Posted on 12/16/2014 4:56:58 AM PST by thackney
Cratering crude-oil prices may be a blessing to cash-strapped American consumers, but it’s a double-edged sword when it comes to the overall economy.
The problem for the overall economy is not so much the drop in oil prices as it is the velocity at which oil prices have fallen.
The plunge from a peak of just over $100 per barrel in the early summer to today’s $58 — a massive 42 percent drop in just a few short months, most of which has come in the last 90 days — could make anyone’s head spin.
The rapid fall in crude prices is a telling sign to some Wall Street analysts and economists that there may be a global recession taking hold and the slowing growth is pushing oil lower.
Remember, at the height of the financial crisis, crude got down into the high $30s a barrel at the end of 2008 as the US and Europe went into a recession.
But some on Wall Street see pricing forces that go beyond the supply-and-demand model to take in geo-political intrigue.
There will be plenty of Commodity Pool Operators (CPOs) and some hedge-fund managers holding high-yield energy bonds that are taking it on the chin.
And, yes, several of the big banks came out this week saying that while business in general was good, trading revenue will be down from last quarter.
(Excerpt) Read more at nypost.com ...
Where do these people come from? Low oil prices are only bad if they are caused by falling demand.
If the Democrats and GOP-e would open up all that land and offshore space that they closed off in previous decades, then our oil industry could boom at lower prices. The frackers could simply move to offshore rigs or the Front Range, etc.
Weak demand does figure into this price decrease. Millennials are choosing to live in the city and take mass transit.
Not so sure. Where are the growth areas in the US? Silicon Valley? I don't think so. ND, SD, OK, TX, the oil boom states were certainly one of the growth areas in this country.
Not that is going bust, and one of the growth areas in the economy is gone. Plus the defaults on all the lending to the oil and oil service companies. Could be enough to start another big recession. If prices continue to get cheaper, that will be a big clue.
All the lies about economic numbers pushed out by the Obola administration these past 6 years are now coming home to roost.
We are seeing an exact repeat of the orchestrated recession Bush inherited from Clinton.
The price of oil was driven so low in 1999-2000 hundreds of thousands of jobs were lost here in the US and oil producing countries around the world had to pump more just to try and cover the cost of running their countries.
People better get their heads out of their butts and remember the 9/11 attack was an attack against the economy.
There was an orchestrated recession put into play in 1999 and at the same time the terrorist attack against the economy was being planned.
What you describe is white trash/ghetto/low info voter behavior.
A prudent person sees this as an opportunity to save up and prepare for the coming hard times.
So yeah, dumb people will go out and buy/lease a fancy/large car. Smart people will hunker down.
We all know hard times are coming.
bkmk
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