The economy is everything these days. The Dow Jones Industrials are 40% lower than they were a year or so ago and 20% for the month. Crime will need to wait.
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The Dow Jones Industrials futures hinted that there could have been a drop of up to 1000 points today. Well, at the opening bell, this seemed to be happening, and fell a bit more than 500 at very high volume. However, as the day unfolded, this crash recovered some and meandered down in the 200 to 400 range The volume dropped after the first five minutes. Don't be particularly surprised if the Dow Jones Industrials fall below 8000, if not today, then next week, as European markets all dropped about 5% today, and the Japan Nikkei fell nearly 10%. However, it is the final hour of this final day of the week that could be scary, and that is three and a half hours away. Then what will happen on Monday, when those mega-crashes tend to occur? WE ARE IN RECESSION. IS THE DEPRESSION COMING?
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With all the above and lowered demand, OPEC suddenly (they normally hand-wringe all day, if not days, but today made the decision in two hours) agreed to reduce production by 1.5 million barrels/day. The only sticking point was that 2 million was close to being the target. Yet, December futures at $50/barrel tripled because even with this announcement, crude prices dropped into the mid $60/bbl range and the Dated Brent Spot at midday was at $60.63/bbl. The only conclusion to all this is an expected very serious recession leading to major demand slips into next year.
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Our auto industry is particularly in bad shape, as GM stock was 15% lower at this point and Chrysler has announced serious layoffs. Gold appears to be finally increasing, $30 to $746/toz at this point. Mergers will be occurring, unemployment will drop further and all international governments will further cut borrowing rates. But General Electric (down from 40 to 17), Microsoft and Johnson and Johnson are becoming extremely attractive buys.
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We now await Monday when votality is at max and metastability is the norm. Well, I'm off to catch a plane and will report next on Black, Red or Green Monday. Who knows what it will be. Certainly, Barack Obama, now in Hawaii, is torn between the horrible state of the economy, but the solidifying assurance that a terrible economy only insures his election on November 4 as President of the United States.
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A tropical depression is strengthening southwest of southern Mexico moving north, to turn west in a day. Now with 40 MPH winds, it might become a tropical storm soon, but should largely dissipate in a few days.
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