Economics: it's the coming down that hurts

So, Lehmann Brothers has been fondled and found unsuitable, and the US Government - which was not happy about the UK government's takeover of Northern Rock, has been forced into taking over Freddie Mac and Fannie Mae, the US equivalent of HBSC and HBOS.

So the good news that lifted markets on Monday was counteracted by the news on Tuesday; and Tuesday's news that oil prices had fallen around a third in recent months was counteracted by news on Wednesday that OPEC has cut production by half a million barrels a day (it says there are now sufficient stocks in the system and demand-for-use is falling rapidly) and that the UK, German and Spanish economies are (as predicted) heading not so much for landfall as for the rocks.Wednesday's news that the USD has strengthened against pretty much all major currencies is being counteracted by .. well, it's only mid morning on Thursday so there's plenty of time. Falling commodity prices, falling shipping rates and even falling food prices (some, limited) are today's good news (for some). What bad news will undo any filip that those figures might encourage?

Well, already today, it's becoming clear that air travel is not going to get cheaper for most travellers. As our Aviation section reported yesterday, passengers booking on Singapore Airlines starting from yesterday would see a small reduction in fuel surcharges. But no other major airline has followed suit: in Australia - where flying is essential for many journeys, Qantas has not responded to calls from across the spectrum to cut the surcharges; in the US, multiple news outlets are this morning (yesterday their time) reporting that US airlines have said they have no plans to reduce the surcharges. With pump prices set to fall, many Americans will question whether to fly or drive for journeys of, say, two to three hundred miles. And BA is quoted in the UK media as saying that its fuel bills will continue to be huge and so it is justified in keeping up surcharges.

So that will dampen any little rise we might see this morning.

It's pathetic: it's drug addicts feeling a little better during rehab, it's withdrawal one snort at a time with small doses of methadone to make it feel less bad.

But don't worry: soon the pain will be over and the dollar will be strong and interest rates will be low - and we can go back on the hard stuff.

And it's only when it all comes crashing down again that we will say "how did that happen?"

The answer is that it always does. And if you are high because everything is cheap but you hold the only thing that's inflating, then you should know that, as soon as you stop sniffing your way to glory it's going to hurt when you crash - and when the stuff that's getting you high runs out, as it surely will, that crash is inevitable.

And no matter how hard that crash, you'll be back on the hard stuff again in a few months, and the cycle will continue.