After the recent shock of the roller-coaster ups and downs of U.S. and world stock markets wore off, the economy seemed to have leveled off into a state of some equanimity.


The initial market buffeting was due to the credit squeeze caused by collective realization that subprime mortgage lending and trading heavily on bundles of weak loans were both irresponsible and foolish.

Now things promise to get worse. In the face of the credit squeeze, which depresses the housing market and everything associated with it - mergers and acquisitions, production and plant expansion, consumption - we are informed that world stocks of oil and gas are depleted and demand for petroleum will exceed supply. The Organization of the Petroleum Exporting Countries has promised to increase production to try to meet the need, but not by enough. So that almost certainly means even higher prices at the pump.