Interest Rates & Dollar Drop
Research for Online Investors

by John Dalt

6/11/09

Ken Lewis, CEO of Bank of America (BAC) testified before the House Committee on Oversight and Reform this morning.  I hoped for fireworks.  None, except Rep. Kocinich of Ohio grandstanding, as he played junior prosecutor.

The Treasury auction sold $11 billion of 30-year bonds at 4.72%  This was a better outcome than many anticipated.  Oddly, the dollar sold off.  Ten-year treasury yields pushed down to 3.85%  This news surprised the market.  The ten-year sale yesterday brought higher interest rates and sentiment was that 30-year notes would go higher.

SwingTrader subscribers closed out TBT today.  Twenty days work for an 18.4% gain, not bad if you can get it.  Join us in the SwingTrader!

The market pushed to a high since Nov 5, 2008 reaching 956. We look to move to 1000 on the SP500  Everyone is tentative to buy, because of the expectation of a pullback.  It seems advances are met with profit taking, but every dip is met with buying.  We are in a range bound market, trading back and forth. There is some bit of news that will trigger a sell off, we just don’t know what it is or where it will come from.  The best to do now, keep your stops tight.

The decline in crude oil prices that began in mid-2008 was historic – plunging over $90 per barrel in just eight months. Over the past four months, however, crude oil prices have spiked up nearly $30 per barrel. Today’s chart provides some perspective on the historic decline and recent spike with a long-term view of inflation-adjusted West Texas Intermediate Crude. Today's chart illustrates that most oil price spikes were a result of Middle East crises and often preceded or coincided with a US recession. It is also interesting to note that the recent spike in oil prices has brought the price of oil back to a relatively high level – a level that was surpassed only during the major price spikes of 1979-1982 and 2005-2008

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From B.W.
As a Pastor, the truth can be a difficult pill to swallow.  I find your information enlightening and entertaining.

John Dalt:
That was kind!

A short story from B.A.

It is the month of August, on the shores of the Black Sea.

I t is raining, and the little town looks very deserted. It is
tough times, everybody is in debt, and everybody lives on credit.

A  rich tourist comes to town.

H e enters the only hotel, lays a 100 Euro note on the reception counter, and goes to inspect the rooms upstairs in order to pick one.

T he hotel proprietor takes the 100 Euro note and runs to pay his debt to the butcher.

T he Butcher takes the 100 Euro note, and runs to pay his debt to the pig grower.

T he pig grower takes the 100 Euro note, and runs to pay his debt to the supplier of his feed and fuel.

T he supplier of feed and fuel takes the 100 Euro note and runs to pay his debt to the town’s prostitute that in these hard times, gave her services on credit.

T he hooker runs to the hotel, and pays off her debt with the 100 Euro note to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.

T he hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything.

At that moment, the rich tourist comes down after inspecting
the rooms, and takes his 100 Euro note, after saying that he did not like any of the rooms, and leaves town.

N o one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism. And that, ladies and gentlemen, is how the United States Government is doing business today.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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