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

All of the views from our cat-bird seat tells me the U.S. has been in recession since late 2007. Since many of the economic numbers jammed down our throats insults our intelligence, we go by what is happening to the everyday person on the street. In short, now that the "big hat, no cattle" consumer can no longer spend home equity money on things they do not need, the U.S. economic slowdown is beginning to affect the rest of the world economies.

GDP growth in the second quarter came as a result of the one-time Federal income tax rebates, but the quarterly unemployment rate continues to rise, As it stands, the unemployment rate is now at 5.7%, and is projected to rise to 6.1% by the end of the year.

The good news is the stock market will anticipate an economic recovery 3-6 months before the recession ends. By mid-2009, I anticipate a recovery will occur if energy prices continue to decline. If not, the economic downturn will be much more painful since the Feds next move will be to raise interest rates to protect the dollar, and drive energy prices lower. My hope is energy prices will lead to a recovery, and the Fed will not have to force the issue.

Yesterday's Fed meeting was a waste of time. Everyone knew rates were going to remain unchanged, and the policy statement was consistent with the comments Bernanke made in his Monetary Policy Report testimony in July.

On the oil front, its amazing to see how much perception can change in less than a month. Over the July 4th holiday, consumers were being raped at the pumps because of some concocted excuse (supply/demand, Iran, Nigeria, or anything else they could concoct). Today, and even a day ago when a tropical storm was heading toward the shipping ports in Houston, oil prices were dropping like a rock. Currently, oil prices are down almost $30/bbl in about 23 days.

The thing that really disappoints me is how much we little people are manipulated and led around by our noses. We have a wonderful country with millions of wonderful people, but just like the movie "Mr. Smith Goes to Washington (1939)", we are held hostage by politicians who do not serve our best interests.

If you haven't seen the movie- here it is- Movie

I don't like to be Pollyanna when it comes money, and I am concerned that the recent drop in oil prices is due in part to election year manipulation. The other (temporary?) factor driving prices lower is the Chinese governments order to reduce industrial pollution by 70% before the Olympics. The steps they have taken are extreme, and ordering 45 percent of Beijing's 3.29 million cars off the roads to cure the pollution problem has to be looked at as temporary.

Once the Olympics and election are over, we will see if the drop in oil prices were prearranged, a ploy, a con job, or for real.