Moon of Alabama Brecht quote
August 01, 2008

Financial News Logic

NEW YORK - Wall Street shot higher Tuesday, gaining back the previous session's sharp losses and then some, after a drop in oil prices and a rise in consumer confidence gave investors some hope for a letup in Americans' financial woes.
Stocks soar after another drop in oil prices , AP, July 29

NEW YORK - Oil prices are surging, jumping more than $3 a barrel after weak data on U.S. jobs and manufacturing activity led investors to shift money out of stocks and into crude contracts.
Oil prices jump $3 as stocks fall on US jobs data, AP, August 1

In the first piece a drop in oil prices is said to have caused an upward reaction in the stock market. The second piece asserts that movement out of stocks caused an increase in oil prices.

Both arguments are wrong and both pieces include no information that would support the asserted causations. There is simply no direct relation between oil prices and stocks (exception: producing oil companies).

But I seem to stumble more and more over such hapless reporting on economics. I pity the people who make their investment decision based on such.

Posted by b on August 1, 2008 at 15:19 UTC | Permalink


Mortage Loan Scam:Wallstreet Gets In Line To Get Their Share

Posted by: Uncle $cam | Aug 1 2008 15:54 utc | 1

On at least 3 and perhaps 4 recent Fridays there have been hawkish comments from Israeli officials regarding Iran that sent oil futures up big each time.

Link to today's

This morning's equity drop wasn't on the jobs data, or the ISM at 10am EST. It was on the Israeli comments, which also happened to move oil at the same time. On this, I am very clear - after a week of navigating a difficult market, this one sudden move cost me quite a lot.

Posted by: mats | Aug 1 2008 16:36 utc | 2

Wal-Mart Warns of Democratic Win

August 1, 2008; Page A1

Wal-Mart Stores Inc. is mobilizing its store managers and department supervisors around the country to warn that if Democrats win power in November, they'll likely change federal law to make it easier for workers to unionize companies -- including Wal-Mart.

In recent weeks, thousands of Wal-Mart store managers and department heads have been summoned to mandatory meetings at which the retailer stresses the downside for workers if stores were to be unionized.

Posted by: Uncle $cam | Aug 2 2008 5:56 utc | 3

The Times Herald. “The bill signed Wednesday by President Bush, designed to rescue homeowners facing foreclosure, may do more harm than good, local real estate experts said Thursday.”

“‘It made the extended FHA loan limits permanent, and that’s good, especially in California where homes are more expensive, but a bunch of things were tacked on to the bill that made it not such a great deal,’ said Solano Association of Realtors President Lori Collins. Those permanent limits will be lower than the temporary higher limits that expire in January.”

“‘I have no clients that will be helped by this, and some will be hurt,’ she said. ‘One of the provisions in the bill does away with the down payment assistance programs, so it actually seems to make matters worse.’”

“The ‘tax credit’ of up to $7,500 offered by the bill to first-time homebuyers is actually a no-interest loan, Collins said. ‘So, about two years after taking this credit, homeowners will have to start paying it back, which could add another $500 a year to their property tax bill,’ she said.”

“Whatever provisions the bill contained aimed at saving homeowners facing foreclosure, appear to have vanished from the final version, Collins said.”

Posted by: Peris Troika | Aug 4 2008 5:44 utc | 4

For consideration:-

‘One of the provisions in the bill does away with the down payment assistance programs, so it actually seems to make matters worse.’

Could it not be considered that a "down payment assistance program" is actually something that helps inflate the price of homes? Perhaps the some who will be hurt includes the Realtors, whose stock-in-trade is asset inflation.

Posted by: DM | Aug 4 2008 10:03 utc | 5

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