Economics Update

So, we saw a
0.4% increase in the consumer price index in February, which is the highest rate since July, even if that is just a 5% rate.

Truth be told, I'm not sure if this is good news, reduced possibility of inflation, or a sign that the dollars that are flooding our economy are creating an inflation spiral.

In either case, we have another indicator that the real estate market is no where near a turn around, the bump in February building permits not withstandint: the Architecture Billings Index remains near a record low, and this is a leading indicator.

The spike in jump in mortgage applications does not really mean much, as it is primarily refi activity driven by low mortgage rates.

Internationally, we have a number of developments:

• Foreign purchases of US debt fell sharplyin January
• The Bank of Japan kept its benchmark rate unchanged at 0.1% (so the US isn't the only central rate running up against the zero bond) and is buying bonds (printing money)
• The jobless rate in the UK rose above 2 million, this is a 12 year high in unemploy, and the delta of 138,400, which is the highest number since records started being kept in 1971.

In energy, oil fell on the pessimistic report from the Federal reserve despite assurances of the House of Saud that OPEC will really follow the quota this time....really...for sure. (I don't believe it either)

Finally, the news that the Fed is printing about a trillion more dollars pushed the dollar down.