September 15, 2006


Wall Street Rises on CPI Report (Joe Bel Bruno, 9/15/06, AP)

Wall Street surged Friday after a key inflation report showed consumer prices rose in line with expectations last month, raising investors' confidence that the Federal Reserve will keep interest rates unchanged.

The Labor Department reported consumer inflation slowed sharply from July, helped by a slower housing market and pullback in energy prices. Overall consumer prices and costs, excluding food and energy, rose 0.2 percent in August. [...]

"The news from this report shows that overall inflation is decelerating, and that's going to increase the markets confidence the Fed will leave rates unchanged next week," said Alan Gayle, senior investment strategist with Trusco Capital Management. "Stocks are going to respond strongly to something like this."

Oil Prices Fall After Natural-Gas Drop (AP, 9/15/06)
Crude-oil prices eased below $63 a barrel Friday after natural gas prices plunged to a two-year low, and supply concerns eased after Nigerian oil workers prematurely ended a strike in Africa's largest producer.

OPEC, meanwhile, sharply lowered its expectations for demand for its crude, increasing the prospect that the group may reduce its production quotas later this year. In its monthly oil market report, the Organization of Petroleum Exporting Countries cut expected need for its oil in the last three months of this year by 320,000 barrels a day from its month-ago estimate, to 28.86 million barrels per day.

Oil demand weaker than expected in first half of 2006: OPEC (AFP, Sep 15, 2006)
World oil demand growth was weaker than expected in the first half of 2006, OPEC has said.

"World oil demand growth in 2006 has been revised down by 0.1 million barrels per day (bpd) since the last MOMR (OPEC monthly report) to stand at 1.2 million bpd, as recent data shows weaker-than-expected demand in the first half of the year," it said in its report for September on world oil markets.

Gasoline demand in the United States "grew by only 0.7 percent, well below the annual average of 1.6 percent despite the stabilization of gasoline prices," the Organization of Petroleum Exporting Countries said.

Sadly, Ray Fair doesn't project mid-terms, but there can't be many instances where a party has lost control of both houses of Congress in economic times as robust as these.

Consumer confidence skyrockets (JEANNINE AVERSA, 9/15/06, AP)

Consumer confidence zoomed to a seven-month high as lower gasoline prices made people feel a lot better about the current economic climate and their own financial standing.

The RBC Cash Index, based on the results of the international polling firm Ipsos, showed confidence rebounding to 93.7 in early September.

That marked an improvement from August, when consumer confidence sank to a three-month low of 74.8. At that time, the toll of soaring energy prices was blamed for weighing on consumers' psyches. The recent drop in energy prices, however, provided people with some relief and propelled confidence to its best reading since February.

"The drop in pump prices is very visible to consumers and seems to have a huge impact," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group. "Consumers seem to view gasoline prices as a barometer to their overall well being."

The entire drop in W's popularity ratings was a function of high gas prices--so what do Democrats do as those prices drop another 50 cents a gallon by election day?

Posted by Orrin Judd at September 15, 2006 11:46 AM

Um, angrily scream that it's all a big, Bush-Rovian conspiracy?

Posted by: John Resnick at September 15, 2006 1:31 PM


As informative as you are, the word "entire" in your post adds another "poly" to "Pollyannish."

Does a 5th column media, an unpopular war, and an inarticulate leader have anything to do with the poll numbers? A spendthrift and spineless party?

Regardless, one hopes you are right.

Posted by: Bruno at September 15, 2006 2:35 PM



Posted by: oj at September 15, 2006 2:46 PM

Yesterday's Rasmussen poll puts W. at 48%.

Posted by: obc at September 15, 2006 3:55 PM

Maverick's not helping the cause, either.

Good, I hope he tanks his presidential ambitions.

Posted by: Sandy P at September 15, 2006 4:07 PM

High gasoline prices hurt, the main reason for Bush's unpopularity is the impression that he is not the man who can bring victory in Iraq. The Democrats major problem is that they have no national leader that people would trust to win and thereby end the war.

But Congress does not run foreign policy or conduct the war. The Democrats will still pick up seats in both houses. Control of the House will be close.

Posted by: Chris Durnell at September 15, 2006 4:16 PM

No one cares about Iraq. There are too few Americans fighting and dying there with no effect on the domestic economy for it to matter to voters.

Posted by: oj at September 15, 2006 4:23 PM


Maybe OJ should have a pool re: Senate and House counts.

Despite my view that this is all more than gas prices, I'm being aggressive and saying Rs will gain both the House & Senate.

House, Rs gain 2-3
Senate, Rs gain 1-2

Posted by: Bruno at September 15, 2006 4:24 PM


The GOP is going to add seats in the Senate. The House will be a wash. If the trend were towards the Dems, the news about Ney's indictment would have been trumpeted a lot louder. Perhaps Jefferson's day is coming soon.

Posted by: jim hamlen at September 15, 2006 4:41 PM