Monday, September 24, 2007

Bull or Bear?

Is it just me or does this feel like we are bumping up against a bit of a financial wall? Oil is sitting at $80 per barrel; the dollar continues to fall; despite taking a breather, the market is not able to keep above 13,500 without getting all wobbly; and now the UAW is out on strike.

While all this dollar weakness this all may be good for US exports, consumer spending still seems to be slowing and the declining housing market continues to add a drag-anchor to the whole domestic economy. Further cuts in interest rates are being talked about - again, and just a week or so after the last one - but take that step and you run the risk not only of sparking inflation but also of sending the dollar into a real tail-spin, further reducing the options available to the Federal Reserve to control things.

Perhaps I'm just tired and feeling a bit low from the travel, Q-end stress etc. Then again ... that may not make me wrong.

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