Unemployment Hits 9.4%
Stocks moved sideways today concerned and pleased at the same time about the Unemployment Rate.
Bonds lost value again, gaining to a NEAR TERM HIGH interest rate in the 10 Year Treasury Note. Interest rates are making the most noise right now, and the “bond vigilantes” appear to have returned from the Reagan era. The real question is “What will the FED do about these vigilantes?” Who knows, but history says they can’t do too much about it. If interest rates continue their increase – and they are definitely increasing right now – the recession will stall as a more permanent fixture – and everyone will be crying the blues.
The Dollar gained a very large amount – over 2 cents today.
Gold fell again today, and could be showing a near term peak at $985 with a near term support first at $940 and if this breaks, then at $888. There could be a great opportunity to buy gold coming up. My personal prediction is that we will see a significant high in Gold in September.
Oil and gasoline moved sideways
In the news today……
Unemployment Rate hits 9.4% – and this is only May. While this is subject to revision, the rate as high as 9.4% worries me that my prediction of a 10% unemployment rate by the end of the year might be low. Last month’s unemployment rate was artificially low as many people were on the US Census task, but many of them are coming off that job, and are now unemployed again. Also, remember that unemployment doesn’t include many, many other people who are not working. In reality, the number of people not working is approaching those levels hit during the Great Depression.
345,000 people were added to the unemployment rolls, and this number is significantly less than the 500,000 plus people who lost their jobs in previous months this year. The slowing of the unemployment numbers is a welcome sight, but it will continue growing as jobless rate numbers continue to come in weekly.
The improvement in the unemployment number (345,000) was read by the currency markets as positive for the US Dollar, as it could mean that the US would emerge from the recession ahead of other nations.
Tonight’s Dinner Conversation…..
Do you see those gasoline advertisements that talk about additives that clean your engine (like Shell, but the high end oil companies all have something.)
Well, buy the cheapest gas possible in your town. All the gas in all the gas stations come out of the same pipe. So, you might as well buy it cheap – it’s going to have those additives.
For example, here in Tucson, there is a single pipeline coming from Texas and places further east, and it follows the I-10, and ends up in Phoenix. I know about this because we had a big gasoline pipeline rupture in Tucson about 3 years ago. Well, all the refineries make the same stuff and pump it into the pipeline. Then the trucks (Shell, ARCO, etc.) line up and fill up – taking it to your local gas station.
So, don’t fall for all that bumpf in advertising. This is one of those deep, dark secrets that the gasoline companies don’t want you to know.
Here are the last numbers for today:
Dow Jones 30 Industrial – 8763 (up 13 points)
10 Year Treasury Bond – 3.86% (up 0.15%)
Euro – $1.3968
Gold – $963 (down $20)
Oil – $68.44 (down $0.37)
Gasoline $1.81 (down $0.01)
