More Troubles in Greece

Today looks like it’s going to be a relief rally for stocks. Today’s CPI report showed that inflation was flat last month. Year-over-year inflation is running at 2.3%. The core rate, which excludes food and energy, rose by 0.2%.

Looking at the details of the report, the number that jumps out is that gasoline prices dropped by 2.6% last month. The average price for gasoline has dropped for six straight weeks. It’s now down 20 cents per gallon from a year ago. This is obviously good news for consumers, and it helps the economy as well.

Still, the economy doesn’t seem to be moving very quickly. The retail sales report this morning showed a 0.1% increase last month, which is what analysts were expecting.

The latest attempt in Greece to form a government has failed. This is becoming a pattern and the news is not being well received by the European markets. I think they need to call elections again soon. The problem is that a new election will probably be good for the far left-wing parties, and that will almost certainly lead to Greece departing the euro. The euro is now worth less than $1.28.

Posted by on May 15th, 2012 at 9:22 am


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