Market Volatility
Wednesday August 8, 2007
The stock market ended higher again today. It certainly has been a period of volatility lately. It seems that the ethanol market is driving up the cost of corn and ultimately a lot of the food we purchase will go higher in price. There is some concern with the recent heat wave in the Midwest, but the market is traded on a global scale and while one area may have bad weather, another may have good weather and so it goes in the ag business. One sector in the ag business to benefit from the ethanol demand for corn is fertilizer and ag chemical producers.
The down turn in the mortgage business is being felt across other related industries. Furniture and appliances are taking a hit as is outdoor advertising, billboards to be exact. It seems that home builders and the subsidiary industries are not buying as much billboard space.
I have held the belief that the housing boom was over when we started seeing the television shows about how much money average people with little to no contracting or remodeling skills were making by flipping houses. While this genre of TV show made for good entertainment and background noise for Saturday chores such and laundry and ironing, smart money had already, or should have already left the building. Market timing can be a very tricky thing.