All eyes are on the Fed today. Regardless of the outcome, the equity markets will probably retest last weeks lows in the days and weeks ahead.
Everyone talks about an independent Fed, but you and I know better. Isn't it amazing how traders have the ability to hold a gun to the FOMC's head, and the Fed complies.
The dollar continues to sink, and why not? Money continues to be created out of thin air so that spend thrift consumers can continue to pay billions of dollars in interest on loans. The international bankers have seized control over politics, media and consumers worldwide. The only ones they don't control are citizens who refuse to be held hostage by debt.
In any event, the recent series of rate cuts are going to be wonderful for investors who are sitting back and accumulating bank stocks as panicky investors sell into the decline. As I said last week, this is not the time to be a stock wimp! You've got the power of the international bankers on your side, why not seize the moment.
Speaking of bankers, Switzerland's UBS wrote off $14 billion in sub prime mortgages. Once again this is a classic case of how smart people do some really dumb things. I'll bet UBS is cursing the day they bought PaineWebber. Life was so much simpler being a Swiss Bank.
Why anyone other than a loan shark would get into the sub-prime loan business is beyond me. That's like loaning money to a kid who doesn't have a job, drinks heavily, and does drugs. Sooner or later you've got to realize your not going to be paid back.
Today's ADP Employment Report showed a monthly (December 2007-January 2008) jobs increase of 130,000. Once again, the jobs created were "yes, sir- no sir" service related jobs. Manufacturing showed no increase and is essentially dead.
I have changed my tune a little on outsourcing, and hiring illegals to do mundane labor. I few weeks ago I spoke with some business owners, and they said the work ethic of the Americans they hired was atrocious.
They complained that several of the American workers they hired had drug and alcohol problems. Many would show up late to work, or not show up at all. They also said they didn't have this problem with Mexican workers.
So, despite what we hear, there are two sides to every story. As for the innocent, hard working Americans who lose their jobs because of outsourcing, this should not happen.
In other news, it looks as if the media’s focus on their favorite candidates is working. I.E. - American public responds to whatever the media says. Clinton, Obama, McCain, and Romney took the top spots in yesterday's Florida primary.
Clinton is waffling on ending the war in Iraq. Obama is a mystery, not qualified, but hates the war. McCain and Romney will continue to fight "Pink Elephants" in Iraq, and are ignoring the fact that 15 of the 19 September 11th hijackers were from Saudi Arabia. God help us.
I'll bet Ronald Reagan was beating on the inside top of his coffin trying to get out after hearing who the top candidates were. I miss you Ronnie.
The GDP numbers released today showed the weakest US gross domestic growth since 2002. Yes, this means the economy has slowed, and will take several months to turn around.
Crude oil is trading up this morning ahead of the FOMC decision. The March contract is trading up 64 cents to $92.28/bbl. The market has priced in another 50 to 75 basis point cut, so energy prices could fall if the Fed offers anything less.
The EIA released its inventory numbers for the week ending 1/18/08. Crude and gasoline had larger than expected builds. Distillate had a surprise draw. Based on this news energy prices should be declining, but that's not the case.
Crude Oil: Up 2.297 million barrels
Gasoline: Up 5.085 million barrels
Distillate: Down 1.302 million barrels
