Someone Is Making Millions
The stock market went up today based on reassuring words from Ben Bernanke and rumors that Bank of America is courting Countrywide. But, that’s not the whole story. Gold hit another all time high of $894 (just shy of $900), and bond interest rates soared too.
Why bonds? Well, they naturally go in the opposite direction from stocks (using valuation as the measure). But, Bernanke’s statement was accepted with some skepticism. Why did he release the written version way ahead of his speech today? Why did he emphasize he would reduce interest rates as much as needed by the markets?
Did you blink? Remember when I told you how to get rich betting on an increase in the “steepness” of the bond yield curve? Well, it was a perfect storm today in the news, and somebody made millions today. We had a dramatic steepening of the yield curve.
Oil is really screwy right now. The price keeps going down, but the
Last, but not least, the dollar is getting battered again. The Euro broke out of its trading range, and is now set to test it’s all time high in the near future.
In the News..
Bank of America wants to establish itself as a powerhouse in the housing mortgage business, and eyes the troubles at Countrywide as just the opportunity it needs to accomplish this goal. Apparently, there have been some in depth discussions going on for some time. I can’t wait to see how this works out. I wonder if B of A let out that rumor a couple of days ago about Countrywide considering bankruptcy???
Have you been following unemployment? Well look at the following graph, and see if you can see a trend. I certainly can. If you look at the last 3 months, the curve is going UP. This is another sign of that Recession coming down the tracks.
Today’s Closing Numbers…
Dow Jones 30 Industrial - 12,853 (up 118 points)
10 Year Treasury Bond - 3.89% (up 0.10%)
Euro - $1.4807 - now moved above the top of its $1.4750 trading range.
Gold - $894 (up $12)
Oil - $93.71 (down $1.96)
Gasoline - $2.36 (down $0.08)
