Year Fixed Mortgage rate would indicate that mortgage rates could come down a small amount more. LIBOR is also falling dramatically in response to the announcement. This is all good news for the economy.
Here are the last numbers for today:
Dow Jones 30 Industrial – 7401 (down 86 points)
10 Year Treasury Bond – 2.60% (up 0.05%)
Euro – $1.3660
Gold – $959 (up $70)
Oil – $51.61 (up $3.47)
Gasoline – $1.44 (up $0.07)
