Four Times the 3 Wood is Thrice as Nice

The Boss Hoss ~ Truck´n´Roll Rules

Well, it looks like the Law of Demand still works.

For those not schooled in economics, the Law of Demand simply states that the more something costs the less you will demand, the less something costs, the more you will demand. It is often also referred to as the law of a downward sloping demand curve. This is being proven out in the demand for gasoline.

Miles driven in May drop 3.7 pct: government

"WASHINGTON (Reuters) - Soaring gasoline prices and a weak economy combined in May to reduce the number of highway miles traveled during the month by a record 3.7 percent, the U.S. Transportation Department said on Monday.

The 9.6 billion miles less traveled was the biggest drop ever for any May, when traffic usually increases due to the Memorial Day holiday and the beginning of summer vacations.

During the first five months of the year, highway travel was down 29.8 billion miles, or 2.4 percent, from the same period in 2007.

"The decline in American driving is deepening," U.S. Transportation Secretary Mary Peters said.

"During the past seven months, Americans drove 40.5 billion miles less than they did over the same period last year. It's the equivalent of 200 round trips to the sun, if you want to put it into perspective," she said."

Purely and simply, folks are reacting to and dealing with the higher price of fuel by changing their consumption in several ways. First, they are cutting down on their discretionary spending on items like high priced coffee as evidenced by the drop in demand for places like Starbucks. Second, they are cutting down on their driving and trying to conserve fuel. Third, they are gradually switching to more fuel efficient vehicles (which will take a longer period of time to be felt in the market).

As the article points out, you are seeing a roughly 2% to 4% drop in demand for fuel, at the same time that population is increasing. If this trend continues then you should see a sustained drop in the price of fuel at the pump. I do not think we will see $2 a gallon gasoline again, but $3 a gallon is possible.

The fly in the ointment though is, as the price drops then people start driving more again.

All the while, Congress continues to fluster ant talk an do noting significant to positively impact the situation. As always, the solution lies in economics and Adam Smith instead of governmental action and politicians.

You might want to sit down before you read this shocker. The BBC misleads it's viewers. I know, I know, it's a stunner, but even the BBC themselves admits it now.

Record fine over BBC's phone-ins

The BBC has been fined £400,000 by media watchdog Ofcom for misleading its audiences by "faking" phone-ins.

The Comic Relief, Children in Need and Sport Relief TV shows were caught up in the scandal, along with Liz Kershaw on 6 Music and Jo Whiley's Radio 1 show.

The regulator's £400,000 penalty is a record for the corporation.

"The BBC deceived its audience by faking winners of competitions and deliberately conducting competitions unfairly," Ofcom said.

Viewers were urged to call some BBC programmes after contestants had already been chosen.

How bad is it? pretty bad:

"In some cases, the production team had taken premeditated decisions to broadcast competitions and encourage listeners to enter in the full knowledge that the audience stood no chance of winning," the watchdog said.

"In other cases, programmes faced with technical problems made up the names of winners.

"Overall, Ofcom found that the BBC failed to have adequate management oversight of its compliance and training procedures to ensure that the audience was not misled."

Now, get the reaction by BBC management:

The BBC said the issues had been taken "extremely seriously" all along, with apologies made and "an unprecedented action plan" to deal with the matters raised.

These plans included training for more than 19,000 staff, new guidance to programme makers on the running of competitions and a stricter code of conduct, it added.

So they have to have special training for their 19,000 staff to be honest? Kind of makes you wonder about the corporate culture over there. I wonder if the 19,000 staff includes their news staff? From what I saw of the local BBC nes broadcasts when I was in Ireland, they sure need to be included.

Gee, the BBC lying to the public. Who would'a thunk it?

The Federal Reserve Bank continues it's efforts to remove volatility from the market

Fed tweaks emergency liquidity measures

"WASHINGTON (MarketWatch) -- The Federal Reserve, continuing to combat the enormous stresses that have engulfed financial markets, announced Wednesday several steps designed to enhance its emergency lending program for banks and primary dealers.

For banks, the Fed said it would lengthen some of the credit it extends to 84 days. At the moment, the loans have been for 28 days.

For broker dealers that serve as primary dealers of Treasury debt, the Fed said it would introduce auctions of options on $50 billion of loans. The options could be exercised if needed in periods of elevated stress in months to come, such as the end of financial quarters.

The Fed also said it's officially extending its primary-dealer loan program to the end of January from mid-September. This step had been previously telegraphed by Fed Chairman Ben Bernanke.

In addition, the Fed said that the European Central Bank and the Swiss National Bank have agreed to adapt the maturities of their liquidity operations to match those of the U.S. central bank.

Moreover, the Fed said it would increase its swap line with the ECB, the central bank for euro-zone countries, to $55 billion from $50 billion to accommodate this transition to lengthier maturities."

Translating all this financial mumbo-jumbo into English, this means that the Federal Reserve Bank is making it very clear to the markets that the bleeding is over, and that stability will be brought back tot he markets. What's more they have joined forces with the EU Bank and the Swiss National Bank to provide stability to much of Europe as well. Basically, they are saying that the damage to the markets stops now.

We can all argue later whether or not if this is too much big governement, etc. But the Fed's can not just stand by and watch the markets continue to bounce around due to over reactions.

Barack Obama met with the Federal Reserve Board Chairman Bernanke on Tuesday

UPDATE 1-Obama meets Bernanke to discuss economy

"WASHINGTON, July 29 (Reuters) - Democratic presidential candidate Barack Obama met Federal Reserve Chairman Ben Bernanke on Tuesday afternoon to discuss the U.S. economy and how to bolster it.

The Illinois senator, who focused his campaign on the economy this week after a trip abroad last week, met with Bernanke at the Federal Reserve for about 40 minutes on Tuesday afternoon after speaking with Treasury Secretary Henry Paulson by telephone in the morning.

Obama spokeswoman Jen Psaki said the Democratic candidate planned to use the meeting with Bernanke to discuss "the economy and plans going forward."

An adviser said Obama wanted to talk with Bernanke about the U.S. housing crisis and what he saw as the need for tighter financial regulation and more fiscal stimulus to boost the economy."

This is out of line in about 3 different ways.

1. Historically, the Fed. Chairman only meets with Presidents or President-elects. Not candidates. It is a waste of the Chairman's time to do this. As things stand Obama is a junior Senator, nothing more and should not be wasting the Chairman's time with this nonsense.

2. It is completely irrelevant to the Federal Reserve Bank what Obama sees as needed for more regulation and fiscal stimulus. The Federal Reserve Board is supposed to be independent of politics and should not be being lobbied. The Fed's handle monetary policy, the politicians handle fiscal policy. The 2 need to remain separate. Obama needs to shut his yap and leave the Chairman alone.

3. The terms "fiscal stimulus" and "boost the economy" have nothing to do with monetary policy, which is the role of the Federal Reserve Bank. Their role is to provide for a stable currency and control the money supply. This tells me that Obama does not know what he is talking about concerning economics (not a big surprise to me).

If Obama gets elected, The Federal Reserve Board is going to have big problems with the White House.

The Prophet Zimmy ~ Idiot Wind