No Ceiling to This Market

There is no ceiling to this market. Yesterday's move was attributed to short covering and hedge fund buying to keep pace with the market. Specifically, action was centered around retail and bank shares from what we can gather. We did find one very great piece of news in the headlines. The federal deficit continues to close the gap and looks better than expected:

The federal deficit was sharply narrower through the first nine months of this budget year as the growth in revenue continues to outpace spending growth. The Treasury Department reported that the government ran a surplus of $27.48 billion in June, up 34% from the $20.52 billion surplus recorded in June 2006. The government normally runs a surplus in June, a month when taxpayers and corporations make quarterly payments to the Internal Revenue Service. The total deficit through the first nine months of the budget year, which began Oct. 1, is $120.97 billion, down 41% from the same period a year ago, when the deficit totaled $206.5 billion. - Associated Press

In the past we where concerned about “The Crowding Out Effect“. This is encouraging news, as it is one less item to potentially push rates up and further break the economy.

We look forward to [Friday's] market action to see if there is any follow through. Additionally, we thought the analysis from Bespoke was very interesting (click here)

Comments

[brynaw:]

<i>The total deficit through the first nine months of the budget year, which began Oct. 1, is $120.97 billion, down 41% from the same period a year ago, when the deficit totaled $206.5 billion</i>

Let me get this straight: on an annualized basis, the government's still running a $121 billion deficit (to add on top of our existing ~$8.9 Trillion (with e "T") total National Debt. And this is "good news" to be reported as a "surplus"?

Is it any wonder why most ordinary households treat debt as synonymous with wealth, when our fearless leaders run our national finances this way?

2007 Jul 16 02:38 PM

[Mtn153:]

Few people believe these figures anymore. With the landslide of lies that have come from this administration since 2000, one is reminded of the story of the "Little boy who cried wolf afgain and again". As Lincoln and P.T. Barnum where reported to have said, "You can fool all of the people some of the time, and some of the people all of the time, but you can never fool all of the people all of the time". Few believe anymore the rubbish that comes from this administration. That said, let's hope that Bushy Junior doesn't end up being the Hoover of this century. While they have, through their insane policies, put the house of cards are in place, let's hope that the real Americans can keep this leaking ship afloat until this bunch of morons are gone!

2007 Jul 16 05:30 PM

[Hankhawk:]

After "this bunch of morons are gone," another bunch of mornons will take over, whether it's
Dem's or Rep's -- won't make any difference. Our politicians and administrators are all in the
same bed together -- I don't see a single one that will make a difference. We'v entered the economic
"black hole" and don't see a way out.

2007 Jul 17 08:18 AM