Friday, August 01, 2008
Unemployment jumped to 5.7% beating estimates, but June employment payrolls 17,000 less than expected. Who makes these estimates!?!?!?! So far, the economy has lost a total of 463,000 jobs this year. Alan Greenspan, famous for being pulled out of the mothballs and dusted off, talked about what he feels as an eminent recession on the horizon. His words, not mine Steve... Here's where the bonds will have a hard time making ground today even with the DOW down more than 70 points in early trading. On his interview on CNBC, he felt that the U.S. housing market is "nowhere near the bottom", and that the government will probably have to nationalize Freddie and Fannie, calling them a "major accident waiting to happen." Thanks Alan. What will really put us into a recession and kill housing more than the actual effects of the downturn is the media time that news like that makes. The bond is down 4 Bps for the day barely holding on to yesterday's gains. Floating the rate in hopes that rates will improve isn't insane, just keep an eye out on the Stock market. If we start to see positive numbers there, you can bet it is taking money from the bond.
I will be out of the office on Monday, but if there ane any questions please don't hesitate to call.
Karl Menzer
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