Economics Update

Well, it was a tough day for bonds, with prices falling, and yields rising, on US Treasuries, as investors look more to the downside of the economy.

Interestingly enough, we had a lot of mixed signals from real estate, with the
Federal Housing Finance Agency saying that single family home prices rose 0.9% in May, though they are down 5.6% year over year, the U.S. architecture billings index down again in June, which indicates a continued fall in construction, mortgage applications rose last week, though they remain very low, and Standard & Poor’s losses on subprime mortgage backed securities was revised higher.

In the world of real people, the PBGC took over struggling auto parts maker Delphi's pension obligations, which should come as a surprise to no one.

We do seem to be seeing signs of "green shoots" in other countries though, with the
South Korean GDP growing at the fastest rate in 6 years in the last quarter, and the Central Bank of Brazil cutting its benchmark rate by the smallest amount since beginning of the year, indicating that they think that their recession is largely over.

In the old standbys of energy and currency, oil ended above $65/bbl on reports of tight inventories, and the dollar hit a 7 week low on increased optimism.