The Dow took another hit yesterday and drifts back towards 10,000. But presidents don’t get re-elected when the Dow is falling…or when the price of oil is rising.
Of course, even presidents cannot tell Mr. Market what to do. But in the very short run, they have powerful friends who can bribe him. President Bush is surely on the phone with his friends on Wall Street and in Saudi Arabia. What can they do? We don’t know, but we will find out.
“In the spring,” writes a reader, “I saw the United States was buying millions of barrels of oil a day to top off our Strategic Petroleum Reserve salt caves in the South. I felt it was a major factor in the rise of the cost of oil. At the time, I said it would be Bush-like to start selling oil from the Strategic Petroleum Reserve just before the election to drive the prices down and look good for the electorate.
“The thought was that he’ll inflate the cost of oil just to bring the price down before the election. Well, here was the CBS MarketWatch release as of 10:16 this morning!
“’10:16 a.m., 09/23/04, U.S. ENERGY DEPT. REVIEWING POSSIBLE SPR OIL RELEASE…'”
“What do these guys do?” asks Addison. The federal office set up to oversee the giant mortgage lenders Fannie Mae and Freddie Mac and has an annual budget of $38 million dollars and 180 full-time bureaucrats on the payroll. Yet over the past decade or so, both firms have managed to concoct phony earning statements with relative impunity.
“They ought to change ‘Oversight’ in Office of Federal Housing Enterprise Oversight…to ‘Overlook.’ Then maybe they could justify that massive budget.”
“Who in this year’s election,” Mr. Wiggin continues, “promises to cut out federal fat like this? Michael Badnarik [the Libertarian candidate], possibly. Too bad ‘Libertarian Party’ is such an oxymoron.”
[Ed note. Watch this space for your Election Year Emergency Survival Kit…coming early next week.]
We quoted the phrase to Elizabeth as she was trying to improve us. We were on our way to Germany last weekend. Scarcely had we taken our seats when she had a book of German grammar and was quizzing us. By the time we reached the border, she was sprechensieing Deutsch…while yours truly was still wondering what Weltanschauung meant!
Now, here we are in Venice…
“Buon giorno,” she said to the desk clerk. That was the last word we recognized…
Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century.