Interest rates vs inflation.....

There is a huge question that is brewing behind the scenes, when do we raise interest rates? Some analysts are saying we should raise them now, to avoid inflation spiralling out of control. However should the rates be raised now, we are going to throw cold water on the economic recovery, and risk the economy falling back into the recession. However should the FED wait until the economy is stronger, we risk losing buying power to inflation.

I personally think that we need to wait, as raising interest rates now would break the housing market, and cause major havoc on the financial industry which the FED has been working overtime to save. While inflation could be painful in the future, by being preemptive we are hurting the present.

- Arthur Smelyansky

Overblown economical hype

It seems like over the last few days investors have lost their minds. the SP500 is up more then 7% in a week, on mediocre economic news that point to the fact that the recession is not as bad as previously expected. Thank god for this mornings Bernanke testimony, to pour some cold water on the lemings.
Of note the SP500 pushed past the 950 mark for about an hour before getting slammed down again. Analysts are paying close attention to this number, as most predict that this is where the summer time rally will stall. There is a lot of money tied to the options around this number, so it will be very interesting to see just who will win this battle. A piece of advice to the average investor, sometimes its wise to pass.


- Arthur Smelyansky