MARKET RECAP

All the indices finished in the red. In all it was a rather lackadaisical day in the markets despite or perhaps due to option expiration. The last few days have seen low volume which I expect will change next week.

Here are a few of my thoughts for the week.

• The PPI and CPI numbers have confirmed that inflation is still a problem. This limits the ability of the Fed to cut rates anytime soon.
• The subprime blow up is increasing pressure on Bernanke to cut rates. With inflation still being a problem, Ben is in one hell of a tight spot.
• The housing market is nowhere close to bottoming with a record 4 million + homes on the market. Add this to tightening credit and decreased demand and you figure it will only get worse.
• Treasury Secretary Paulsons remarks about subprime being contained don't inspire any confidence .