Friday, August 21, 2009

Pigs, Turkeys and the Fed Chairman, pick the one that doesn't sneeze

The Fed Chairman says the economy has bottomed out (maybe) and he plans to stop buying Treasury Bonds in October (maybe). Maybe is the operative word with the Chairman. And last year, that was maybe just a market panic, nothing serious. The Chairman has passed out 24 Trillion dollars in the past two years to keep the big banks afloat, nothing serious folks, just a panic.

Back to reality: We set another new record for delinquent mortgages. Grinding unemployment is dragging down fixed rate mortgage holders. New unemployment claims were up unexpectedly and are again approaching 600 thousand per week not counting people with no eligibility for benefits.
Oil is being run up by speculators and this is putting a drag on the economy. The Dollar has been up since last year’s "panic" but Europe is recovering since they didn’t abandon their workers and have been stimulating from the bottom up.

With the Euro recovering, this will eventually drive the Dollar right to the basement and if the Euro doesn’t do it, there is China. They have been keeping their currency artificially low since they already take in more Dollars than they can ever spend since we don’t make anything. At some point China will stop propping up the Dollar and imports of any kind will become impossible to pay for.

Swine Flu however, is on the upswing. The H1N1 virus doubles every three days in dry air and with Fall comes cool dry air. Forget buying masks, buy a humidifier. The virus has been identified in turkey flocks, not a big deal for the turkeys, but for us it might be. As this virus moves around from people to pigs to turkeys and back again it produces uncountable mutations. Almost all of them are not viable. Almost all of them. It’s a race to see if everybody gets the relatively harmless version before a deadly one develops. Don’t let the Fed Chairman sneeze on you.