Oil and gold are at record prices. The dollar is at a record low against major currencies. This morning at 5:30AM PST the Commerce Department announced that Retail Sales plunged 0.6 percent in February: consumers are worried. Economists were expecting +0.2% after a +0.4 in January, first reported as a 0.3 percent gain. Excluding autos, sales fell 0.2 percent in February, a far weaker reading than the 0.2 percent gain economists had forecast. What aren’t people buying? Consumers cut back on autos, furniture, electronics, building materials, and food and gasoline. No one should be too surprised.

U.S. import prices rose by a less-than-expected 0.2 percent in February as petroleum prices dipped while export prices increased by a surprisingly strong 0.9 percent as food prices soared – but that is “old” news. Import prices had been expected to rise 0.8 percent, and analysts had forecast a 0.6 percent rise in export prices, down from a 1.2 percent rise in January. Petroleum import prices fell 1.5 percent in February, for the second decline in the past three months. However, they were up 60.9 percent over the past 12 months. Non-petroleum import prices increased 0.6 percent in February and have increased 4.5% over the past year, the most in 13 years. The year-over-year rise in import prices was 13.6%.

So what are rates doing after this? Remember yesterday, when treasuries & mortgage securities rallied (improved) on doubts that the Fed’s move on Tuesday would ease the credit crunch and curtail further losses by financial firms? Well, today, so far, we’re giving most of it back. Although the 10-yr is down to 3.41%, mortgage prices are worse by .250-.375 in price. Two steps forward, one step back for mortgage prices in the last two days.

Why did I sell all of my Thornburg stock the day before yesterday – which I was going to use for my kid’s college education? The company’s shares rallied from less than $1 per share to over $3 per share yesterday! Most are hoping for them to rise from the ashes again and start funding loans next week.

The chief executive of Freddie Mac, Dick Syron, believes that the housing market will get worse before it gets better. He said the decline in home prices nationwide is only “one-third” of the way done, and expects home prices nationwide will likely decrease 15% rather than the 10% originally estimated by FHLMC. And the East & West coasts will be hit harder than 15%, he said.

Gallagher opened the morning newspaper and was dumbfounded to read in the obituary column that he had died. He quickly phoned his best friend, Finney.

“Did you see the paper?” asked Gallagher. “They say I died!!”

“Yes, I saw it!” replied Finney. “Where are ye callin’ from?”

Rob