Who Can Fix The Economy?
Stocks rose out of pure boredom, up 73 points. Bonds moved sideways, as did oil and gasoline. Today was a short session so Wall St. could get home to get ready for the fireworks tomorrow. Happy 3rd of July.
Gold fell $13 today as people took their profits from the recent major run-up in gold.
The Dollar gained significantly as the European Central Bank announced an increase in their key interest rates. You would think that the dollar would fall on this news are more money would move to the Euro, rather than stay in the low dollar interest rates. However, this is a great example of “Buy on the rumors, and Sell on the news.” That’s exactly what happened to the Euro this week. This is true wisdom for people trying to time the market.
In the news today….
Oil spiked in Europe above $146, as the European Central Bank (ECB) raised interest rates by 0.25% to 4.25%. The head of the ECB did not emphasize that he would be raising rates in the future to fight inflation (the current reason) - so this caused the crash in the Euro. However, logic says that inflation doesn’t stop overnight, so future rate rises are in order in Europe.
US unemployment rate stayed unchanged at 5.5% - not much news here, as this is a manipulated number anyway. You know that more and more people are losing their jobs, so the trend is very clear = recession.
Tonight’s Dinner Conversation
Here is a recent poll. Barach Obama got 32% and McCain got 28%. What was the question???? “Which presidential candidate can fix our economy?”
Here is the interesting point. 40% of those polled didn’t know, or thought neither of them could fix the economy. You see – the general public is really smart. In reality, a president can do very little to affect the US economy. The FED Chairman is much more powerful than the President at affecting the economy.
So, the question for you tonight is, “What CAN a President do to affect the economy?”
HINT: A president can set the tone and environment for the economy. This means the President can certainly make an economy WORSE. But, how does he make it better?
Here are today’s numbers:
Dow Jones 30 Industrial - 11289 (up 73 points)
10 Year Treasury Bond - 3.97% (up 0.01%)
Euro - $1.5699
Gold - $934 (down $13)
Oil - $143.79 (up $0.19)
Gasoline - $3.55 (no change)
