Kass: The Media's Muddled Message

This blog post originally appeared on RealMoney Silver on May 6 at 7:50 a.m. EDT.

"The real news is bad news."

-- Marshall McLuhan

If the media (medium) is the message, God help us all these days.

As McLuhan writes in The Gutenberg Galaxy: The Making of Typographic Man, communication platforms of all types (print, Internet, television, etc.) exert a gravitational effect on cognition and in the formation of opinion (on the human sensorium).

Throughout yesterday, media commentators and guests (on multiple occasions) expressed the view that the American consumer was growing accustomed to $120 oil. ("Getting used to it" was the most frequently used term.) Ergo, the doubling in the price of certain energy product prices over the last year would have little consequence or threat to the markets and on the world's economies.

From my perch, the world's equity markets will require stable to lower energy and commodity prices in order to launch a new advance. Thus far, slowing U.S. and European economic growth have failed to affect these prices, but cost push and demand pull inflation will no doubt contribute to a lengthier (and possibly deeper) economic slowdown.

The best outcome would be, coincident with disappointing European economic news, an ECB rate cut, which could lift our currency and depress the price of crude oil. The most painful way toward lower energy prices would be a more substantial global recession.