IT'S JUST TOO GOOD TO BE.....ECONOMIC UPDATE

U. S. Markets were doing the happy dance this week when unexpected strong corporate earnings from Ford (from European sales), American Express (from overseas business), and Goodyear Tires (overseas purchases) steadied the Stock Market. According to the unemployment claims more people are working and the combination contributed to Wall Street’s good mood. Reports in major publications crooned that the worst was over. For those of us that believe that we are already in a recession, the reports stated that we are coming out of it. For those who believe we are not in a recession, the reports stated the economy has dodged a bullet. The markets ignored any reports pertaining to finance or housing. With all of this “good news” it is conventional wisdom that the Fed will only drop the Fed rate .250 and it may be the last change for awhile. Cutting the rates may have helped banks borrow money cheaply but it has hurt the worth of the dollar overseas and has helped the continued climb of oil rates. Also with the Chinese purchasing cars in record numbers it has only increased demand for oil and therefore kept the price of oil at historic levels.