6/17/08
Recently, stock markets perform are almost 100% co-relate to price of the oil future everyday. If oil is trading up, stock markets is going down and the opposite holds true so far. Our Feds member has showed caution on inflation problem finally and indicate cannot let this expectation keep growing. However, today's economic data PPI showed us very bad idea that the inflation indeed keep going higher (PPI showed that "Wholesale prices posted its biggest gain in 6 months). Here is the reality that inflation is continuing to increase. In May 2007 the inflation rate was 2.69% and last month (May 2008), it was 4.8%. This was year over year increase of 55.39%. At this current rate increase of inflation, it is possible for the inflation rate to increase +10% from where it is now to coming falls. (Recently, flooding is causing Iowa Agriculture price likely to go up soon) Oil is going up. Folks, who could help me out to prove the economy and stock markets could both perform well in these kind of economic environment. Our US banks are not getting out of the sub-prime mess wood yet. They are all very hunger to need fresh cash capitals but they all keep dilute the shareholders value of their investments. We have long way to suffer to get the bottom. Stay very caution and do not believe any stupid analyst who said we are BOTTOM on housing or economy or stock markets. Believe your eyes on the charts you see, the data you trust. Make your own analysis. Good luck for this witch option expiration week of trading.
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2 comments:
Isn't this just great :( Well, I guess we might as well get ready for the next great depression.
I agree. If banks and investment banks both are still constantly needing capital as well as the housing keep going down, US is gradually getting into next great depression.
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