Economics Update

We now have the Fed's report on national industrial activity, and the may disappoints, with activity falling 0.2% when an 0.1% increase had been predicted by economists.

I'm not sure if it factors in inflation, but if it does not, then those numbers are absolutely horrific, as the producer price index rose 1.4% in May, which is grim....Over the last year, the PPI has gone up 7.2%.

Note that this is going on while housing starts fell 3.3%, which is the lowest rate since March of 1991, 17 years.

No wonder that the builders' confidence survey just hit a record low, matching the record established in December of last year.

Of course, that doesn't take into account that the National Association of Realtors isn't getting the numbers that they report right. They claimed that NJ home sales were up 4% in the Q1 when they were down 30%....that's a hell of a "mistake".


It's no wonder that Goldman Sachs is suggesting that banks may need to raise another $65 billion to cover mortgage losses.

It's even less of a wonder that investors are waiting for more dividend cuts from banks. No profit should mean no dividends.

Of course, the Fed is continuing to let banks get free money for sh%$ pile assets, this time to the tune of $75 billion.

There is good news in energy though, with both oil and retail gasoline coming down a bit today.

The standard wisdom would suggest that this was because of a strengthening dollar, but the greenback fell today.