SHOOT: So at the same time, the media reports that GDP growth is ratcheting downward at a record rate, but oil prices are shooting up. That just doesn't compute. If GDP increases, demand increases, and so oil prices increases. But GDP is worsening at a rapid rate and oil prices are still increasing?
GDP losses are based on reality - job losses, porperty markets crashing, inflation. Oil price gains are based entirely on sentimental fiction. Hopes based on nothing that 'recovery' is likely. It's not. Hoping so may change things until reality catches up. This is the market grasping at straws and demonstrating how facile the market [thinks it] is.
WASHINGTON – The economy sank at a 5.7 percent pace in the first quarter as the brute force of the recession carried over into this year. However, many analysts believe activity isn't shrinking nearly as much now as the downturn flashes signs of letting up.
It was a grim first-quarter performance despite the small upgrade. It marked the second straight quarter where the economy took a huge tumble. At the end of last year, the economy shrank at a staggering 6.3 percent pace, the most in a quarter-century.
Economy sinks at a 5.7 percent pace in 1Q
LONDON – Oil prices extended a rally to above $66 a barrel Friday to hit a fresh six-month high, after the U.S. reported a fall in oil inventories and further signs of an improving economy.
"The market is factoring in a recovery in demand by the end of the year." "But there's no real evidence that demand is picking up at this point."
In London, Brent prices rose 92 cents to $65.31 a barrel on the ICE Futures exchange.
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clipped from news.yahoo.com
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