There are no positive economic news stories, so you'd think that Dr. Doom would be happy. The Fed's Beige Book was pretty clear: every region of the country is experiencing a slowdown. Retail sales were... there are barely words to describe them, but grotesque might do the trick. It almost seemed that whenever any Washington official stood by a microphone, the stock market plunged. I was chatting with an investor the other day when the Dow Jones Industrial Average was up more than 400 points, and I said, “Here we go again, another unsustainable rally.” If stock prices—which are based on expectations of future profitability (whether realistic or not)—have dropped this much, what does that tell us? The comments I made last week in the ERC blog still hold. It's a mess.

There was some interesting economic news. Interesting because they almost don't matter when people are panicking. The Consumer Price Index (CPI) report came in unchanged for September, from the previous month. So what? Fuel oil is still 38% higher than September of last year and gasoline was 32% higher. The report stated that car prices went down. Of course they did: they're not selling any! This is why oil prices are dropping: no demand! Supply chains are full of higher priced oil or contracts for delivery at higher prices, and demand for the goods that would be made with oil have dropped so much that spot prices are falling. Where's Congress now? Shouldn't we be hauling “Big Oil” in front of committees asking why the prices are falling so rapidly? Shouldn't someone be blaming speculators? A big problem looming will be homeowners who signed contracts for winter heating oil at very high prices, looking to protect themselves from the rising oil prices. Local television news should have a field day with hard-hitting reports about that, especially during ratings weeks.

There's no speculation about the direction of consumer magazine ad pages: down sharply. The Publishers Information Bureau (PIB) reported that ad page revenue was down -5%. Don't believe them. The organization calculates ad revenues based on published rate card prices. It would be like Wal-Mart reporting its sales at list price. It was a drop of 9.5% in ad pages. The report does not include the effect of changes in circulation, and we know that's down. Our chart below puts the data on an indexed basis, so it's easier to see the real nosedive compared to last year.