Open Thread 7-19-2008
Three weeks ago in the open thread of 6-28-2008, I suggested that maybe oil would top and the market would bottom. It is too early to tell if this weeks market action saw both of those occurences, but both of these markets have certainly put in a short-term top and bottom. Only time will tell if it lasts longer. Calculated Risk had an interesting post this week on the economy. In it, he suggests that the difference between a moderate recession and a severe recession is going to be the price of oil. If the price of oil drops, inflation will subside, the FED can keep interest rates lower for longer, and the recession will not be as severe. I think he is right. I also think this is what the stock market is betting on. As long as oil does not rally to new highs and stay at elevated levels, the stock market will probably rally -- this isn't investment advice, just an observation... BTW, I also believe the bullish action of the last few days in financials and homebuilders was short covering and both of these groups will make fresh lows -- but I could easily be wrong...
There is no particular theme for the music today, I was just in the mood for Paul McCartney.
What are your observations of the housing market? Are there any interesting properties you are watching? Tell us what you see.
