Okay, so the talk is still a double-dip is possible, some putting the odds as high 50%. How those proclaiming the odds compute those odds is unclear to me, but, no matter, those folks put them out anyway. I wonder how they will factor in the PMI news from Germany, France, and China. All three reported better than expected manufacturing numbers.
Okay, so let’s move away from the economic fundamentals and talk about the upcoming Bernanke pronouncement on Friday, the media says. What will “the Bernank” do? Will he announce QE3, or will he simply leave the door open to some undefined Fed intervention in the economy? Does he see deflation as an issue, and, if so, what can he do about it, especially after two QE interventions failed to keep a bit ‘o inflation in the economy?
Does anyone know what happened to the European sovereign debt/banking crisis? Somehow, I remember that as the “crisis of the week” last week. Yes, I know the problem is still there, but what happened to the urgency, the sense of panic about it all? In fact, how is it that the FTSE, CAC, and the DAX all finished higher today? Go figure.
How about that Libya making it back into the news? Now, we can speculate about the price of oil as it relates to the bringing the oil industry in that country back on line. The latest is that the big oil boys are working right now to get the production going again. Then again, I heard it could take up to 18 months to get Libya back to full production. As well, one speculator suggested that even if the production starts rolling again, oil prices will remain the same because the countries that have added oil to market because of Libya will now pull that oil back. Hmmm … Aside from Saudi Arabia, what countries boosted production? I thought the big hullabaloo when OPEC last met was that members rebuffed Saudi Arabia when it suggested raising production to replace the loss of Libyan oil on the market.
New home sales fell again in July to a five-month low. The flip side is that the inventory of new homes also fell to a 6.6 month supply at the current slow pace. I wonder what would happen if the pace actually picked up? Countering this news is FHA loan demand for Multi-family loans just hit $10.5 billion for the year, a new annual record with a month to go in the fiscal year. So, more folks are renting than buying, which sets up a needed scenario, one necessary to revive the lagging housing market. As demand for rental rises, so will the rental prices. If the rental prices rise high enough and mortgage rates stay low, folks will see it is cheaper to buy than rent. I wonder what that will do the overall housing market? Funny how history tends to repeat itself.
Gold is dropping today, but is the meteoric rise over? We still have the mythical milestone of $2,000 right there, just a bit out of grasp. Well, the way things have been, at the end of today, all the market gains could be losses and that mythical milestone might no longer be mythical.
Despite continually dodging the obsessive dribble about Strauss-Kahn, I managed to get the news above. I’m sure I missed something of import, as nothing above explains the market moving higher with strength as I write. What did I miss?
Trade in the day – Invest in your life …
