The Economy Guy

Stocks moved sideways, and maintained their current high levels.

Everything else moved sideways today.

Notably, oil is no above $68/barrel, and should portend higher energy prices.  Gasoline is not behaving itself very well.  You see that gasoline prices are going up at the pump for the last 3 days.  However, there is a massive glut of gasoline around the US, so prices should be going down.   The conclusion – speculators are playing havoc with gasoline prices right now.  I hate speculators who invade my spending.

In the news today…..

The economic news is really that stocks are at such a high level, and the bulls are coming out now making the case for a bull run that will go on forever.  There was a WSJ article today stating just that.  To interpret this enthusiasm, you must believe that the stock market will recover in a “V-shaped” method.  That’s what happened so far.  And, you must believe we are at the bottom of this recession.  And, you must believe that good things will continue to happen in the economy without any bad thing happening.

The reasoning that I believe that stocks are so strong is as follows:  There are a bunch of money managers out there who were sitting on the sidelines waiting to see what would happen.  Now these guys are judged by comparing themselves to all other money managers.  Their funds must be at least in the middle of the pack, and hopefully better.  Otherwise, their bonuses and even their jobs are at stake.  So, these guys are seeing the market going straight up, and they fear missing the bus more than making a wrong move.  Everyone is jumping on the bus, so the bus is moving up.

Warren Buffett has said to buy stocks no – even thought the DOW is at 9000.  And, he’s no sluff.  
 

Here are the last numbers for today:
Dow Jones 30 Industrial – 9093 (up 24 points)
10 Year Treasury Bond – 3.67% (up 0.04%)
Euro – $1.4214
Gold – $953 (down $2)
Oil – $68.05 (up $0.89)
Gasoline $1.92 (no change)