The Cake is a Lie

Wall street seems to think that our economy is recovering. I don't get it. Unemployment is hovering around 10%, and there's no sign of that changing in the near future. As I watch the numbers though, here's what the pundits seem to overlook. The price of crude oil is walking in lock step with the Dow. When stocks advance, a barrel of oil goes up accordingly. When stocks drop, so does crude. This formula precludes a solid recovery. Our economy won't seem to tolerate gas prices much higher than $3.00 per gallon. But based on what I've seen in oil vs. stock prices, investors expect the price of gas to rise in lock step with an economic recovery. It won't work. The economy cannot recover to pre-recession levels with a high cost of fuel.