Oil WIll KO Obama (Updated!!)

I told you ( in May of 2009, no less) that 10% unemployment and $4 gas would send Obama into the history books as a one term disaster a la Jimmy Carter. I nailed 10% unemployment with one hand tied behind my back; $4 gas has been more elusive, but it's coming. This segment of Sir Lawrence's show gives you the goods. It's partly Mr. Bernanke's fault but Dear Leader's clueless drilling moratorium, which has yet to be felt in the economy - the oil market operates with a 6-12 month lag - sealed the deal. It's coming. Sir Lawrence is right, $140 crude in July of 2008 gets little blame for the subsequent meltdown, but it was decisive in my opinion. Obama is staggering around the ring right now, and oil will deliver the knockout blow. Unfortunately you and me will feel it too.

UPDATE: Peter Beinart - who, while not very compelling a thinker/writer, is no run-of-the-mill lefty twit - thinks Obama is a lock for a second term. He gives three reasons: 1) the base will rally, 2) the economy will rebound, 3) the GOP will screw it up. Only one of these is at all convincing to me and that is #3. Yes the GOP could screw it up, although one thing is clear to me, if they screw it up they will screw it up less than last time. So will the voters reject a GOP that is learning its lessons, albeit imperfectly, for four more years of Obama? Maybe, but doubtful. As to #1, I can't (nor would I want) to crawl inside the head of anyone typical of Obama's "base" but I have posited that the Obama coalition is dead. Fine, the base may rally but Obama needed a coalition last time and he'll need it again, but it is gone forever. "The base" isn't enough. (Oh, and let's not forget the other side's "base", if you think the Tea Party crowd will be satisfied with what they achieve in November, you've got another thing coming. Small-gov conservatives, libertarians, and Tea Partiers all understand that this is a two cycle fight at a minimum and that the really important pink slip that they need to issue is...Obama's.) Finally, IMHO the economy will stumble along, but even if the economy does do OK it won't feel like it to the average voter - lackluster growth won't create enough jobs to absorb workforce growth, $4 gas will dampen consumer spending, ObamaCare fallout will continue to plague businesses, and we will continue to look like laggards relative to the rest of the world. Furthermore, and this is a point that Beinart completely ignores, the world will look a mess and/or Obama's foreign policy ineptitude will shine through in a particularly visible and ugly way. The world's bad guys have already sized Obama up and will do what they want, and the world's good guys realize that Obama doesn't much care or even think about things in terms of good/bad, so no net positive on the global scene is forthcoming.

My take is that Obama's troubles are only beginning. One of the structural flaws that he had coming in to his Presidency was a shallow political base. As a newby, he didn't have the deep networks and connections to draw the top talent to his side; he only had the ability to draw party loyalists who do what they do for the party, not for him. As he proves damaging to the party, these folks will not sign up to resurrect the great Obama experiment, which is a major problem for him. He is going to need top class talent to resurrect his presidency. Where is he going to find these people? Where are the All-stars going to come from? Answer: He's not gonna get them. Is he really going to turn things around dramatically in 20 months with a bunch of B-teamers? Doubtful.

Think I'm wrong? Let me remind you what I said just over a year ago: "Mark these words, we will see at least one high profile cabinet resignation in the next six months and as many as three in the next 18 months as some determine that it is not good for their careers to be associated with this administration (Gates excluded)." We've gotten more than three in thirteen months. Trust Donny B. on this one. Beinart's got nothing on me.

Tanned, Rested and Ready

Sorry for the light blogging folks, was away with the Baseball clan for a little R&R in the tropics. There has been much I've wanted to blog on, but frankly when you are ensconced in a lounge chair on the beach with a mango and dark rum smoothie...it's low on the list. Couple things though fitting with my themes in the past...


- add yet another CEO who thinks Obama is clueless and is not afraid to say so, things are that bad. (bonus: Jack Welch calls it all a charade, like, well, I did)

- my $4 gas prediction is now vindicated and I may ultimately look like a piker for only predicting $4 as the CW is now talking about $5 gas. Just remember folks, I said in May of 2009 that Obama would have 10% unemployment and $4 gas to contend with as his bid for re-election got going. I am now officially a political forecasting genius. With that and all the other examples of abominable leadership and disastrous policy tracks that Obama has inflicted it is hard to see how he achieves re-election. That said, I was 200% convinced back in 2007 that the American people who never elect such a bozo, and yet we did. So frankly on these matters, I have some moments of doubt about my instincts. Still, the market though is confirming me for the time being. It's rise has been directly related to Obama's decline in approval ratings and increasing impotence politically. Current market sentiment is telling me that the market is cautiously optimistic that Obama will have a very difficult time of it in his re-election bid.

- people are now getting hip to what our impotent response to piracy says about us. I was on to the whole piracy thing before it was cool.

- every day that the union-led protest goes on in Wisconsin is a day worth reprising this post.

- looking around the world you could be forgiven for thinking that things are truly coming apart at the seems. Remember folks, American weakness begets chaos, and in direct proportion too. So the extreme state of discord around the world is telling us exactly how weak and pathetic we are at this point.

Good to be back.

Dammit Lady, I'm Trying to Raise $4 Billion Here!

Too funny. Bloomberg carried this story a few days ago, about how Columbia University President Lee Bollinger is embarking on a $4 billion fundraising drive. I can just picture Bollinger's "aw shit" reaction when news got out that the dean of the International Affairs school has invited Iranian apocalyptic whackadoo Mahmoud Ahmadinejad to speak at the university. Apparently SIPA Dean Lisa Anderson got a little jealous that her competitor, the Kennedy School at Harvard, was getting all the press. Clearly she thought, 'we're just as good as Harvard, we will get our own women-beating, gay-bashing, terrorist-sponsoring theocratic dictator to speak!' I'm sure Dean Anderson got a call from Bollinger post haste to the effect "you flumin' idiot, I'm trying to raise $4 billion with a b here! You're killing me!"

A little side color for readers that may be unfamiliar with the dynamics up at Columbia (and why would you be my globally-minded readers, parochial concern that it is?). Columbia has always been a bit balkanized in that the prestigious graduate programs produce alumni that are loyal to their graduate school and not the university in a larger sense. This is particularly true of the business school which produces capitalist movers and shakers who generally see the rest of the university as a silly hive of aging 60s radicals and neo-collectivist idealogies. Bollinger pissed alot of alumni off with his antics and it has exacerbated this balkaniztion, which has impications in the fund-raising sphere. Rich alumni are making donations specifically to their graduate schools. You get a faint whiff of this in the Bloomberg article. Russ Carson for example gives big dollars to the b-school but I doubt he would give one red cent to the university at large for Bollinger to get his grubby hands on. Bollinger sounds high-minded, but truth is he isn't enamored of not having more control over the funds that current b-school Dean Glenn Hubbard and particularly former Dean Feldberg have brought in. ``I want to draw alumni into the whole university, not just the parts they went to,'' Bollinger says. Yeah well, Bollinger is a big part of the reason behind the fund-raising balkanization.

Anyway, Bollinger appears to be deftly slinking out of this with a mild condemnation of Ahmadinejad and a "ah...er...(think dammit!), um... too short notice to pull off."

Gas and Unemployment: Obama's Crucibles

Dan Henninger has a great column today in the WSJ, talking about what we are losing as a nation that is so deep and important yet so subtle as to be easily missed. I understand this, big time. But what struck me is Henninger's off-hand quip about some frightful green bureaucratic agency instituted in Barack Obama's second term. This may be wishful thinking on my part but I see serious obstacles to an Obama second term. Sticky wickets like North Korea and Tea Parties aside (which ought not be dismissed, as they represent a real and legitimate concern over the mismatch between what citizens want out of their government and what government wants for itself), I think the two principal barriers to Obama's re-election are going to be energy prices and unemployment. In my opinion, it is a better than 50% chance that the nation will go into the 2012 election cycle with $4+ per gal. gasoline, and 10+% unemployment. This is not mindless Obama=Jimmy Carter reductionism. Most analysts agree that crude prices are likely to jump in a few years as a return of demand will stress anemic supply growth. The bursting of the oil bubble since July 2008 has substantially reduced capital expenditures on oil and gas exploration, drilling rigs have been shut down at a staggering rate and energy companies are retrenching heavily. This is what one would expect to happen based on fundamentals, but as they say in the oil business, "low prices cure low prices" meaning this decline is eminently reversible. However this old maxim may not play out true to form this time around when you consider the policy obstacles that may prevent the natural self-correction of energy production. The policy environment is so hostile, and set to get worse, for energy producers in this country that their domestic exploration budgets won't come back even close to 2006-2007 levels until the anti-hydrocarbon attack is toned down substantially. Put simply, energy producers are hiding under their desks. If they are spending money, it is abroad. The domestic energy exploration business is going on an extended vacation. Any energy that is produced abroad is subject to competitive bidding by the Chinese and the Indians, whose economies will be consuming ever-greater amounts of crude oil. It is a virtual certainty that oil prices will rise by 2011, potenitally substantially. Here though is my less certain prediction (20% probability): gasoline prices over $4 during the heart of the election cycle will weigh on Obama in the polls and he will tap the Strategic Petroleum Reserve to mitigate high prices (e.g. save his ass).

The second obstacle for an Obama re-election will be unemployment. Let us here distinguish between the economy, the stock market and unemployment. The economy can be doing fairly well, as can the stock market, while employment can be in relatively bad shape. The Democrats drove home this point a few years back with their incessant lamentations of "jobless recovery." We can certainly have one. Looking at the landscape holisitically, the incentives for companies to invest in hiring US workers over the next couple of years are underwhelming. Companies are likely facing input cost inflation driven by cap-and-trade legislation that will drive up energy and compliance costs. They may face the prospect of advancing unionization made easy through card check legislation (see here for the real danger in this terrible idea). They face higher taxes on income earned abroad, taxes which their foreign competitors do not pay. They face potentially intense anti-trust scrutiny. They face head-on regulatory attacks on their industry (just ask the credit card industry). The upshot of all this is that US corporations will be struggling to maintain their level of profitability, and when they do contemplate growth the incentives are for them to invest in productivity tools rather than people or to invest in workers abroad rather than domestically. Trust me, China and Brazil want US corporations to build factories in their countries and they won't have anything like cap and trade to make potential investors think twice. It is a long shot to conceive of large corporations, companies whose hiring registers on the establishment survey, hiring aggressively soon after having near death experiences and facing this set of disincentives. Small businesses too will be under severe pressure from many of the same forces I noted and since the small businessman or woman is the last to get paid, they will be reluctant to divvy up their uncertain pie with more employees. So, my sense is that unemployment is almost certainly not going to approach 6% in Obama's first term. The best we can probably do over the next four years is 8% and even that may prove a struggle; but, it is a very real possibility that it will be at 10% when the mid-term congressional elections roll around, and depending on a few to-be-determined legislative outcomes , 10% unemployment could persist into 2011.

So if we contemplate gas over $4 and 10% unemployment in 2011, how do key Obama constituencies react? What do recent and soon-to-be college grads, who are disproportionate liberal voters, do? Do they entertain pocketbook issues or do they maintain a youthful idealogical posture? Hard to say exactly, but it's easy to imagine some slippage among this group if they can't find jobs. Businessmen? A large chunk of the business community went for Obama in 2008. Will they be there for him? With the exceptions of those who directly benefit from Obama's agenda (think subsidized green enegy outfits), this is the area where Obama has created the biggest risk of losing 2008 supporters. These are the obvious ones. Less obvious is private sector unions. Sure, Obama will pull out all the stops to help them, but what if his actions backfire? What if trying to hand the auto unions a leg up raises the cost of capital and hampers employment at other unionized shops (i.e. CAT)? Do the rank and file vote Obama's intentions or his results?

So while North Korea, SCOTUS nominee Sotomayor are grabbing the headlines, these could turn out to be tangential issues for Obama and for voters come 2012. President Obama has sown alot of risk into core, pocketbook issues for the next election. It will test his political abilities to the hilt to avoid reaping bitter fruits.

Gas Price Update

Gas prices have been going the wrong way recently, the last three weeks have been somewhat ugly. We are already back to $4 here in New York state for mid-grade gas. This is a big anti-stimulant to the economy. Watch this space, it will be very easy for some Republican Super PAC to say, 'while you're paying $4 for gas, Obama has been shoveling tens of billions to now-bankrupt green energy fantasies...that are run by his cronies. Have a nice day."

My Cold Shower Is Looking Spot On.

With Mitt Romney moving into a slight lead in the polls in Wisconsin (!), it might be a good time to revisit my analysis of the not-to-distant conventional wisdom that Obama was a lock for re-election.

I'm Here to Cold Shower the CW on 2012

We are going to start seeing a ton of this kind of article, about how Obama is going to win in 2012 (here is another). I think these are reasonable analyses and I don't dispute the power of incumbency; I surely don't dispute that the slobbering love affair of the MSM/EJM with Dear Leader is going to kick into overdrive; and I don't dispute the idea that Republicans can screw up their chances. And of course, we never know what things will look like two years down the road. However, let me posit a few items that I've mentioned before but that are worth revisiting and combining.

- Obama will run with unemployment at/near 10% and gas over $4. While not a lock, these are highly probable. The economy is recovering but not fast enough to add the number of jobs needed to help Obama politically. Jobs creators are justifiably cautious and the only shift has been in Obama's rhetoric; the nasty, job-killing stuff he has foisted on the economy is still fully operational down in the inner workings of the economy. Even if unemployment moderates a bit, it is a virtual certainty that it will be higher than when he took office. Not good. Gas will be over $4 and food prices will be higher and rising (either explicitly so or stealthily so). These are core pocketbook problems that Americans have historically taken out on incumbent Presidents.

- Many Americans are still spitting mad at the MSM/EJM for their despicable performance in the 2008 campaign, a performance which continues today, and the thicker they lay it on, the more they slobber over Obama, the more grossed out it will make regular Americans and the more it will galvanize an anti-Obama coalition. The media will conduct Act II of its slobbering love affair from a vastly diminshed position in American society, with vastly reduced influence, this time around.

- The stakes are so high. If we re-elect Obama, we live with ObamaCare forever and we get more "wise Latina" entho-racial progressive victimology crap placed onto the High Court. Americans like continuity, but they have their limits.

- The world will look a mess, further revealing what a non-entity at best, a provocateur through his weakness at worst, Obama is on the world stage.

- His coalition is gone. And, Dear Leader may excite his base, but you can bet your keister that the other side's base will be damned excited too.

- ObamaCare will continue to backfire. Premiums will rise, doctors will refuse Medicare, drug prices will go up, among many other adverse developments. And we may even see the SCOTUS declare major portions of it unconstitutional. Under that scenario are we really going to re-elect the guy whose signature achievement proves to be a legally out-of-bounds, economic flop?

This is from January of 2011 mind you.  Much of this is now showing up in the polling and is the emerging conventional wisdom of the punditry.  But I heed the Good Professor's warning...don't get cocky kid.

I'm Here to Cold Shower the CW on 2012

We are going to start seeing a ton of this kind of article, about how Obama is going to win in 2012 (here is another). I think these are reasonable analyses and I don't dispute the power of incumbency; I surely don't dispute that the slobbering love affair of the MSM/EJM with Dear Leader is going to kick into overdrive; and I don't dispute the idea that Republicans can screw up their chances. And of course, we never know what things will look like two years down the road. However, let me posit a few items that I've mentioned before but that are worth revisiting and combining.

- Obama will run with unemployment at/near 10% and gas over $4. While not a lock, these are highly probable. The economy is recovering but not fast enough to add the number of jobs needed to help Obama politically. Jobs creators are justifiably cautious and the only shift has been in Obama's rhetoric; the nasty, job-killing stuff he has foisted on the economy is still fully operational down in the inner workings of the economy. Even if unemployment moderates a bit, it is a virtual certainty that it will be higher than when he took office. Not good. Gas will be over $4 and food prices will be higher and rising (either explicitly so or stealthily so). These are core pocketbook problems that Americans have historically taken out on incumbent Presidents.

- Many Americans are still spitting mad at the MSM/EJM for their despicable performance in the 2008 campaign, a performance which continues today, and the thicker they lay it on, the more they slobber over Obama, the more grossed out it will make regular Americans and the more it will galvanize an anti-Obama coalition. The media will conduct Act II of its slobbering love affair from a vastly diminshed position in American society, with vastly reduced influence, this time around.

- The stakes are so high. If we re-elect Obama, we live with ObamaCare forever and we get more "wise Latina" entho-racial progressive victimology crap placed onto the High Court. Americans like continuity, but they have their limits.

- The world will look a mess, further revealling what a non-entity at best, a provocateur through his weakness at worst, Obama is on the world stage.

- His coalition is gone. And, Dear Leader may excite his base, but you can bet your keister that the other side's base will be damned excited too.

- ObamaCare will continue to backfire. Premiums will rise, doctors will refuse Medicare, drug prices will go up, among many other adverse developments. And we may even see the SCOTUS declare major portions of it unconstitutional. Under that scenario are we really going to re-elect the guy whose signature achievement proves to be a legally out-of-bounds, economic flop?

- Donny Baseball will be beating the ABBO drum like nobody's business and just to ensure that the message gets out, I'm gonna flood the zone with hot chicks with guns. So here goes...ABBO!

Miscellany

People are talking about $4 gas. Remember who told you about 10% unemployment and $4 gas.

In other news, Hugo Chavez is praying for rain and accussing eight - count 'em, eight - Colombians for sabotaging the entire Venezuelan electrical grid. Chavez is hanging by a thread.

American Company That Americans Continuously Crap On: We're Investing $4 Billion...Abroad

This is good news for Ghana, but it also helps to think of this as $4 billion dollars that was NOT invested here at home. Told ya' so.

Obama, the State of Play and Some Self Back-Patting

Well, I haven't patted myself on the back in awhile so let me reiterate that - 2.5 years ago mind you - I said this election season would have 10% unemployment and $4 gas, thus burying the Obama fairy tale under a mountain of economic bad news (and don't gimme no BS about unemployment being only 8%, we all know that it's really 10+%).

I think the two principal barriers to Obama's re-election are going to be energy prices and unemployment. In my opinion, it is a better than 50% chance that the nation will go into the 2012 election cycle with $4+ per gal. gasoline, and 10+% unemployment. This is not mindless Obama=Jimmy Carter reductionism.

I predicted a "one term rally" in the stock market.

Secondarily, I think this is good for the stock market. The economy will muddle through for the remainder of this year and into next, but the further Obama slides and the lower his chances at reelection get, I think we will see an inversely proportional growth in economic optimism. The more it looks like Obama is a goner, the more American business leaders will feel like a giant weight is being lifted, the more entrepreneurs will feel like the sky is clearing. I predict a rough inverse correlation from here on in between Obama's poll numbers and the stock market - call it the "one term rally."

Stocks have been hitting a stride as of late, and, of course, the sycophantic pro-Obama media is playing it up and trying to give the Lightworker credit for the rally.  Readers know what I think of that notion.

And finally, I predicted a spectacular implosion of Obama's re-election effort.

While I predicted that Obama would meltdown almost on the day that he took office, we sit on the cusp of his re-election battle and he has stubbornly hung on to stay in contention, at least superficially.  So I am making another prediction, actually more of an update, I guess, to my original meltdown trajectory.  So here goes.  The Obama presidency/campaign/phenomenon will shortly implode.  Yes, "implode", as in spectacularly fail and wind up in ruins.

That prediction has not come unambiguously true, but the foundation has certainly been laid.  I recently noted these developments:

- Romney out-raises Obama by $60 million over two months and has a cash advantage over Obama
- Tina Brown runs "Hit the Road Barack" on the cover of Newsweek
- It is leaked that Hillary turned down the VP slot AND urged a reluctant Obama to strike bin Laden
- Joe Biden turns the Gaffe-o-meter up to a Spinal Tap-ish 11
- It is leaked that there is turmoil in the Obama Campaign HQ
- The MSM shines a light on Obama's brutally negative campaigning
- The Romney-Ryan ticket is playing to packed venues everywhere it goes
- gas prices are rising again and there are reports of a desperation tapping of the SPR
- a Cook County poll showed Obama's lead slipping in Cook County, IL
- and OF COURSE, on July 13th Obama gave his now infamous "You Didn't Build That" speech

We can add to that list the shockingly inept and revealing DNC platform debacle, the humiliating retreat from the 73,000 seat stadium venue for his nomination acceptance speech, the tepid at best and often highly critical reaction to that speech, and now the terrible jobs report released this morning.  I suspect that all this could lead to some bad poll results in the next couple of days. And bad polls often beget even worse polls.  Throw in the finally unleashed Romney airwaves assault funded by his sizable war chest and you're potentially looking at something very close to yours truly's predicted implosion.

Self-Back Patting Post No.2

See below for part 1. Let's not forget the conventional wisdom of just 10 months ago that Obama was a lock to win re-election.

Me on Dec. 23, 2010:

"Dear Leader's problem is more fundamental - at best he is not as advertised (political moderate, world-class temperament, uniter, able to marshall the finest economic minds in the land, yadayadayada) and, at worst, he is a slick but completely overwhelmed blunderer and/or something just shy of the Manchurian candidate. Americans now understand the thinness of his resume and the shallowness of his character, and a one-sided (against us) treaty with a crumbling, two-bit power run by a bunch of lying thugs is not going to alter that fundamental calculus American voters. Voters are simply going to weigh chance to remove these deficiencies from office against what is currently an unknown alternative. The notion of these "political wins" having any bearing on Obama's re-election is missing the big picture, and missing it big."

Me on Jan. 21, 2011:

- Obama will run with unemployment at/near 10% and gas over $4. While not a lock, these are highly probable. The economy is recovering but not fast enough to add the number of jobs needed to help Obama politically. Jobs creators are justifiably cautious and the only shift has been in Obama's rhetoric; the nasty, job-killing stuff he has foisted on the economy is still fully operational down in the inner workings of the economy. Even if unemployment moderates a bit, it is a virtual certainty that it will be higher than when he took office. Not good. Gas will be over $4 and food prices will be higher and rising (either explicitly so or stealthily so). These are core pocketbook problems that Americans have historically taken out on incumbent Presidents.

- The world will look a mess, further revealling what a non-entity at best, a provocateur through his weakness at worst, Obama is on the world stage.

- ObamaCare will continue to backfire. Premiums will rise, doctors will refuse Medicare, drug prices will go up, among many other adverse developments. And we may even see the SCOTUS declare major portions of it unconstitutional. Under that scenario are we really going to re-elect the guy whose signature achievement proves to be a legally out-of-bounds, economic flop?

Me on March 18, 2011:

"The man is so appallingly, awfully, and disastrously appalling, awful and disastrous that it is hard for me to believe that he can have an easy time of it in 2012. And yes, I understand the power of incumbancy, but the evidence that has been mounting in favor of putting the Obama experiment behind us is overwhelming and growing everyday, and the arguments for the conventional wisdom are extraordinarily weak...Finally, there is the economy. No amount of carping, which I and others have amply done, can express the abysmally malign influence of the Pelosi-Reid-Obama nexus on the US economy. Although stronger than it was during the worst of the panic of 2008 and resultant recession, the economy is far from stronger, and worse, it doesn't feel strong where it counts, to average people."

$4 Billion Looking Farther and Farther Away

Man, this stuff writes itself. Last week I posted about how Lee Bollinger, Columbia University's President, is trying to raise $4 billion and yet the busy bees that inhabit his silly hive of jejune radicalism seem to be thwarting him, albeit indirectly, with their antics. Here is the latest. In the absence of the fundraising campaign I honestly doubt Bollinger would make even a watered down defense of Gilchrist's free speech, but I suppose that since Bollinger is now seriously looking for money, he'll make a statement endorsing everyone's right to have their viewpoint heard. But he won't do anything about it, he won't make Columbia a place where opposing viewpoints are possible let alone accepted. Bollinger is as much a prisoner to the radical faculty and university community as Larry Summers was and you can bet that Bollinger isn't going to place his head anywhere near the chopping block after seeing what happened to Summers.

It's Official: I Made the Greatest Prediction Ever

Just a reminder, I made the greatest prediction ever.

I said - on May 28, 2009 - that Obama would tap the Strategic Petroleum Reserve to help mitigate rising fuel costs which would be a contributing factor in his declining polls.

It is a virtual certainty that oil prices will rise by 2011, potenitally substantially. Here though is my less certain prediction (20% probability): gasoline prices over $4 during the heart of the election cycle will weigh on Obama in the polls and he will tap the Strategic Petroleum Reserve to mitigate high prices (e.g. save his ass).

Nailed it.

You Can Have Any Car You Want, As Long As It's Green

Chrysler, in desperate need of some success, seeks to improve one of its best-selling vehicles, a vehicle without which the company would have been out of business ages ago. So, it makes the Jeep Grand Cherokee more fuel efficient. But our new industrial overloads in the Obama Administration are still pissed, 'cause its an SUV. But the highly-risky, certainly loss-making Chevy Volt is full speed ahead.

UPDATE: One of GM's best and historically most successful brands (but they had a bad 2008 when gas was at $4/gal.) ought to go says the Gubmint. Why? No small cars, obviously. GMC is a truck-only brand essentially. Social engineering via bailout. Don't despair though. Remember, you can fight the power...buy a Ford.

Gas Price Update

Gas numbers just out. Another bad week in a succession of bad weeks, nationally gas prices went .04 in the wrong direction - some areas saw worse - and diesel went nearly .09 cents against us with a .10 hit in the Midwest. Ouch.

I filled up this weekend and couldn't help notice that regular gas was touching $4 and premium grades were as high as $4.25 in my neck of the woods. Looking at crude oil lately, it doesn't look as if we'll get a break soon. We're closing in on $120. Remember, $140 broke the back of the consumer in 2008 and was a much bigger part of the recession than people give credit for. We are flirting with danger here and this is a big vulnerability for the Lightworker.

Ten Four, Over and Out Good Buddy

Thanks to the SayAnything guys for pointing out just how damn right I might turn out to be - I said we'd see 10% unemployment and $4 gas by the time The Lightworker has to campaign for a second term. Well, we are at 10% unemployment (more like 17% if you use the measure that Paul Krugman used while Bush was in office) and are fast approaching $3 gas (in fact we have $3 gas in California and parts West), and looking to go higher. With no other obstacles in his way, The Lightworker would have a tough fight on his hands just with the 1o/4 tandem. Alas he's got many other obstacles - the arrogance, the radicalism, and the ineptitude. Add in 10%/$4 and it's over and out barring a miracle.

Bernanke Drives Nail into Obama's Coffin

While the Fed may have given the Treasury a gift yesterday, as Brian Wesbury notes, it has driven a nail in Barack Obama's coffin. A much weaker dollar and inflation are now baked in the cake, which will lead to an economic environment that Barack Obama will not survive. Imports, principally oil and gasoline, will become more expensive in dollar terms and we'll now get that $4 gas price that I have predicted along with its consequences for those in power. Inflation will rear its ugly head again, which, as Scott Grannis points out, dampens investment in productivity enhancing technologies. Manufacturing and capital investment has been a bright spot so far in these meager recovery, but these areas will now likely slow down. Add in those two massive exercises in micro-management that the Pelosicrats have given us, and we have some very thick, nasty mud in which to get mired down in economically. There are no more incremental steps left that can possibly improve the economic outlook, a "shock and awe" revitalization effort is needed that includes tax cuts, strong dollar policy, deregulation, substantially less government spending, and repeal/reform of ObamaCare and Dodd-Frank. And it won't be coming from Barack Obama. Therefore I conclude he is cooked. As the economy stagnates, I predict his approval ratings will sink into the 30s, just as he has to face the voters again in 2012.

It's a Comin'

Here's crude oil futures, folks:

Remember, between Ben Bernanke and the drilling moratorium, this is just the beginning. i don't need to remind you what $4 gas and 10% unemployment means, do I...

President. Fork. Stick. Done.

More On Gas Prices

I recently highlighted the wrong way direction of gas prices. USA Today picks up the theme and makes a pessimistic prediction.

Prices could spike another 60 cents or more by May. "I think it's going to be a chaotic spring, with huge price increases in some places," says Tom Kloza of the Oil Price Information Service. Kloza expects average prices to peak at $4.05, although he and other industry trackers say prices could be sharply higher in some markets.

I have long predicted that we'd see $4 gas in the 2012 election cycle.

Oops

$90. That Team Obama doesn't get how bad this is for them is astounding.

Just for shits and giggles, let's operate the way back machine for a pearl:

"It is a virtual certainty that oil prices will rise by 2011, potenitally substantially. Here though is my less certain prediction (20% probability): gasoline prices over $4 during the heart of the election cycle will weigh on Obama in the polls and he will tap the Strategic Petroleum Reserve to mitigate high prices (e.g. save his ass). "

We're at $3 now and everyday that we don't drill in the Gulf of Mexico and the global economy grows is a day in which gas prices will go up.