Does Market Resilience Indicate Most Sellers Have Left the Market?

Albert Einstein defined insanity as doing the same thing over and over again expecting different results and I think that applies here.

The economic news was again nearly uniformly negative. The consumer price index (CPI) had the largest one month drop since 1932 although core prices (excluding food and energy) were flat. Although this is surely disconcerting to the deflation scaremongers, it is hard for me to summon a sense of foreboding over falling consumer prices. Housing starts and building permits were down again with starts hitting an all time low.

The good news is that starts are running about 120,000 less than the annual sales rate so inventories should continue to drop. Jobless claims fell slightly, but are still running very high; the 4 week moving average of new claims is now at 543,750.

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