Feb

27

Stock Market Close

By Chuck

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The Dow barely held the gains it made after the announcement that OFHEO raised the caps on Fannie and Freddie.  Oil pulled back off it’s high of over $101, and gold is up $12 to $960.

Bernanke’s testimony today indicated that the Fed will continue to cut rates to assist the credit markets.  Of course, the credit markets are important to the economy.  He wouldn’t discuss the value or devaluing of the dollar and the implication, along with other things he said, is that inflation is not a concern for them.  They are quite comfortable with their phony core inflation numbers.  The only thing that will make everything "A-OK" in the entire financial markets, is if the housing prices do not fall.  There are people who are trying to figure out how to make that happen, to keep this asset from deflating.  Part of that plan would have to include convincing underwater, cash-poor borrowers to continue to put all their resources into making mortgage payments.  Where I come from, we call that trying to "get blood out of a turnip."