Near The Bottom?
All the markets moved sideways today, except OIL which hit a new high over $117/barrel.
Stocks didn’t react to the news that Bank of America had a declining profit margin. Remember that this type of news kept stocks roaring up last week, but not this week. Markets are truly irrational.
In the news today….
The Bank of England is going to do the same thing that the FED is doing. They are going to lend money to English Banks and take some very poor quality paper in collatoral. Why are they doing this?? My guess is that they are just trying to look like they are doing something. English Banks could have access to European Central Bank loans and FED loans long before this British announcement.
Dinner Conversation…..
Take a look at the following chart that shows the history of existing home sales over the past few years.
You can see that the drop off from the highs in 2005 has come down BELOW the steady state level of about 5,150,000 existing home sales from 1999 to 2001.
Does this mean we have hit the bottom???
I don’t think so. We have so much EXCESS in our system that must be flushed out. This chart might be very useful in the future to give all of us a pointer at the REAL BOTTOM. When the number of existing home sales does really bottom, and start to come up, it will be a clear sign of the end of our housing problem, and should also signal stabilizing home prices in those areas of the country where the rout is on.
The question for you tonight is “How much lower can it go?”
Here are Friday’s numbers:
Dow Jones 30 Industrial – 12,825 (Down 24 points)
10 Year Treasury Bond – 3.71% (Down 0.03%)
Euro – $1.5890
Gold – $918 (Up $2)
Oil – $117.48 (Up $0.79) – an ALL TIME HIGH
Gasoline – $2.98 (Up $0.01)