Monday, October 15, 2007

THERE IS NOT ENOUGH PAIN YET! The market has shrugged off the potential housing crisis as if nothing has happened. Even our short HOG dropped like a rock only to recover to 50. But this cheerfulness should be short lived. Economists have no clue how slow the real economy is. Just look at the roads. There is less traffic where I live despite fantastic weather. And gas prices have hardly budged even though crude futures set record highs daily. I am no genius, but even I can figure out that domestic US gas stations are seeing less demand. World demand must be incresing to justify $85 per barrel. But certainly not here. If the oil cracks then we will have a worldwide recession. If not, the recession will be contained only to the U.S. giving further credence that we do not matter as much as we used to.