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Non-Tech : Trends Worth Watching
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To: richardred who wrote (675)8/28/2006 3:56:55 PM
From: Rarebird  Read Replies (1) of 3363
 
<<The paper reports that with EMPLOYMENT gains softening in recent months, inflationary pressures stay high due to factors such as high energy prices, so the gap between wages and prices could increase for many workers.>>

If up to half of the employment gains over the past three years have come from housing, a reversal of real estate would place the economy at risk. Gains in employment in the recovery achieved only a 2% year over year increase, which is quite anemic. This has so far been a forced recovery, induced by extreme money growth and 1% interest rates, not the normal recovery paced by consumer demand and low inventories.

Consumers now appear to be stretched, casual dinners will note how few other customers are now eating out.

Moreover, mortgage applications have been on the rise for the last two weeks. However, a careful examination of the data reveals a curious picture. Applications for purchasing a home have been on the decline, it is the need of home owners to refinance their loans that has made up the difference. This may be an indication that disposable income is being cut with a negative impact on the economy and stocks.

With the way the stock market has been rallying lately, it seems hard to believe that there could be serious problems lying straight ahead. But that's how Wall Street operates: destroy as many shorts as possible during the dog days of August before the September/October Massacre.
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