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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (35640)	8/21/2005 5:17:59 AM
From: Chispas	Respond to of 116555

$65 OIL AND $3 GAS SHAKE WALL ST., MAIN ST. . TERRY KEENAN, NEW YORK POST August 21, 2005 -- CALL it the Jay Leno factor. When a story makes its way from the financial pages into his TV monologues, it's a fair bet the event is front and center in the minds of most Americans. And so was the case this week, as Leno peppered his nightly routine with a slew of jokes about the sky-high price of gasoline. And it wasn't just Leno. Perhaps it was the slow mid-August news cycle, or the fact that sky-high gasoline prices have unmistakably begun to show up in the official inflation numbers, but this was the week the media floodgates opened as America finally woke up to the reality of $3.00-a-gallon gasoline. It may also be the week when fuel prices went from being merely a nuisance to a potential economic nemesis. That's because as difficult as it is for economists to predict where oil prices are headed, it's been equally difficult to explain why the run-up in crude prices has so far had such little impact on the U.S. economy, interest rates or the stock market. Since early 2004, the bears have been reminding us that nine of the last 10 recessions were triggered by spikes in oil prices, but the global economy has continued to power ahead. The bears have been dead wrong. They've been wrong, in part, because while gasoline price increases have been persistent, they have also been mostly measured. But in recent weeks that moderation has turned to acceleration. Since the end of July, prices at the pump have spiraled higher — up 28 cents on average nationwide. For the first time in recent memory a wide array of retailers — led by Wal-Mart — cited rising gas prices as the main factor in lowering their 2005 projections. Of course, none of this would matter if crude prices made a swift retreat to, say, the mid-$40s in the next few months. But there again, this week offered little hope that a 30 to 40 percent price decline is on the horizon anytime soon. In addition to rising tensions in the Middle East and in Ecuador in recent days, several observers rushed to hike their price targets on oil this week. Goldman Sachs — the biggest trader of energy derivatives — raised its price target on oil this week and warned that the black stuff could stay well above $60 a barrel for years to come, while commodities guru and Fox News contributor Jimmy Rogers predicted $100 a barrel oil down the road. TERRY KEENAN is anchor of Cashin' In, an investing program that appears on Fox News Channel on Saturday mornings at 11:30. E-mail terry.keenan@foxnews.com >>>>>>>>> Registration Required : nypost.com