The Economy Guy

 Stocks went sideways today.

Bonds fell in value (increased interest rate) because Paulson asked for the other $350B that Congress promised.  This means more money into the economy, and more inflation; ergo bad for bonds.

The Euro and Gold continued the trend started yesterday, and are giving up gains made for the last week.

Oil hit new lows, but gasoline gained one cent (suspicious).  Can you believe oil is down to $33/barrel??

In the news today…..

President Bush has agreed to give GM and Chrysler $17.4B in loans.  Here are some of the details:
• The President plans to kick this problem ahead to the next administration.  He doesn’t want the auto industries to go bankrupt under his watch, so he’s bailing them out.
• In exchange for this loan, the auto industries and unions must give concessions, and come up with a restructuring plan.  These are unspecified, and could be anything.  They will be judged by the next administration.
• If there is no restructuring by 3/31/09 (that’s after Obama becomes President), the auto companies must repay the loans to the government.  GIVE ME A BREAK!!!!!!!!  The auto companies will either have a plan or they’ll be bankrupt and unable to repay the loans.
• Let’s look at the morals of asking the unions to reduce their remuneration.  Why hasn’t the government insisted that CEO’s of companies that have already been bailed out been forced to take a cut in their remuneration???  This inconsistency show’s the hypocrisy of the current administration.  There is no difference in asking either group from reducing their remuneration, and a case to be made for both.

Treasury Secretary Paulson is now asking for the 2nd Tranche of the TARP – $700B Congressional bailout bill.  When the bill was first passed, only half of the money was given to Paulson.  It was only last week that Paulson said he didn’t need the 2nd half of the money.  Now he wants it.  It was absolutely predictable he would want it when he said he didn’t want it.  What a joke.  His reason today is that they auto bailout money has depleted the first $350B allocation.

The Standard & Poors Rating company has downgraded the big major banks in the US.  These are the clowns that didn’t see the required downgrade of Fannie, Freddie, etc. when they were going down.  I believe they are LATE in downgrading these major banks.
 

Here are Today’s numbers:
Dow Jones 30 Industrial – 8579 (down 26 points)
10 Year Treasury Bond – 2.13% (up 0.06%)
Euro – $1.3918
Gold – $837 (down $23)
Oil – $33.87 (down $2.35)
Gasoline – $0.97 (up $0.01)