02-16-2008, 03:19 PM
February 16th, 2008
On an industrial production note, the CRB Index (this is a collection of basic commodities,i.e., metals and agriculturals), has been moving up since last April and recently has been in an extremely strong rally. The index has moved up over thirty-six per cent since April of last year so these costs are now being manifested on the shelves and being passed to the consumer. Hence, in conjunction with oil costs, the 'sticker shock' we're seeing.
Crude is basically riding at just under one-hundred dollars and the Dow, S&P and Nasdaq are in a strong retraction at seventeen per cent below the highs struck this summer while consolidating sideways to down as they test that support. If this complex breaks current support, meaning any appreciable close beneath the current consolidation, then it's quite possible the complex will contract to a full thirty-five per cent from summer highs.
Assuming such a market event occured sometime between now and perhaps the twenty-fifth or twenty-sixth of this month [February] - then we will, in all likelyhood, experience a more pronounced inflation starting at the pumps and shelves ... with housing costs, both rents and construction becomming even more critical. I would also expect in this scenario that Helco's costs would move even higher.
JayJay
JayJay