Leading Rich

The week started off with week earnings from Nordstrom, reporting that they are in for a tough 2008, followed by a report by the National Association of Realtors that existing home sales slipped in January 2008. Sales fell .4 percent to 4.89 million units in January 2008, 23.4 percent below January 2007 6.44 million-units. On a positive note, homes are selling but here are some highlights from the latest report:

• Home prices down nearly 4.6% from a year ago January levels
• Housing inventory rose 5.5 percent at the end of January to 4.19 million homes
• 10.3 month supply of homes available on the market
• Existing condominium and co-op sales fell 6.5 percent in January 2007

Plain and simple - Homes are selling, prices are steadily declining, on average it will take 10.3 months to sell your home and condo’s have the biggest impact from a sales perspective.

Source: National Associations of Realtors

Oil Over $100

This should not be a surprise, but Oil hit $103 today sending the markets into a tailspin. Although the market did not fall because of higher oil prices, the bears were looking at the weak economic numbers coming out all week and news of consumer inflation.

Stagflation

Federal Reserve Chief Ben Bernanke spoke to Congress this week about the state of the economy and that the fed is ready to lower rates yet again to hold back the possibility of a recession and overlook the threat of inflation. This scenario is an economists worst nightmare called which we started reporting on in last weeks review - Stagflation. Stagflation is defined as a negative economic climate where inflation is rampant. This is what we saw in the 70’s and early 80’s.

Report from Fox Business News

Fed Warns Congress About Bank FailuresBen Bernanke provided even more riveting testimony to congress stating that he is concerned that there are likely to be many banks running into insolvency issues. As he stated to Congress on Thursday, “There will probably be some bank failures.” What does this mean for you, are we back to the days of the Savings and Loan Crisis of the 80’s? Take your money out of the banks and put it under your mattress?No! The FDIC came out to defend the banking system with a report stating there are known issues, as reported by MarketWatch, but they can be managed.

Congress Attacks Ben Bernanke

Report from Fox Business News - Your Wold Cavuto