Speculative Bubbles
Stocks moved up slightly today, up 69 points. Bonds lost value ending up in interest rate at 3.92% – showing a concern for inflation, and the bond supplies coming on line the next 2 days.
Oil was the big story, dropping over $3 – this is great news if it is the first step in the speculative bubble unwinding – we’ll have to wait and see. Gasoline fell just one cent. Gold fell considerably to $907, but remains a reasonable investment.
In the news today….
Here is a quote from Warren Buffett that he made on his current European tour.
- The US is in a recession.
- The recession will be deeper and longer than anyone suspects
- “It’s not right that hundred of thousands of jobs are being eliminated, that entire industrial sectors in the real economy are being wiped out by financial bets even though the sectors are in good health.”
Buffett holds no punches. He sincerely dislikes the Wall St. speculators who are destroying sectors of the economy, and risking the health of the financial system. Think oil when you think speculators. Also, think derivatives when you think speculators.
New Home Sales were up 3.3% in April, probably because the March new home sales figures were revised downwards 11%. That allows the next month to become positive – get it???? It’s a trick!!!!!! But, it certainly makes good headlines, and the press are so stupid they buy it.
Consumer Confidence fell to its lowest level since 1992. You know this intuitively yourselves. But, it is measured also. It’s kind of a poll, and you know how good polls are during election years. Well, this poll is just about as good.
Here are today’s numbers:
Dow Jones 30 Industrial – 12,548 (up 69 points)
10 Year Treasury Bond – 3.92% (up 0.09%) – back to a high
Euro – 1.5691
Gold – $907 (down $19)
Oil – $128.85 (down $3.34)
Gasoline – $3.38 (dwon $0.01) – not much of a drop considering oil’s drop. This shows gasoline is NOT closely tied to oil price.