Red Flag
Stocks went sideways today as a Korean naval ship was sunk. Bonds recovered some of their recent losses as Friday close approaches.
The Dollar lost about 1.5 cents against the Euro as Europe solved Greece’s debt problem.
Gold gained, but oil/gasoline lost.
In the news today…..
Korean Ship Sunk – off island near N. Korea, but in South Korean waters. Early reports said the South Korean navy ship was struck by a torpedo. This is one of those blue birds that comes along. There will be repercussions if it is believed the N. Koreans did this to provoke the South. Gold spiked on the news.
Greek Aid Plan – agreed. The plan is to have 2/3 of the money come from the EU and 1/3 of the money come from the IMF. This should ease pressure on the Euro for now, but Portugal and/or Spain could come forth and put more pressure on the Euro in the future.
Major Investment Banks – are accused of rigging the MUNI bond market to pay municipalities less interest than they could get, and fill the coffers of the banks. When will these scumbags get their just due? Why do we bail them out? Why don’t we just start putting some of them in Jail? A little time in the showers would probably straighten them right up.
IRS Tax Records – are vulnerable to hostile attack according to the GAO. The IRS uses weak passwords, and a test of their system shows that taxpayer records can be compromised, destroyed, or stolen with ease.
RED FLAG – US Treasury Auction – results showed higher interest rates as investors (including foreign central banks) had less demand to buy these new Treasuries. The result – higher interest rates. The 10 Year Treasury Note is now close to 3.9%, and is a signal of higher interest rates to come. This is inevitable, and the FED is keeping the FED Funds rate at zero percent. So, the curve is steepening, and a steepening treasury curve is a sign of future inflation, and the bond vigilanties see it coming and are demanding more interest.
Tonight’s Dinner Conversation…..
The Census. You got the pre-notice. You got the Census form itself. You got the reminder to mail it back. That was 3 pieces of mail for each household in the US. Was it really necessary? I don’t know, but probably not if “profiling” could have been used on the household it was sent to. The government could have saved millions, but of course, it was politically correct to treat every household the same.
If you sent it back, it cost the US Government only the cost of a first class stamp to get the data. However, the government say it costs $56 for someone (on average) to come out to talk to you personally if you didn’t sent it back or didn’t fill it out correctly.
So, if you want to stimulate your local economy – don’t sent it back. The $56 will be spent in your community, and you control it. Fun isn’t it. Well, I am not actually advocating causing the Census workers to knock on your door, but I wanted to highlight how crazy all of this really is in our economy.
Here are the last numbers for today:
Dow Jones 30 Industrial – 10,850 (up 9)
10 Year Treasury Bond – 3.86% (down 0.04%)
Euro – $1.3417
Gold – $1104 (up $12)
Oil – $80.11 (down $0.42)
Gasoline – $2.21 (down $0.01)