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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Stocks slightly off following wholesale inflation report

Wall Street opened slightly off, following data released this morning that showed wholesale inflation edged up less than expected.

In the first 20 minutes of trading, the Dow is just underwater.

The broader S&P 500 is down nearly two-tenths of 1 percent and the tech-heavy Nasdaq is down about the same amount as the Dow.

Wholesale inflation, as measured by the producer price index, rose 0.3 percent in October, the Labor Department said, shy of an expected rise of 0.5 percent. It fell 0.6 percent last month.

But if you strip out volatile food and energy costs, wholesale inflation actually dropped 0.6 percent last month, meaning disinflation is underway. Disinflation: a slowing of inflation. Not so bad. If it leads to deflation, however, that's trouble, because that means tumbling prices and wages.

Deflation hawks/worrywarts would like a small, healthy dose of inflation.

-- Frank Ahrens
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By Frank Ahrens  |  November 17, 2009; 9:59 AM ET
Categories:  The Ticker  | Tags: Dow Jones, nasdaq, s&p 500  
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Glass Steagall was repealed in 1999 and now in the vaults of the major banks there are 2 trillion dollars of worthless pieces of paper.

The government refuses to bring back Glass Steagall and restore a sound banking system.

The business plan of American companies to send American jobs overseas began in 2002 and over 2 millions jobs have been lost in a country with a shortage of 9 million jobs. Every job in America that involves sitting in an office and using a computer and a telephone is a candidate for being sent overseas.

No sound banking system and the prospect of growing large amounts of unemployment.

And the government main concern is inflation.

At what point does the government recognize that the economy can not recover with an unsound banking system and a nation where we now export American jobs.

The only inflation this country has to worry about is super inflation from a bankrupt economy.

Fake regulation will not paper over an unsound banking system and one day job summits at the White House will not address the problem of exporting American jobs.

The reality is that the Dow should be at 6000 and descending based on the flawed fundamentals of the American economy.

Posted by: bsallamack | November 17, 2009 1:05 PM | Report abuse

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