Many WWII vets, hung over from celebrating VE Day yesterday (Victory in Europe, May 8th, 1945) woke up this morning to find oil is near $126/barrel. Think gas is expensive? On a per-gallon basis Diet Snapple is $10.32 per gallon, Lipton Ice Tea is $9.52 per gallon, Gatorade $10.17 per gallon, Brake Fluid $33.60 per gallon, Vick’s Nyquil $178.13 per gallon, Pepto Bismol $123.20 per gallon, Scope $84.48 per gallon, and Evian water is $21.19 per gallon! (Evian spelled backwards is “naïve”.) So, the next time you’re at the pump, be glad your car doesn’t run on Scope, Pepto Bismol, Nyquil or Evian water!
Speaking of spending money, do you ever wonder what goes into our Consumer Price Index (CPI) calculation every month? Now you can see all the CPI details (link to NY Times).
A UN official says the World Food Program is suspending cyclone aid to Myanmar because its government seized supplies flown into the country. Some critics are saying the United States should not be in such a hurry to send aid when there are parts of Louisiana & Mississippi, and Thailand, which still have extensive damage from their disasters years ago and could use assistance.
How are builders, and loan agents who cater to them, holding up? Not well. Scott Eckstein, president of the Illinois Home Builders Association, told the House Small Business Subcommittee on Finance and Tax that, “There is deep concern that the dislocations in the financing markets will increase the depth and length of the housing downturn.” Builders are battling tighter mortgage underwriting, harder-to-find loans for land acquisition, development, and construction (AD&C). Home buyers to obtain financing to purchase new homes. Is anyone surprised by this?
This morning it was reported that the U.S. trade deficit narrowed more than expected in March due to the value of imports dropping, in spite of high oil prices. The trade gap shrank to $58.2 billion in March, down 5.7% from a revised estimate of $61.7 billion in February. The $6.1 billion drop in the value of imports to $206.7 billion was the biggest on record and the biggest percentage drop since December 2001. In a sign the current U.S. economic slowdown is taking a toll on consumer and business demand, major import categories like autos and auto parts, industrial supplies and materials, and consumer goods were all down. The market likes the news, and is continuing the improvement that we saw yesterday. The 10-yr is down into the mid 3.70’s, and mortgage prices are better by roughly .125 in price.