Weekend Update: Weak Euro Edition
Sunday, August 17, 2008
The Euro is now 8% off of its high and the Pound has now had ten consecutive down days. It is a bit misleading to call today's update the "Weak Euro Edition" since, despite the recent pullback, the Dollar is still incredibly weak relative to European currencies. Stocks were mixed for the week, there could be an opportunity for further advance; some technicians see the indexes approaching key resistance points. We will see what the coming week holds...
Greenback Consulting Portfolio
Holdings: cash
Prior week trades: none
Top Three News Stories
1. Wage Slaves Hold Few Bargaining Chips - despite record inflation, the Federal Reserve is banking on a weak labor market to keep laborers from demanding higher wages. What does this mean for America? For the average Joe, it means he probably will have considerably less spending power in the near future than he had in the past; not the greatest outcome... On the other hand, the economy as a whole will probably be able to skirt the 1970s style inflation that the doomsayers have been clamoring about for a while now.
2. Unpredictably Irrational - there have been a few interesting developments in the past week in the auto world. First, Bloomberg reports that for the first time since 1982, fuel spending has exceeded auto spending in the United States. This, theoretically, would lead me to believe that Americans would be cheaper vehicles, more efficient vehicles, or fewer vehicles altogether. However, USA Today notes that consumers are changing their car buying habits very little if at all! What gives here? Are we really that short-sighted and confused? Or are we just incredibly bad at predicting what could happen again in the future?
3. Solar For the Little Guy - in a small win for the green energy campaign, Ikea is investing $75 in solar panel companies that will supply the chain with consumer panels that individuals can install on their homes. Ikea may be on to something... shoppers in the market for a cheap couch could probably be sold on the idea that solar panels would save them money as commodities like electricity continue to get increasingly expensive. For investors, this is just another example of how popular green energy has become amongst those with big money.
Posted by Rob Pitingolo 10:00 PM
