Economics Update

After 5 straight months of non-farm payroll job cuts, we are finally seeing an increase in the unemployment rate, ½% to 5.5%. It's the biggest rise in 22 years, and it appears that the we've run out of discouraged workers, who are not counted as unemployed, to keep the rates low.

Oil, which had been trending down since May 22, reversed itself and hit a new record, peaking at $138.36/bbl. Retail gasoline, however, finally fell a bit (scroll down), down to $3.986 yesterday's record of $3.989.

That's the first time that gasoline prices have fallen in nearly a month.

Not surprisingly, all this has pummeled the dollar which has weakened to $1.5751 from $1.5592 yesterday to the Euro.

BTW, it's not just monoliner insurers that are hurting, Fitch has downgraded mortgage insurers MGIC and PMI ratings, two of the larger mortgage insurers to to BBB+ from A.

If they go under, millions of people will technically be in default on their mortgage until they find another insurer.

Given all this, it's no surprise that Federal Deposit Insurance Corp Chairman Sheila Bair is saying that we may see some failures of larger banks.