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At the end of the day, whether oil is $100 or $130 a barrel, it's still taking a mighty chunk out of our economy and others around the world. And I suspect that as we get deeper into the month (i.e., closer to earnings season), the facts (excluding energy's run-up) will be far more troublesome than the bullish contingent now suspects.
The big problem isn't oil
I had expected that should oil take a breather, folks would buy stocks, though, when discussing the price of oil, it's no longer possible to know what number will be deemed "low" enough to matter.Thus I would imagine that for a while, the stock market will be hostage to the energy market, as the Goldilocks crowd thinks that our only problem is energy prices and that if were it not for that, we'd be heading toward some variation of good times.
Which is not the case.
The real problem in America today is largely a function of the maniacal real-estate bubble, created by the abdication of credit standards that allowed it to last as long as it did. With credit now contracting, the fallout is affecting financial institutions -- UBS (UBS, news, msgs) and KeyCorp (KEY, news, msgs), to name two recent examples.
Of course, the consumer is also being affected by the inflation created by the Fed's response to everything. Though, as I noted at the beginning of this column, the Fed will worry about inflation -- as it creates more of it.
That is what the Goldilocks crowd should be focused on, rather than the daily machinations surrounding the price of oil.
At the time of publication, Bill Fleckenstein did not own or control shares of any company mentioned in this column.
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