The Economy Guy

It is the last day of the quarter.  One day away from April Fool’s Day.  Stocks do funny things on this day.  This is the day that all financial investors start to show what they made over the last quarter.  And, it also shows what stocks they have in their portfolio.  So, financial managers are selling to take profits and buying to have the “right” stock in their list.

To give you an insider perspective of the US stock market, on Monday Citigroup shares accounted for 25% of all the volume traded on that day.  This can be interpreted that the market is trading in low volumes (thin trading) and it could be interpreted as topping out.  What do you think the 25% statistic means besides there were a lot of Citigroup shares traded?

Stocks fell 50 points today, and bond interest rates fell a little too.

The Dollar fell one cent against the Euro, and Gold strengthened (really going sideways right now), and oil/gasoline rose.  Expect higher gas prices.

In the news today….

23,000 lost jobs – in March according to ADP.  There are two sources of the jobless numbers.  The first to come out is the ADP number which they get by processing a bunch of companies payrolls.  This is an estimate, but is based on real numbers from real employers.  The second source is the US Labor Dept, and is based on a computer model of a bunch of things – none of which are people working or not working.  Which do you believe?  My answer: neither.  Use your own senses, and look around.  How is the employment situation in your locale?  The US government number will be coming out shortly, so don’t get all excited.  The stock market was disappointed by this number as it didn’t show the growth (ergo higher stock prices) that they anticipated and wanted.  The ADP number doesn’t include the gazillions of census workers that the government has hired temporarily.  But, the government number will include them – so just ignore the census workers part of the numbers – they don’t count toward a sustained recovery idea anyway.

Factory Orders rose – in March 0.6% (month over month).  This is the 10th increase in 11 months – a very positive sign that factories are making more stuff.  Why?  Because they stopped making stuff when the downdraft occurred, and then the shelves were bare – so they’ve started again.  Also included in this number is the volatile category of aircraft manufactured – which rose 33% last month.

Tonight’s Dinner Conversation…..

What’s happening in America today?  The Big Picture….. In summary, the income of Americans is decreasing, the education of Americans is decreasing, the healthcare status of Americans is declining.  This isn’t the dream of being an American that people have when they want to live here, or were born here, and remember stories of how it was from their parents and grandparents.  The noise you hear around you is the impetus of Americans standing up and being counted right now.  Something fundamental is going on in politics – people are paying attention, whereas they have never paid attention before in my lifetime – and we’re talking about a long time.

What will it take to turn this around?  It will take TOUGH choices – a budget cutting choice to balance the US federal budget to have fiscal responsibility.  It will take the hard choice of fixing the Social Security System.  It will take the hard choice of reducing healthcare costs.  (This is not what the latest Obamacare has done – it has probably caused a massive increase in entitlement costs in America – and this only makes matters worse.)  If those 3 things are done, America can turn itself around.

We must avoid the “tipping point” where foreigners stop buying US Treasury bonds.  If they stop, then US interest rates will go up dramatically, and the US Dollar will fall very quickly.  This would result in a world depression.  We can only avoid this tipping point by making the hard fiscal budget decisions – thereby maintaining the confidence that foreigners have expressed in American debt in the past.

The last Bush administration was the LEAST fiscally responsible in the history of the US.  While Obama hasn’t completed his term yet, he has shown the tendency to spend his way out of this – thereby making matters worse.  Obama, to his credit, has appointed a committee to come up with recommendations on how to fix our economic problems.  The last time this was done was under Reagan – and the recommendations made under Reagan were entirely ignored – so history doesn’t bode well for the current committee’s recommendations – even if they aren’t politically motivated.

So, how do we fix the fiscal problems facing the US in the near term, and the long term?  Those decision are made (according to our Constitution) by our elected officials.  And, the officials that are in office RIGHT NOW are the problem.  Many have been around long enough to have their fingerprints on Bush’s disaster.  The rest have the fingerprints on Obama’s fiscal mess (he’s increased the deficit more than ALL previous presidents’ deficits added together). So, our elected officials are all guilty of getting us in this mess.  Their resumes should state that they just were asleep at the switch whenever fiscal matters were raised.  They have earned our vote – AGAINST them.

All this leads me to continue to say that “We must throw all the scumbags out of office.”  Vote now and vote often.

You can’t make this stuff up……

A great-grandmother in the UK was fined 1000 pounds and has to wear a “bracelet” and now has a criminal record for selling a goldfish to a 14 year old.  The British law says you can’t see a pet to anyone under 16.  Is this where liberal thinking takes us?

Here are the last numbers for today:
Dow Jones 30 Industrial – 10,857 (down 51)
10 Year Treasury Bond – 3.83% (down 0.04%)
Euro – $1.3510
Gold – $1112 (up $8)
Oil – $83.49 (up $1.12)
Gasoline – $2.31  (up $0.04)