United States

The flight to commodities continues a-pace as the US dollar weakened further last night on more poor economic data. The Dow recovered earlier losses.

Municipal bonds became the latest domino to fall in the credit crisis on Friday, and a raft of bad economic and corporate news conspired to send the Dow down 300 points.

More downbeat comments from the Fed, a weak GDP, soaring oil and gold as the greenback slides, and a down day for the Dow.

On February 27, 2007, Wall Street collapsed in response to the Shanghai Surprise – a response that alerted the world to something called “subprime”.

As global economic growth forecasts fall, and commodities indices rise, it would seem the world is facing the crippling spectre of stagflation.

An announced US$15bn buyback by IBM turned Wall Street around in the face of stagflationary data.

The Dow exploded to the upside mid-afternoon when S&P announced bond insurers Ambac and MBIA could both keep their AAA ratings.

The US housing market is facing protracted foreclosure problems in determining just who owns the mortgages in question – a problem which could extend the length and breadth of the housing decline.

The Dow bounced hard on the death on Friday as news broke that Ambac was about to be rescued.

Last night’s Philadelphia economic activity index was the worst reading since just before the 2001 recession.