Economics Update

Well, the ADP payroll estimate is out, and they are estimating a drop of 532,000 in non-farm payrolls, which is better than last month, but is still in major league suckage territory.

The Institute for Supply Management’s index of non-manufacturing businesses is in the same boat, which covers the services sector, is still declining, but not quite as badly.

So, things are getting worse less quickly, not getting better.

Meanwhile in the junction of banking and real estate, S&P has downgraded 59 prime Residential Mortgage Backed Securities (RMBS) to D, which, according to the Wiki, means, "Bankruptcy or lasting inability to make payments most likely."

With all this going on in mortgages, it is not surprising that we are seeing higher rates and fewer mortgage applications.

Well, at least we are not in Latvia, whose government was unable to sell debt today....That's right, we aren't talking about paying more interest than anticipated, no one would buy their debt.

Mean while, the news of reduced demand and a surge in inventory drove oil down, while the dismal economic news drove the dollar higher, as investor looked for safe havens.

My guess is that the trend in the dollar is down, and it will be firmly ensconced somewhere weaker than $1.50:€1.00 by year's end