Second ripple of economy

The first time I tried to put my prediction of the economy in words was in February when I said that March should see the worst of it and indeed we did. Now that we have safely survived that moment, I have to hammer in an even worse prediction. September will actually be the worst. Why? Because the oil price increased by 50% from February till today. The slow ripple effect means that we won’t see this reported in companies financial until the 3rd quarter report. i.e September. At which point we’ll see some panic.

It is wrong to exclude volatile food and energy inflation out of the inflation data they use to see the health of the economy. After paying mortgages, food and energy combined occupies about 1/3 of my spending and I believe it is about the same situation in every other household. How come business reports simply take it out of the equation to measure inflation?

Because of the above mentioned point, economy deterioration will continue which will force Bank of America (the only bank that hasn’t cut dividend) to cut its near 9% dividend payout. At which point, I will buy that stock.

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