One goes up, one goes down

An unacknowledged fact of world economics is the role of command or planning mechanisms in what is held to be a global market economy. J.K. Galbraith raised the point that large companies are in a sense planned economies within their walls, with technical and commercial decisions made by management, wage and pricing structures determined either managerially or by negotiation with trade unions, and the whole enforced through targeting and budgeting exercises.

Hence, China announces a cut in petrol prices, presumably passing-on some of the $20 drop in the oil price since the summer of 2006, or perhaps trying to supply-manage inflation. Sometimes, though, decisions driven by nonmarket procedures can be just as quick as market ones..

Iran, Venezuela and other oil exporters are lobbying for an OPEC production cut. I think Jerome of Eurotrib suggested that the Saudis were targeting US stock levels. Here is, perhaps, another interesting indicator.