Economics Update

Thursday is new jobless day, and the numbers suck with new claims falling to a still very high 646,000 and continuing claims hitting a new record of 5.47 million, which is a new record....Again.

This implies that people are still unable to find jobs, but, for a while, at least, employers have run out of people to lay off....Delightful.

We also had the Leading Economic Indicators falling, though not as badly as the consensus prediction, and the Philadelphia Fed Business Outlook Survey for March remained awful, from -41.3 in February to -35.0 this month, so we are still seeing a contraction.

In the auto industry, the bailout has been extended to parts suppliers, to the tune of %5 billion.

In real estate, it looks like Moody's might cut the ratings on some $241 billion of debt for jumbo mortgages, which means that it must suck to live in a high cost real estate area right now.

In the world of the here and now, Moody’s did downgrade insurance company Prudential, and I'm wondering how long before the rest of the insurance industry looks like AIG.

In any case, it appears that the Fed's decision to start quantitative easing (printing money) is having an effect, with the cost of borrowing falling, with 30-year fixed mortgages falling to 4.98%.

The Fed has also driven the US dollar lower, with the dollar hitting $1.36:€1.00 for the first time since January.

We are also hearing rumors that Citi is considering a reverse stock split, my guess is that this is how they want to address the worry that they might become a penny stock.

In energy, oil broke $50/bbl for the first time this year, on the falling dollar and reports that OPEC members are more-or-less keeping to their quotas.