We have long advocated that defense of the dollar is key. A stronger dollar could bring about lower oil prices as oil is priced in dollars. High oil prices have such an inflationary effect that moderating the spike we are in is essential. Both Bowyer and Malpass (see video) figured the market saw the Fed's move to keep the discount window open as a necessary step to insure liquidity to the system if they decided to raise rates. Messrs Bowyer and Malpass saw this as a signal the Fed will defend the dollar by raising rates if need be and the market read this and rallied the dollar and sold off oil. I think they are right and we'll see how it all unfolds.
Other happenings on CNBC yesterday included Byron Wein opining the market is in a "bottoming phase" and he expects a better market as the end of the year approaches. Secretary of the Treasury Paulson figures the housing market, while bad, isn't as bad as the headlines since home price data includes sales of foreclosed homes. Ex the foreclosures, the data would show a slump in home values, but not nearly as bad as the reported data. Boone Pickens is pushing hard on wind power, indeed on all forms of alternative power but wind is his investment focus.
We have so much low hanging fruit to harvest in this arena. I read somewhere that except for Seattle, the US is sunnier than Germany. Yet Germany has 17 times the installed solar base on a per capita basis. Our "Renewable Energy Lab's" budget is off 78% since 1978 and now is only $200 million dollars.
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