Inflation-Deflation

As we await the results of today’s 10 yr bond auction to gauge sentiment on inflation, the US$, US government finances and foreign appetite for longer term treasuries, a less scientific take on inflation expectations is looking at the number of Google search results for Inflation and Deflation. Search results for Inflation total 40,500,000 and only 4,660,000 for Deflation. With the average 30 yr mortgage rate rising to 5.57%, the highest since late Nov, the MBA said refi’s fell 11.8% to the lowest level since mid Nov and has fallen 65% from its high of the year. Purchases though rose for a 3rd week, by 1.1% and are at a two month high as tax credits have helped. ABC confidence rose 2 pts to -47, about in line with the average ytd. Interestingly, the Buying Climate (those that say its a good or bad time to buy things) index rose 6 pts to the highest since March ’08 but its still just 9 pts above the all time low in Oct.
II: Bulls 47.7 v 42.5 Bears 23.3 v 25.3
Bulls at the highest level since Jan ’08, bears lowest since Dec ’07

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