Where will the next price implosion be? Oil has fallen off a cliff, What industry is next?

American Thinker ^ | 01/14/2015 | James Longstreet

[SeekAndFind]

We have witnessed the price implosion of oil, and the subsequent decline in gasoline prices. Is this the beginning of a trend, and what industry will admit and be subject to an inability to control its pricing structure?

Cable television? The cost of cable television is a broken promise. Originally, for those old enough to remember, the promise of cable television was that though it may involve a charge, something new for television, there would be no commercials. Anyone remember? Now, the cable providers have it both ways. There are commercials, and infomercials, on which they receive money from not only the viewer / buyer of their service but also the marketing department that buys the air time for the commercial. Nice move.

Is cable the next industry to lose their ability to hold their prices? Add in the nonsense that one must pay for programming one never watches rather than being allowed to choose what they watch and pay for.

The cable companies attempt to stave off this pricing fragility by providing more product for the same price. But even this is finite, as is the ability of the customer to utilize the mountain of bad movies, for example. How many more pawn shop shows, cup cake contests, and minor league sporting events are necessary, or desired?

Or, will it be the cell phone service provider to next lose its ability to hold their prices?

The complexity of the phone bills, the monthly taxes and usage charges, the two year contract trick, and the roll over minutes are all camouflage that befuddles the customer.

Complexities create a surrendering consumer that ends up signing fine print legal mumbo jumbo and locking oneself into multi year obligations.

[Mouton]

The democommies seem compelled to look at the drug companies now.

[gorush]

Let’s see, we booted the tube 86 months ago, saving roughly $80.00/mo...that’s approximately $7000 saved, roughly $1000/yr. Granted, I’ve missed a lot of campaign ads and commercials and I need to add a pittance for Netflix charges.

[Red Badger]

THE HEALTH INSURANCE INDUSTRY..................

[Red Badger]

I’ve missed a lot of campaign ads and commercials

THEY WILL BE ON YOUR CELL PHONE NEXT..........

[crusty old prospector]

Show me another domestic industry where foreign entities can manipulate the price of the product and drive it down 50% in six months.

[Mich Patriot]

Same thing with satellite radio...pay a fee and still listen to endless commercials.

[txrefugee]

Banking survives only because of the Federal Reserve’s boundless authority to print money. Of course, when one shops for hamburger at $5/lb. and bread at $3/loaf, money doesn’t buy much these days.

[Fightin Whitey]

Same thing with satellite radio...

Yeah but where else can you buy your own oil well?

Or an insurance policy from BIG LOU??

lol

[rarestia]

Didn’t the same thing happen to the steel industry back in the 1950s and 1960s?

I’m hoping for gold to crater, but I realize that’s not likely given the strength of commodities.

[Fiji Hill]

Same thing with satellite radio...

Yeah but where else can you buy your own oil well?

Or an insurance policy from BIG LOU??

You obviously listen to The Patriot. At least the music stations I listen to are commercial-free.

[precisionshootist]

"Show me another domestic industry where foreign entities can manipulate the price of the product and drive it down 50% in six months."

bingo! This is all about predatory pricing from OPEC which we should have put an end to a long time ago by protecting our domestic producers.

Now our government, which has protected OPECs ability to control the price of oil for decades is desperately looking for a way to increase the price of fuel at the pump.

Why? Because low fuel prices are putting money(read financial independence) back in the pockets of the people.

It's the old union strategy. Make up a crisis to cause a strike to prevent their "constituents" from accumulating enough money to be independent of the union. The strike, like high fuel prices, keeps the masses down.

[Redbob]

I remember when cable was something you got when you lived too far from a big city to get broadcast...

[Usagi_yo]

Sometimes I think of the low price of gas these days and think ... ‘this is the fattening’ that comes before the slaughtering.

But ...

Low Energy costs boost the earnings of all American’s and all industries ... unless your industry happens to be oil and gas.

If I were still 30 and driving 45 minutes to and from work a day this would save me a fortune.

It doesn’t really take an economist to see that if left alone, the price of gas will stabilize to some point above and beyond the cost of producing it.

And it doesn’t take a military genius to see that this is an economic war targeted at Russia and a force multiplier against Iran and Venezuela type countries.

[Bon mots]

And it doesn’t take a military genius to see that this is an economic war targeted at Russia and a force multiplier against Iran and Venezuela type countries.

No.
I disagree.
It is due to a 1-2-3 punch:

1. Advances in technology that have enabled us to capitalize on fossil fuels that were previously unexploitable - shale oil, shale gas, etc.
2. Renewables increasing market share
3. Consumer conservation and lower demand

On the Supply Side
Horizontal drilling, hydraulic fracturing, coal bed methane, shale gas, shale oil - when the price is high enough, these resources are able to be exploited profitably.

There has also been a lot of investment in green energy - granted, a lot of them were smoke and mirrors, but windmills and solar also produce a lot more energy than before.

A drive through Spain is spoiled by the view of thousands upon thousands of windmills - each of which 'costs' some desert kingdom countless barrels of oil.

On the Demand Side
There have also been huge innovations on the demand side - the switchover to LED lighting, LED televisions, more efficient appliances have reduced demand.

Finally, there is lower demand from more efficient automobiles, more efficient homes, more efficient lighting as well as an overall decrease in economic activity since 2007/8.

Don't buy into the favorite arguments of the dictators' - of economic warfare aimed at them. Not at all true.

[Bon mots]

Another factor...
The switchover from cathode ray televisions and computers to flat screens and LED/LCD.

Flat screens nowadays consume 60% less electricity than cathode ray tubes.

Multiply that times 122 million households - many of which have multiple computers and televisions - at least one screen in each household - and it adds up too!

Screen Size	LED	LCD	CRT	Plasma
15 inches	15	18	65	---
17 inches	18	20	75	---
19 inches	20	22	80	---
20 inches	24	26	90	---
21 inches	26	30	100	---
22 inches	30	40	110	---
24 inches	40	50	120	---
30 inches	50	60	---	150
32 inches	55	70	---	160
37 inches	60	80	---	180
42 inches	80	120	---	220
50 inches	100	150	---	300

* Results may vary significantly, results assume displays are calibrated for energy saving performance.

[nascarnation]

Very good post.
Demand is set on the margins, and we’ve been doing a lot of small things to work on the margins.

[puppypusher]

Yea!but at least you get the music channels commercial free.

[oldtech]

television showed a possibility of a lot of promise when it started out;little of which has been realized. Being on DISH,I am now deprived of my news channel,but I get about 235 channels showing up on the screen. Of this,many are pay channels,duplications,other worthless crap. All in all,about a half-dozen that are even watched,but I have to buy the package & now lose one of the main ones I always watched. I don’t see how they could possibly summon up the nerve to want more money for the package.

[Mouton]

war targeted at Russia and a force multiplier against Iran and Venezuela type countries.

It is a MIRV attack and one of the principal targets is the US shale producers. Right now, the world produces about 2 million barrels a day over consumption. The US has become the swing producer due to its rapid increase over the past few years (no help from his excellency btw). Those shale producers which are over leveraged will get killed, their assets will flow to the well capitalized like most of the majors and that will be that. Could take a few years at most but it will happen.