"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

After getting this mornings data from the Energy Department which said oil inventories fell much more than expected last week, one thought came to mind. The thought is taken from the Bible; Matt. 25:28-30 which reads;

--- they will be cast into "outer darkness," the place where there shall be "weeping and gnashing of teeth."

Consumers are getting poorer by the moment as gasoline prices continue to rise. The weeping and gnashing of teeth has begun. As I traveled to Ft. Myers and Jackson, Mississippi over the past few days, the disgust among the consumers is growing louder.

The Energy Information Administration said oil inventories fell by 4.6 million barrels last week, and oil prices spiked this morning +$5.63 to $137.50 for the August contract.

My opinion remains that oil prices will fall in July, and continue to trend downward into the election. Call me cynical, but this has been the case in the past two elections.

This contrarian view is in opposition of the comments made by the EIA who said "Motorists can expect gasoline prices around $4 gallon through next year, with oil prices staying well above $100 a barrel."

If the EIA prediction comes true, Presidential hopeful, John McCain might as well drop out of the race right now and stop wasting his time.

In addition, oil insiders better step up their stock sales because a windfall profits tax will eat into their net worth. Over the past few weeks, oil insiders have stepped up sold large blocks of stock.

Here is a very good article by Paul Craig Roberts, explaining the reasons why oil prices are high- Read Article. Roberts was Assistant Secretary of the Treasury during President Reagan’s first term.

In a double whammy, Federal Reserve Chairman Ben Bernanke said a substantial economic downturn seems unlikely, and investors are taking this as a hint that the Fed may begin raising interest rates to fight inflation.

Investment Banks are once again in the cross-hairs of sellers as the threat of higher interest rates are weighing heavily on Goldman Sachs (GS), Lehman Brothers (LEH), Merrill Lynch (MER), and Morgan Stanley (MS).

The Federal Reserve released its Beige Book report this afternoon, and the results showed that economic conditions remain "softer, weaker, or lower". As inflation continues to be a problem, many analysts expect the Fed to halt it's lowering of interest rates.

As we now stand, the "Weeping and Gnashing of teeth" has begun.