Let’s look at two issues oil and housing. The president could sell some of the oil in the strategic reserve and hope that it may bring down the price of oil. Not. There is about 750 million barrels of oil in the Strategic Petroleum Reserve. We use about 25 million barrel of oil a day in the
We have to do something about the oil problem, but again people don’t seem to be willing to admit that we can’t solve the problem over night regardless of what the president says. My wife showed me an article in the Newark Star Ledger on the decline in imperial
The one thing that both of these very serious problems have in common is that they can’t be solved over night regardless of who is elected president. We want to believe that the new president can fix all of our problem, but no matter how much we want to believe it "aint going to happen".This week it was reported that foreclosures were the highest in history on a year to date basis and the bankruptcy fillings were higher than just before the change in the bankruptcy laws. If the amount of inventory of older home for sale in the market is in excess of 12 months supply and the inventory of new homes for sale is just over 11 months, how are we going to solve the problem of excess housing over night?
All of the major stock market indexes closed on Friday down about thee percent for the day, and down between 7% and 8% on a year to date basis. As you can see from the chart above it has been a volatile six months. Many of the credit problems we thought were fixed in the first quarter are showing up again with vengeance. The problems of oil price, credit problems and housing are showing up in the markets in a negative way. The markets are stuck in a trading range. The Dow Jones seems to be stuck in the range form 11,800 to 13,000. My concern is that we may break the range on the low side and find ourselves in a new trading rang but a lower one.