OPEC calls an emergency meeting as oil prices continue to plunge.

OPEC calls an emergency meeting as oil prices continue to plunge.

OPEC calls an emergency meeting as oil prices continue to plunge.

A summary of what's in the major U.S. newspapers.
Oct. 17 2008 6:26 AM

Black Gold Down

The Los Angeles Timesand New York Timeslead with, while the Wall Street Journal fronts, the continuing downward spiral of oil prices, which dropped below $70 a barrel for the first time in 14 months. Some predict oil could fall to as low as $50 a barrel before the end of the year, although that seems unlikely, considering that OPEC has called for an emergency meeting next week. The LAT cites an analyst who says OPEC would like prices to stabilize around $70 a barrel, though the NYT and WSJ say $80 a barrel is more likely. Regardless, either number is quite a change from a few months ago, when some were predicting oil prices would reach $200 a barrel next year.

USA Todayleads with a look at how the recent increase in mortgage rates could put in doubt whether the housing market will improve in the near future. Home buyers have been encouraged by the drop in prices but could be turned off by the higher interest rates. This week, the average interest rate on a 30-year, fixed-rate mortgage soared to 6.46 percent, which essentially amounts to a half-point increase from last week and represents the "biggest weekly jump since 1987." Many are blaming the bailout plan for the jump, although some say it's just temporary and insist rates should drop once the markets calm down a bit. The Washington Postleads with a look at how "countless companies" are adjusting to the credit crisis and what some predict will be a long recession by cutting spending, postponing expansion plans, and looking for "cash-rich partners." The general lack of credit means that hundreds of companies could default on their debt obligations over the next year.

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U.S. consumers can certainly feel the oil-price plunge in their wallets as the average gallon of gas is now more than $1 cheaper than it was during its summer peak. Unless something drastic happens, the decline in oil prices would roughly be equivalent to a multibillion-dollar stimulus package for the economy. The WSJ talks to one analyst who says that if prices stabilize at around $80 a barrel, it would essentially amount to "a $275 billion stimulus package to the U.S. economy." So does that mean SUVs will be making a comeback? Not likely. In fact, few predict the plunge would do much stimulating to the beleaguered economy simply because consumers are likely to use any money they save at the pump to pay bills and prop up battered savings accounts rather than buy new things. Still, as the LAT highlights, any business that depends on petroleum, such as taxis, will most definitely be helped by this plunge.

The drop in oil prices is largely the result of a decrease in demand as economies around the world slow down. U.S. oil demand, for example, is down about 9 percent from a year ago. The WSJ deftly highlights that demand doesn't tell the whole story and attributes at least some of the decline to hedge funds that had been responsible for much of the speculation in the oil markets and are now being hit hard by the credit crisis. The NYT warns that while we may be celebrating the decline now, previous plunges have translated into a decreased investment in oil production.

The WSJ leads its world-wide newsbox with a look at how presidential election polls don't tell a uniform story. The paper's headline, "Surveys Split on Who Has Lead in Presidential Race," isn't quite accurate, since Barack Obama leads all of them. The question is by how much. Some polls say Obama has a 14-point lead, while others put his lead within the margin of error and say John McCain has increased his standing in the last few days. The differences mostly have to do with how each poll counts likely voters. Those that give Obama the widest leads assume there will be a big increase in Democratic voters, as well as a huge hike in the number of young voters. The surveys that show a tight race assume there won't be a big change in the party affiliation of voters this year.

Even if all the polls don't tell the same story, the campaigns are still using them to formulate their strategies for the last couple of weeks (18 days!) before E-Day. McCain's campaign is cutting back on the number of states it is hoping to win and is increasing its focus on states that President Bush won in 2004. The only state that voted Democratic in 2004 that the Republican campaign still hopes to win is Pennsylvania, although even that seems highly unlikely. For his part, Obama is focusing on a number of Republican states, and his campaign said it will increase efforts in West Virginia, which Bush won by a wide margin.

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The LAT fronts a look at how Obama is betting big on Florida—five "of his most senior operatives" will spend the remaining days of the campaign in the Sunshine State. The campaign believes it has added enough Democratic voters to the rolls to win the state but must now focus on getting them all to the polls. Florida Republicans are struggling to keep up. "Obviously, we're not used to being outspent," the state's former GOP chairman said. "This is new. Now we're getting a sense for how the other side has felt."

For its part, the WP off-leads a piece about the campaign under the headline "Virginia Is Unexpected Battleground." Unexpected? Maybe if you haven't picked up a paper in a while. Regardless, the story does provide an interesting look at how the McCain campaign is woefully unprepared for a ground fight in a state that hasn't voted for a Democrat since Lyndon B. Johnson.

Everybody has a story about Joe the Plumber, who became the most sought-after voice on the campaign trail after being mentioned more than two dozen times at the debate Wednesday. But fame has a price. Reporters quickly found out that Samuel Joseph Wurzelbacher owes Ohio $1,182 in back taxes and that he doesn't have a plumber's license. Wurzelbacher insists he doesn't need one because his boss in the two-man operation does, but others aren't so sure. His local plumbing union, which has endorsed Obama, is mad at Joe, saying that he falsely represents himself as a union member.

It also turns out that Joe would probably not be hurt by Obama's tax plan and would very likely get a tax cut, although the amount might be greater under McCain's plan. Even if (Joe made it clear yesterday that it was a big if) he does buy the business from his boss, Al Newell, the company reported sales this year of $100,000, reports the WSJ. "Al runs his business out of the garage that's behind his house," a union official tells the LAT. "It's small." ("Does our heart go out to Al Newell for this intrusion?" asks the LAT in its front-page piece. "Yes, it does.") Even if he does manage to turn the small operation into a $280,000-a-year business (hey, fame has its benefits), he'd have to pay a mere $900 more in taxes, according to the WSJ. "I'm kind of like Britney Spears having a headache," Wurzelbacher said yesterday. "Everybody wants to know about it."

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The WSJ points out that the Bush administration wants a military jury to reconsider its decision to release Osama Bin Laden's former driver on Dec. 31. Prosecutors have filed a motion saying that the military judge had no authority to credit Salim Hamdan for the time he served before the trial. Without this credit, Hamdan could face an extra five years of incarceration. One of Hamdan's lawyers thinks this is just "an effort to postpone the release date into a new administration."

The NYT notes that the major banks passed a "grim milestone" yesterday as all of the combined profits they "earned in recent years have vanished." While more banks report huge losses, it seems increasingly likely that they'll choose to keep any money they get from the government, at least in the short term, instead of using it to get the credit markets moving again, as the Treasury hopes. Most bank executives aren't talking on the record, but the chief executive of Merrill Lynch says that "at least for the next quarter, it's just going to be a cushion."

British Prime Minister Gordon Brown is enjoying his status as world financial leader. He writes an op-ed piece in the Post today and calls for "the boldest of global cooperation" to deal with "the first financial crisis of this new global age." And governments can't afford to just deal with the current crisis, they must "tackle the root causes" and come together to "rebuild our fractured international financial system."

Financial guru Warren Buffett writes an op-ed piece in the NYT and says that he's been busy buying American stocks in his personal account in which he used to hold only U.S. government bonds. "A simple rule dictates my buying," he writes. "Be fearful when others are greedy, and be greedy when others are fearful."

For whatever it's worth, the WP's editorial page endorses Obama today, calling him "the right man for a perilous moment." Expect endorsement season to bring about yet another cavalcade of commentary about whether newspapers should be endorsing candidates in the first place, as there will inevitably be countless howls from readers who will say this proves the paper was in the tank for Obama all along. TP is already yawning.

Daniel Politi has been contributing to Slate since 2004 and wrote the Today’s Papers column from 2006 to 2009. Follow him on Twitter.