Title: Taking Stock Of Where We Are
Tags: economy inflation debt housing stocks
Blog Entry: Wanted to do a quick update on where I think we are in these great unchartered waters. Today the market closed up 96 pts right at 8500 on the DOW. It seems like things just want to keep going up for now. I was thinking this morning that the fundamentals may not matter anymore and I am kind of on the fence with those thoughts. What I mean is we keep hearing about recovery this and recovery that but what is it all really based on? The market is up over 30% from the March lows but I can't help but think that is do to nothing more than all of the hot money being thrown at the problems. The facts, if you look at them, just do not seem to support all of the euphoria. It doesn't seem to matter that we are still losing over half a million jobs a month. Hey, this month was a little less bad than last month. Yeah! Let's celebrate. The fact is the bond market seems to be doing a death defying act by staying where it is even as yields continue to creep up. Does no one realize that interest rates spiked this week? How do we get a housing recovery if rates continue to rise? God forbid we get back into the mid 5% range. Maybe this is what climbing the wall of worry is all about. Be that as it may there is this nagging feeling that things are about to get really hairy. The dollar may be telling the story as it closed this week under 80 for the first time in quite a while. Gold and oil are spiking as it looks like we may be heading back towards exactly what happened last summer. The dollar tanks and cash flees towards hard assets. If that is the case then it is hard to believe that a spike in inflation is not right around the corner. Just seems scary, rising rates, rising commodity prices, rising unemployment just seems to equal much bigger problems on the horizon.
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