Ravengate
Partners - Stock market, economic and political commentary by Patricia Chadwick

There really is some good news out there. First, the price of a barrel of oil has dropped from $147 to $63, (this morning) its lowest level since June 2007. In fact, the price of gasoline is now no higher now than it was just a year ago. This favorable trend will act like a tax cut to consumers, putting real money in their pockets. Moreover, consumers can face the upcoming winter with far less trepidation and can take comfort in the fact that as things stand now, their heating bills will likely be more like last year’s.

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Or put another way, beggars can’t be choosers. Over the last few weeks, the world witnessed the impending annihilation of the financial markets worldwide with grave ramifications for capitalism globally. It was scary. And then help came in the form of Government intervention through a massive injection of equity capital into the banks. The UK led the way, and once it had taken that giant step, the U.S. had no choice but to follow suit.

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We are heading into a full blown recession now and I cannot imagine that it will be ‘short and sweet’ as the last two were. As Rome burned last week and Nero (aka Congress) fiddled away, Main Street got the picture and started a boycott, not out of spite or anger but out of fear. Parking places were suddenly easy to find on Main Street because the shops were empty. Talking to people who have their life savings invested in stocks, bonds and cash, one can palpably sense their fear. I cannot remember a situation like this in the forty years I have been in the investment business.

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It came home to me loud and clear by mid-day yesterday why so many members of Congress simply could not vote in favor of the rescue bill before them now. The responses to my blog yesterday on CNBC.com “Why You Should Write Your Congressman” (Main Street, Wake Up… on my website) were easily ten to one in opposition of my support of passage of the bill. The language in some of the emails was simply unrepeatable and the vitriol and anger brought me back in time to my study of history. I had an image of Robespierre at the onset of the French Revolution with hordes of angry French citizens railing against the Crown.

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