Was a positive ISM report the spark bulls needed to seize the tape and put a short-squeeze on? It wouldn’t take much with markets much oversold. But, higher prices paid are hurting manufacturers in this inflationary environment and passing these costs to customers is becoming increasingly difficult. Meanwhile inventories are growing and new orders are slowing. This is a pretty thin reed for a rally. Inside the numbers the troubles plaguing investors and the economy are still omnipresent with commodity prices rising, transports tumbling and emerging markets faltering. Volume was very heavy but breadth wasn’t impressive. [With columns, please eyeball the math. Poor Yahoo just can’t do it. We’ve had good suggestions and many folks and agents “trying” to contact them to fix it. Do they care??? The answer seems, obviously not.]

Article Source Arnold Kling poses a question for Paul Krugman. Here's how I would answer. Kling writes: Early in 2007, the price of oil was $60 a barrel. Recently, it has been above $130 a barrel. Which of the following does Paul Krugman believe: (a) market fundamentals justified $60 a barrel then, and they justify $130 a barrel now; or (b) market fundamentals justified a much higher price in 2007? ...We know that Krugman does not believe that today's oil price is out of line with fundamentals. Krugman's view, in effect, is that if speculators artificially boost the price of oil, then supply will exceed demand, and the excess has to go somewhere. Where are the inventories? This view ought to hold in reverse. If speculators artificially kept the price of oil too low early in 2007, then demand should have exceeded supply and inventories should have ...