WOLF

No matter how many times I cry Wolf, I see what I see, nothing more, nothing less.

For the week of May 30, gasoline consumption in the US was down 3.9% compared to last year. Jet fuel consumption was down 2%. Crude oil imports were down 4.4%, gasoline imports were down 13% and jet fuel imports were down 31.%.


When the price spiked in the 1970's, it took 20 years for consumption to return to the old highs. US total consumption dropped about 3 million barrels per day out of 18. Today, consumption is back at 2004 levels. The demand out of developing nations will be the next to crack.

The price does not have to fall a lot for the "turn" to be here. Steady consumption would mean that economic growth goes to other sectors.

Ahmadinejad is hanging tough. He is like a trapped animal so it has been wise to only gradually close off his escape options. US officials say with confidence that an agreement will be signed with Iraq, permitting a continued presence in Iraq, by July. Some say there is no way that the Maliki government can win approval by July. There is too much at stake to not leave peace keeping troops in the area. Scores of multi-billion dollar development deals depend on a package deal. Iraq and Iran will have signed off on a package by August, most likely sooner. Bush will spend 10 days or so in China during the Olympics. There is a good possibility this will be part of his victory celebration.

The Wolf seems to be at the stock market door but the turn does not depend on the signatures hitting the paper first. The protests around the world are significant. They show that sentiment has reached extreme levels. Actions are being taken. Results will be achieved.