Opinion: Oil prices down but why, for how long, and does anyone believe it?

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Oil went down by a total of $10.50 Added to which, Wells Fargo has raised its dividend.

So everything’s fine.

The New York Times:

Gas prices have jumped 35 percent in the last year and were a big reason inflation rose 1.1 percent in June, the government said on Wednesday.

That increase caps a year in which inflation has surged to proportions seen by some as threatening the stability of the American economy. In the last 12 months, the Consumer Price Index has risen 5 percent, the biggest annual jump since May 1991.

“The U.S. economy is becoming weaker and is unable to sustain oil consumption at these prices,” said James Crandell, a commodity analyst at Lehman Brothers. “But it is still too early to call this a tipping point because of some major risks we might face this summer, like hurricanes or geopolitical events.”

So watch the weather reports, and you’ll get roughly the same standard of economic analysis.

The fantastically high quality of information with which the American public is blessed on an hourly basis has been maintained. Things are great, folks, get out there and put a down payment on a can of baked beans. If mealy-mouthed obvious bull was an Olympic event, it’d be a clean sweep.

“Threatening the stability of the US economy” could now be described as a natural state of things. Anyone, or anything, can do it, apparently.

“Sheeeeeit, Billy Bob Incestindex, whadz we a-gonna dew fer laffs?”

“Waaaaal, Daisy May Fundbutt, we’s a-gonna threaten the stability of the US economy. That way we’s a-gonna get another stim-mule-ass, whoever gits in the White House. Whar’s that cute furry futures broker of ours?”

“Out back, a-romancin’ the goat. Don’t seem to do much but.”

I cleaned it up a bit.

Anyone see anything actually being done?

Anyone overwhelmed by the comments, avalanches of ideas, and deep personal commitments from either side of politics, so far?

It’s rather hard to describe this quote:

The Consumer Price Index report, released Wednesday, reinforces what many economists, including those at the Fed, have warned about for months: Americans are being forced to pay significantly higher prices, even as the job market weakens and big employers announce plans to lay off thousands of workers.

As information, it’s also something the public has known for months. So as the public goes broke, someone gets around to telling them about it.

As an indication of the apparent perceived level of intelligence of the public, it's quite revealing.

The impression I have is that the the financial media's overall view of the public is that it honestly thinks that anybody able to read and write wouldn't understand how tough this is likely to get.

Standard policy: “Tell people anything they already know, add some names to make it sound good, and call it information.”

NYT redeems itself with this inclusion:

“There’s not enough lipstick to put on this pig,” said Richard Moody, an economist at the real estate firm Mission Residential. “No matter how one slices and dices the C.P.I. data, the bottom line is that U.S. workers are falling farther and farther behind.”

The slicing and dicing is trying to find some meat on a very parched old bit of bacon, in this case. People already know what it’s doing to them.

Even the top line spinners are apparently having trouble coming up with something other than “Godawful”.

Oil, meanwhile, the completely unnecessary problem that should have been solved in the 70s, is looking forward to increased demand from China and the rest of the world to keep its prices up. It looks like $150 a barrel is at least some sort of barrier, but people thought $100 was a barrier, too.

One thing for sure, though:

If the argument really is that “The U.S. economy is becoming weaker and is unable to sustain oil consumption at these prices”, as Crandell says, a limit has been reached.

It’s the first time I can remember the US ever saying it couldn’t afford something, however indirectly.