Daily Investment Interpretations
August 29, 2008
Hurricane Gustav is growing ever larger, with tropical storm force winds having
escalated from a 50-mile radius a couple of days ago to a 160-mile radius
tonight. It will probably become a Category Three hurricane on the Saffir-Simpson
Scale before it hits western Cuba tomorrow night. After that, it's all warm,
open water until Gustav collides with the Louisiana coast Monday night.
Surprisingly, the price of oil fell slightly today to $115.46 a barrel. But the
Nasdaq plummeted 44.12 points to 2,367.42, the Dow dipped 171.65 points to
11,543.55, and the S&P 500 relinquished 17.65 points to close at 1,282.83.
The VIX rose 1.22 points to close at 20.65.
Today's decline in equities is being attributed to (justifiably, in my opinion) uncertainties over what Gustav will do to Gulf oil production, as well as Dell's profits dropping 17%, and a decline in personal incomes and consumer spending.
Brimelow on danger of real interest rates.