.....Thus I have to take as fact that the oil is not flowing.
Thus.... what's hiding and where?
Well there are only two and a half explanations and you won't like either of them as neither can explain it but both at once does. The half is easy; storage at the time it started can be drawn down and has been. And while one of the wholes is at least somewhat-speculative the other is not; it is factual and the media has ignored it although I've certainly reported on it.
The somewhat speculative one is demand destruction. I've seen enough patterns of behavior in the form of traffic, business and now in the CPI in hotel prices down 4% m/o/m to believe its real. What I see in my particular area and when traveling (remember I recently was chasing train) is by no means a national snapshot but the CPI index is. A 4% drop month over month in the price of hotels in the middle of the summer, the highest demand period for travel and tourism, is a screaming warning of economic softness. Essentially all such travel is discretionary, of course, and when people get squeezed that's where the spending goes away first.
The not-speculative one at all is the non-job numbers; absent health care and social services the economy has lost nearly a half-million jobs since Trump took office. If you doubt this go look at FRED yourself, download the two series and chart it in Excel or similar. Zero of the jobs in those two segments actually build anything; they are in many cases necessary but in all cases parasitic to the economy as a whole and all of them are utterly dependent on continued deficit spending.
Worse, the current run rate for interest in the federal budget is approximately $1.3 trillion and rising rapidly. We are now in the exponential upward-sloping phase of said expense and more deficit spending, which must continue for those two sectors to keep the existing jobs, say much less add more of them, is utterly reliant on that. Yet that CANNOT continue on a forward basis or the interest expense will literally eat the entire federal budget and force a fiscal collapse.
In this context demand destruction makes perfect sense and the Government is attempting to keep -- so far successfully -- the market from detonating by trying to hide that otherwise-obvious demand destruction through this one segment by said deficit spending. The strategy might make sense if there was a return on same over a reasonable period of time but there isn't because those two segments at best allow people to keep working in other areas who can contribute tangible advance -- being net neutral, in other words, is the best they can do.
Meanwhile the spiraling interest expense continues and as you can see clearly from that graph it has now gone vertical which, as I pointed out, is entirely due to the natural cycle of interest rates turning in 2019 and rather than anticipate and pay down debt or roll it way out on the curve (e.g. into the 30 year Treasury) while said very low rates were available the government did the exact opposite and so did corporations.
Note that this non health-care and social assistance area includes literally everything else. Yes, your supposed AI "nirvana" employment, those building data centers, paving roads, constructing bridges, houses, office buildings, digging up oil and gas, making and install solar panels, building cars and trucks -- all of it. All-in a half-million jobs, and this is not population adjusted (population adjusted that number is nearly negative three and a half million!) have disappeared since January of 2025.
That latter indication has been, as I've noted repeatedly, negative on an unbroken basis since December of 2023 so the acts and policies that put this in motion cannot be pinned on the Trump Administration. But he has not only done nothing to correct it he's made it worse while allowing the deficit spending to ramp and interest payments to exponentially expand.
No exponential series can or ever does grow to the sky -- or the Moon. All such attempts fail because mathematically they must.
The question now is what breaks first?
I don't know, but this is the same sort of "hopium" bong smoke hanging over the entire economy and market that was quite-apparent from the summer of 2007 into the summer of 2008 when "subprime is contained" was the mantra. Yes, a few people lost their highly-leveraged bet money, but such is the nature of buying Powerball tickets, so the story was claimed to be, and as you can see the interest expense and deficit spend then was a tiny fraction of what it is now.
That time it was a lie.
