Consumers feeling all the pain of 1982… Bernanke, Paulson prescribe “Doritos” cure…IEA slashes oil demand forecast… Why it still won’t mean a return to $80 oil…As GE goes, so goes the market… What Wall Street is overlooking…A bold gold forecast…and the reason to take it with a grain of salt…Are we in a commodities bubble? Let the debate begin!

— Consumer confidence is at its lowest point this morning since the dark days of the double-dip recession in 1982, when unemployment approached 11%.

The University of Michigan reported its index fell to 63.2 in April — down from an already low 69.5 in March. And a far cry from the 69 most economists expected.

An alternate measure, RBC’s CASH Index — a poll of consumer attitudes and spending by household — fell to 29.5, the lowest since its inception in 2002. A year ago the CASH Index stood at 85.

— As if in preparation, the Treasury secretary and Fed chairman were out in tandem yesterday defending their “Doritos”-style economic stimulus plan: “Spend all you want. We’ll make more…”

“The U.S. economy,” warned Secretary Paulson speaking before the Council of Institutional Investors in Washington, “has turned down sharply. Risks continue to be to the downside.”

But have no fear, he assured his Wall Street constituents: Those $600 rebate checks coming next month from the IRS will make everything just swell again. “We believe that given how they are targeted, that they will make a real difference in the economy.”

The Dynamic Duo: “Spend all you want. We’ll make more…”

— The “financial distress that we are seeing now is among the most severe episodes of the postwar era,” Ben Bernanke acknowledged for his part yesterday. But he stopped short of suggesting the present-day U.S. economy is like the run-up to the Great Depression.

Drawing on his academic studies during his pre-Fed days at Princeton, he told the World Affairs Council that back in the ’30s, the Fed allowed banks to fail, prices to fall and the money supply to contract.

“We now know the lessons from that,” says the helicopter man. “We are certainly going to make sure that the financial system remains in good functioning order.” The part about “regardless what happens to the dollar” was merely implied.

— “Maybe at the end of the third quarter,” Goldman Sachs CEO Lloyd Blankfein said, offering encouragement to his shareholders yesterday, “or the beginning of the fourth.”

The credit crisis is nearing the end he believes, but he makes “no promises” as to how much longer it will last. Lloyd’s football analogy went thud when he said the fourth quarter typically lasts longest. Aren’t they all about 15 minutes each?

Maybe, subliminally, he’s expecting overtime.

— The International Energy Agency slashed its forecast for growth in world oil demand this morning.

As late as January of this year, the IEA saw demand growing by 2 million barrels per day during 2008. Now it expects growth of 1.3 million barrels — its sharpest downward revision since Sept. 11.

But that doesn’t mean a return to $80 oil — yet. The slowing demand in the U.S. and Europe is being usurped by rising demand in China, India and the other emerging markets.

“The case for ‘decoupling’ [of the U.S. from the global economy] has some merit,” says the IEA’s monthly report. “For the first time, a sharp U.S. economic downturn is not expected to cause such significant impact in key emerging countries as in the past.”

“China and India are only beginning to consume oil at any meaningful level,” Chris Mayer points out. Right now, they are consuming oil at a rate the U.S. did in the early years of the 20th century.”

“We don’t need China to start guzzling oil like we do. Even if it moves half the distance between it and Hong Kong, that’s a lot of extra demand. What’s more likely, China stays at 1910 oil usage or moves somewhere closer to, say, 1950s U.S. oil usage? I think the latter.”

Demand will keep going up. And with it, prices will remain high.

— U.S. stock markets opened this morning down over 100-points on earnings from General Electric. GE almost never comes in below analysts’ expectations. Today, it did. GE reported a 6% drop in first-quarter earnings, concentrated in its financial services division.

More interesting to us are the results from GE’s infrastructure arm, which makes up 40% of the company’s earnings. That division’s earnings are up 17%, thanks to continued demand from Asia and the Middle East.

— But what a difference a day makes. Yesterday, traders took good news wherever they could find it. They found it at Wal-Mart and Costco.

The nation’s biggest retailer announced a 0.7% increase in U.S. sales for March. The nation’s biggest warehouse chain recorded a 7% increase. Traders celebrated by sending both the Dow and the S&P 500 up 0.5%.

The rest of the retail sector — the non-discount, non-warehouse species — is a wasteland, especially for those that sell clothing. Limited Brands, Gap and American Eagle all posted greater declines than expected.

Department stores? A disaster. Same-store sales at Kohl’s plunged 16%. Thomson Financial found 17 of 23 retailers missed their sales estimates in March.

— Curiously, Wal-Mart says its two big areas of strength right now are groceries… and big-screen TVs. So people aren’t necessarily giving up discretionary spending; they’re just going down-market to do it. Vizios, not Sonys.

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