It's Tough to Micromanage Every Market

News of the Trump Administration on the edge of bailing out Spirit Airlines, a low cost carrier with a reputation for shaky customer service and, shall we say, a not-so-friendly atmosphere in the skies, simply reinforces how active a role Trump believes government should play in most aspects of the economy.

Capitalism without failure is like Christianity without Hell--It is there for a specific and instructive purpose. And yet here we are in a world where The Fed is too soft to hike rates despite inflation running well above target for five years (think about about inefficient that is, insofar as how many poorly-run businesses and inept employees are being kept economically alive due to easy money policies), alongside nonstop spending by Congress and, of course, one White House after the next hell-bent on not allowing any sort of creative destruction of businesses which ought to be bankrupt.

And that brings us to gasoline prices. As you can see, the UGA ETF (which measures a rolling average of gasoline nationwide at the pump) weekly chart, below, is suddenly back at the March highs. Crude oil (WTI) is turning back higher in its own right, despite constant suspicions that the White House is selling front-month oil to suppress the paper price. 

But it is tough to intervene in every single market. And gasoline may be a testament to that, with the highlighted weekly chart bull flag looking ripe to uncoil higher. Recall that summer driving season is coming. Beyond that, with vast uncertainty and cancelled flights we could easily see many folks changing their summer plans to roadtrips in lieu of flights.

All of those factors, beyond Iran, should push gasoline prices to new highs into Memorial Day Weekend, suddenly about a month away.