Ya Think?

Congress and the Federal Reserve aren’t likely to provide any meaningful stimulus to the economy. But your corner gas station might.

Ya think? Thanks for saying it though. It makes me look good because it is what I have been saying for a bit now.

The average gas price has come down about 40 cents, or 10%, since the peak near $4 a gallon in early April. With U.S. drivers expected to use about 133 billion gallons of gasoline this year, the 40-cent price break works out to about $53 billion in annual savings if it were to stay in place for a full year.

And thanks for giving some specific details on the money side of it. So, let me see, if gas prices drop another 10%, that would mean another $50 billion or so in the pockets of US consumers. Wow! This is starting to sound like a stimulus program.

Officials from the G20 nations, whose leaders are meeting in Mexico next week, told Reuters on Thursday that central banks were ready to take steps to stabilize financial markets – if needed – by providing liquidity and prevent any credit squeeze after Sunday’s election.

Ya think? Thanks for saying it though. It makes me look good because I have been speaking to this reality for some time now.

Determined to show voters he is not Angela Merkel’s doormat and convinced he is well positioned to get his way, French President Francois Hollande is discarding diplomatic codes as he resets relations with a politically weakened German government.

The political winds are shifting, no doubt, and to the good of all, no doubt. Europe needs a jolt, and there is no other way, other than to provide debt relief and stimulus to the weak economies. The market knows this, and is now expecting this. Angela Merkel even understands this now.

Merkel’s hand is not as strong as it was, and politically she is in a much weaker position than Hollande. Merkel is dependent on coalition partners in parliament and has 16 months until the next general election, when she may be forced into a grand coalition with the Social Democrats. Merkel has now accepted the four key measures he has put forward, which were already on the EU’s agenda before his election — more capital for the European Investment Bank, a reallocation of EU regional aid funds, project bonds to fund cross-border infrastructure and a financial transaction tax.

Before any of the above happens though, get ready for Monday because Greece votes on Sunday. If Greece fails, the market could swoon. If not, the market could really pop. Then again, because so much for so long has been said about this moment, the market could just as easily say, “Yeh, so what?” Ambivalent, yes, but so is one of my favorite market analysts.

It feels like the market is on a razor’s edge, says trader Tim Seymour. There’s been plenty of talk about the downside, but Greece could trigger huge upside, too.