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Drop in Summer Traffic Causes Dent at the Pump
Gas prices usually peak in the summer when millions of Americans hit the road for weekend getaways. This year, however, a surge in unemployment and a drop in summer traffic have kept prices at the pump in check.
Gasoline prices are expected to average $2.49 a gallon nationwide from April to September, according to a report published by the Energy Information Administration (EIA). That’s down from $3.81 a gallon last summer.
But, falling prices at the pump won’t necessarily coax more drivers onto the road. The International Energy Agency (IEA) predicted that global oil demand would contract by 2.9% this year.
“I don’t know necessarily if…
20Jul2009 | Money Morning | 0 comments | ContinuedSmall and Midsized Banks Could Exceed Losses of $200 Billion in 2010
More than 900 small and mid-sized banks could face an aggregate $200 billion in losses by the end of next year if economic conditions worsen, according a study conducted by The Wall Street Journal.
Using the same worst-case scenario the U.S. Federal Reserve employed in its recent stress test of the 19 largest U.S. banks, the Journal examined the health of 940 small and midsized banks that had total assets of $2.8 trillion as of Dec. 31, 2008. Because the study was based on data from 2008 filings with the Federal Reserve, it did not take into account any capital raised by…
20May2009 | Money Morning | 0 comments | ContinuedCould Credit Default Swaps Reverse U.S. Economic Recovery Efforts?
While the entire U.S. housing market was on the verge of collapse and corporate America was being systemically undermined, regulators purposely looked the other way.
Why would they do this?
The truth is that U.S. regulators believed the American public couldn’t handle the truth that what had been allowed to happen, on their watch, was actually happening.
Unfortunately, we now face the same situation with credit default swaps, a derivative security that has the ability to destroy otherwise healthy companies with the virulence of a full-blown plague.
Until the American public understands this, and forces the government to take action, the odds of a…
15May2009 | Money Morning | 0 comments | ContinuedPeter Schiff WSJ editorial
By borrowing more than it can ever pay back, the government will guarantee higher inflation for years to come, thereby diminishing the value of all that Americans have saved and acquired. For now the inflationary tide is being held back by the countervailing pressures of bursting asset bubbles in real estate and stocks, forced liquidations in commodities, and troubled retailers slashing prices to unload excess inventory. But when the dust settles, trillions of new dollars will remain, chasing a diminished supply of goods. We will be left with 1970s-style stagflation, only with a much sharper contraction and significantly higher inflation.
The…
29Dec2008 | The Real Deal | 0 comments | ContinuedFed to Cut Rates at Next FOMC Meeting as U.S. Recession Appears Likely
The U.S. Federal Reserve is likely to cut rates tomorrow (Wednesday), possibly in conjunction with central bank counterparts in Europe, as fears of a global recession have intensified. However, the Fed has little room to maneuver as its benchmark Federal Funds rate is already at 2% and analysts remain skeptical that reducing it any further keep the United States from sliding into a prolonged recession.
The next meeting of the Federal Open Market Committee is scheduled for tomorrow Wednesday Oct. 29. There is no doubt that growth will be the central issue of the committee’s discussion, as fears of a global…
28Oct2008 | Money Morning | Comments Off | ContinuedDow Transports Say: The Bull Market Lives!
Matt McAbby
Quantitative Analyst, Oxbury Research
Dow Theory, developed originally by Charles Dow, the founder and editor of The Wall Street Journal, is one of the oldest and most reliable methods of market analysis available to investors. Without getting into all the particulars, one of the key tenets of Dow Theory is that both the Dow Transport Average and the Dow Industrial Average must confirm one another when bull and bear markets begin. Below we examine exactly how this works.
But first, let’s take a brief look at the relationship that binds the Transports to the Industrials.
There are two aspects to traditional industrial…
3Sep2008 | Oxbury Research | Comments Off | ContinuedGlobal Investing Roundups
GM Pins Hopes on Cruze; GameStop’s Worried Outlook; New Car-Parts Leader; U.K.’s Retail Sale Surprise; Oil Bounces Back; Is Lehman a Takeover Target?; Jobless Claims on Decline; BK Has Its Way
-General Motors Corp. (GM) announced yesterday (Thursday) it plans to invest $500 million in an Ohio plant that will be retooled to produce the smaller, gas-efficient Chevrolet Cruze. The half-billion dollar project is part of GM’s commitment to focus on smaller models in response to high gas prices. The Lordstown, Ohio plant will begin manufacture of the Cruze in 2010, MarketWatch reported.
-Shares of video-game retailer GameStop Corp. (GME) fell to $41 before…
22Aug2008 | Money Morning | Comments Off | ContinuedFinancial Correction Center
“Fed keeps short-term interest rate at 2%”, says today’s big financial headline. Stock market investors loved it. They bid up the Dow 331 points. “The correction is over,” they seemed to say.
The Bernanke team knew it would be damned for sending the U.S. into recession if it raised rates. It knew too that it would be damned for allowing inflation out of its cage if it cut them. So it decided to do nothing.
“Although downside risks to growth remain,” said a Fed spokesman, “the upside risks to inflation are also of significant concern to the committee.”
Here at The Daily Reckoning…
7Aug2008 | Daily Reckoning | Comments Off | ContinuedMultinational Corporations Step up the Search for the “Next China”
As far as foreign direct investment in Asia is concerned, China is still the undisputed leader, drawing approximately $42.78 billion in just the first five months of the year, an increase of 55% from the same period a year ago.
But China is coping with a number of growing pains that include higher wages and a strengthening currency. That has left a void for other emerging markets to step up and take the place of a multinational corporation’s best friend.
China used to be thought of as the world’s factory floor – a haven of cheap labor and minimal regulatory oversight for…
20Jun2008 | Money Morning | Comments Off | ContinuedMake Way for the Emerging Consumer
Finally, Americans are getting some relief. They no longer have to carry the whole world economy on their shoulders…
But we’ll come back to this….
First, a look at Wall Street.
The Dow tumbled more than 200 points yesterday. Oil rose $5. The euro rose against the dollar – to $.155. Gold shot up $11. And the yield on the 10-year note fell to 4.07%.
No biggie.
So, let’s go to today’s two top stories:
The first from Bloomberg: “China exports unexpectedly grow 28%.”
And this from the Wall Street Journal:
“Global inflation’s bite worsens.”
What is going on? The world economy is supposed to be slowing down. Inflation rates should…
13Jun2008 | Money Morning | Comments Off | Continued
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