Sunday, August 14, 2005

What Goes Up...

More joyous business news from Saturday, courtesy of the AP:

"The (stock) market has been watching oil prices obsessively, afraid that higher energy costs could lower consumer spending and increase business expenses. The fear is that higher oil prices, coupled with the Fed's year-plus streak of interest rate hikes, could plunge the economy into a recession.

'The Fed raising interest rates at the same time oil is going up is like pumping the brakes twice,' said Stephen Wood, portfolio strategist at Russell Investment Group. 'If the Fed is raising rates, they will be successful in slowing down the economy. It will happen; it's like the law of gravity.'

Wall Street is beginning to see hints those fears may be realized. Almost two thirds of those surveyed for an AP-AOL poll expect fuel costs will cause them financial hardship in the coming months."
All of which proves that many people in this country and the vast majority of what passes for our political leadership learned absolutely nothing from the energy crisis of the '70s.

So Bushco and the Fed are going to slowly raise interest rates some more and, subsequently, slowly let the air out of the housing bubble, the only sector of this economy which is doing anything except generating wealth for the investor class. Could these people actually do anything right if they tried?

(...and I didn't even say a word about the trade deficit.)

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