Pessimism STILL Rules...
The government bailout of FNM and FRE cannot mask the fact that many economic indicators are still going downwards, including the Pending Home Sales number announced today (see economic calendar), suggesting that the housing crisis, and therefore the credit crisis, is far from over. Reality hit overly optimistic investors today as the Dow took back all the gains from the previous day, continuing its neutral trend. While the Dow is comfortably bobbing on its neutral bouyancy, the Nasdaq Composite has been hit this month so far with pressure from the energy and basic materials sector, continuing its primary bear trend. On the bright side, the US dollar continues to strengthen, putting continuing pressure on oil price. If oil price can be sustainably subdued, we could see a recovery to the CPI and PPI numbers in the months to come and that could inject the long awaited optimism. For now, bond traders continue to take bond yields lower across the board, demonstrating a lack of faith in the stock market.
posted by Jason Ng at 5:19 PM
2 Comments:
Hi Jason,
Great analysis of the housing sector and ongoing pessimism in the credit markets.
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of course the credit crisis is far from over It's all over the news and everywhere you look: the economy isn't so good in the US right now. To give you an idea of how bad the economy is, consider this:
the minimum wage is somewhere around $7.00 an hour. A gallon of gas here costs $3.30 a gallon, a gallon of milk is $3.50. So, putting this into perspective, one must work for an entire hour to earn enough to buy 1 gallon of gas and milk.
Interest rates on a regular savings account is less than 1%.
The economy sucks right now. It takes about 7 years to reverse this trend started by this administration.
-Barbara
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