The Economy Guy

Stocks moved up today, up 109 points.  No good reason for the rally???  I wonder if those Tea Parties had anything to do with it?

Everything else (including stocks as far as that goes) went sideways, and they hardly moved today.

In the news today…..

CPI – unexpectedly dropped for the first time in half a century.  CPI fell 0.1%.  The core CPI rose 0.2%, remember that core CPI excludes food and energy.  So, that means food and energy were the total cause of the drop in CPI.  I wouldn’t give this drop in CPI a second thought.  Food and energy are going to go up in the future, and wipe out this aberrant blip of data.

Bank Lending – in spite of the billions poured into the banks by our government – declined 2.2% in February over January.  You see, all that rhetoric from the government about wanting to give money to the banks to improve lending just wasn’t the truth.  They actually just wanted to save the banks – a totally different motivation.

Today’s Tea Parties….

I attended a tea party in my local community this morning.  The tea party was scheduled from 9AM to 2PM.  I took the bus because I was warned that parking could be a problem.  There were 8 other people on my bus going to the tea party.  That was the first big clue that the tea party was going to break the estimated 600 to 1000 people in attendance.  I arrived at 9:30AM.  The park was packed.  I talked to one of the local radio hosts who had set up shop at 5AM for his broadcast.  He said people were already coming there at 5AM – that’s 4 hours early!!!

Naturally, I was concerned with the people who had professional cameras around their neck because there is no doubt that photos will be taken.  Yesterday’s stupid announcement from the US Homeland Security – headed by Janet Napolitano who I personally spent some time with) that everyone having a “Ron Paul for President” bumper sticker should be considered a terrorist by our law enforcement agencies only heightened the attendance at these events in my opinion.

Here are my observations.  This was a poorly organized event – and I appreciated that fact because I was worried that someone’s agenda would be forced down my throat.  Over half the people were carrying home made signs.  There were no “professional” signs.  The mood was a very festive – in other words this was not a lynch mob.  There is no doubt that the “tea party” concept that has swept across the USA today is touching a very deep feeling in the general public.  (For any readers in the UK, please understand that our tea parties today have NO reflection on the British – only on the current US administration.)

It’s impossible to predict where this movement will be going in the future.  It’s impossible to say this will turn into a negative vote against Congress next year – but it definitely has that possibility.

Why am I talking about this at all?  This feeling in the country could easily change the economic direction of the country in two years.

Here are the last numbers for today:
Dow Jones 30 Industrial – 8030 (up 109 points)
10 Year Treasury Bond – 2.76% (down 0.03%)
Euro – $1.3227
Gold – $894 (up $2)
Oil – $49.25 (down $0.16)
Gasoline – $1.45 (down $0.01)