$ vs. Crude...Hmmm! (9 July 2008 Issue)

Can we continue to hang our hat on the view that much of the bad news is already in the price of the dollar? Well, based on the dismal views about the US economy, which we don’t dispute, which we seem to find everywhere we look, the short answer is yes. But it’s not just that belief. Something seems to have changed—though even this is a thin reed of reasoning we grant you.

Back in mid-April the US dollar index made its closing low (and its all-time low in mid- March, the day the Fed saved Bear Stearns). At the time, crude oil was trading at $116 per barrel (heck, downright cheap in retrospect...LOL).