Every time there's weeping on Wall Street, there is dancing at the gas pump along with singing cherubs and heavenly music.
Those heavily-invested in the market are, well, really pissed ... except for those invested in American Airlines which saved five billion in fuel costs last year.
We hear about all this financial catastrophe but Wall Street would have to fall another fifty percent off it's current level to get down to where it was in 2008. The wild talk of crashes is just a wee bit exaggerated.
(Kreskin the All-Seeing: I didn't say it has crashed but the low oil prices mean it probably will crash)
Well, let's see ... would you call it a strong stock market when a weakness in a single commodity price can bring the whole thing down ... or would you call that a stock market which follows the programmer/architect model?
(Kreskin: what model is that?)
You can't see it? I thought you were the all-seeing, Kreskin??
(Kreskin: sorry but I don't read stoner piffle. Please continue.)
Very well. The programmer/architect model goes as follows: if architects built buildings the way programmers write programs, the first woodpecker to come along will destroy civilization.
Therefore, we conclude oil price is the woodpecker and Wall Street is the building which was built by programmers.
(Kreskin: programmers did build Wall Street)
Yes, indeed they did. Enjoy those derivatives, sunshine.
(Kreskin: so do you believe Wall Street will crash?)
It's a buying opportunity regardless because there are only two choices: the market recovers or it crashes so badly the country goes back to breadlines and soup kitchens. If it's the latter, it won't matter if you bought more stock or you didn't. If it does recover then you're golden.
Meanwhile, someone might want to put a lid on CNN with the endless doom and gloom. The sort of thinking they are trying to create moves people to start keeping cash reserves on-hand. With it become more common to keep cash on-hand and it more common for people to be carrying concealed weapons, you have one hell of a bad mix.
CNN isn't trying to inform anyone but rather they hype the situation for effect. Sure the world could it end tomorrow ... but it probably won't.
Those heavily-invested in the market are, well, really pissed ... except for those invested in American Airlines which saved five billion in fuel costs last year.
We hear about all this financial catastrophe but Wall Street would have to fall another fifty percent off it's current level to get down to where it was in 2008. The wild talk of crashes is just a wee bit exaggerated.
(Kreskin the All-Seeing: I didn't say it has crashed but the low oil prices mean it probably will crash)
Well, let's see ... would you call it a strong stock market when a weakness in a single commodity price can bring the whole thing down ... or would you call that a stock market which follows the programmer/architect model?
(Kreskin: what model is that?)
You can't see it? I thought you were the all-seeing, Kreskin??
(Kreskin: sorry but I don't read stoner piffle. Please continue.)
Very well. The programmer/architect model goes as follows: if architects built buildings the way programmers write programs, the first woodpecker to come along will destroy civilization.
Therefore, we conclude oil price is the woodpecker and Wall Street is the building which was built by programmers.
(Kreskin: programmers did build Wall Street)
Yes, indeed they did. Enjoy those derivatives, sunshine.
(Kreskin: so do you believe Wall Street will crash?)
It's a buying opportunity regardless because there are only two choices: the market recovers or it crashes so badly the country goes back to breadlines and soup kitchens. If it's the latter, it won't matter if you bought more stock or you didn't. If it does recover then you're golden.
Meanwhile, someone might want to put a lid on CNN with the endless doom and gloom. The sort of thinking they are trying to create moves people to start keeping cash reserves on-hand. With it become more common to keep cash on-hand and it more common for people to be carrying concealed weapons, you have one hell of a bad mix.
CNN isn't trying to inform anyone but rather they hype the situation for effect. Sure the world could it end tomorrow ... but it probably won't.
9 comments:
I'm not sure you fully understand what's driving either the price of oil down or the market down. You're definitely not understanding the impact oil is having, even in the transportation sector. American Airlines, you say? Yeah, they're down 30% this year.
Oil is way down due to supply and demand. We are WAY oversupplied in oil thanks to the Saudis attempting to cripple the Russian supply to Europe and put the US and Canada shale drillers out of business. But the other side of that equation is demand, and demand is way down. It's that part of the equation that's having the biggest impact on the market. With demand way down in Europe, India, and China, it signals a global economic slowdown that is now being reflected in stock prices.
Oil alone isn't sinking the market. Economic numbers around the globe are. Declines in China's growth, threat of recession in Europe, and excessive strength in the US Dollar (which hurts US companies in Europe and elsewhere)are doing it. Factor in similar reductions in demand for copper, steel, and aluminum, and you have all the warning signs of global recession.
As to Wall Street, this decline directly impacts the 50% of Americans that have 401ks, mutual funds, or stocks. It will soon impact far more as companies begin layoffs in anticipation of the coming recession. (Yes, the "R" word is now being bandied about.)
The economy is far more intertwined than you make it sound. Oil isn't the only factor here. It's one of many factors all pointing to the same conclusion.
Again you show your huge economic IQ. The airlibe stocks are tanking just like everyone else
AA is down 15% over the last 30 days.
Unless the seats are filled the airline doesnt make money. Even if oil is at $10/bbl.
As the economy drops vacationers disappear and business travel is cut back.
But no worries you only paid $20 for a fill up but you lost your job so you dont need to drive anywhere anyhow
Unknown if the seats were full but I haven't flown in years when they weren't so I wouldn't worry too much about that. Either way, they saved five billion they didn't have to spend and didn't cut any flights to do it.
Demand is a whole different problem to solve and tying the drop in oil to the drop in demand hasn't been justified, at least not yet. No chance oil goes up any time soon with Iran coming into the game now and they can push some hefty volume easily. Unknown how much the market really changes because they must have been selling the oil to someone during the sanction time.
It looks to me like the drop in demand is much more related to austerity measures in general than it is to any decline in oil prices. Yep, it seems to me CNN is mixing oil and rhubarb to create a demonic milkshake.
Saving $5B in fuel isnt an increase of $5B in profits if they are not above the minimum seat threshold.
The drop in oil prices have been going on for over a year.
I normally fly 6-8 times a year Mrs Lotho probably 50+
Full flights were the norm at tbe beginning of 2015
Last month the Florida flight was maybe 2/3 full.
It is correct oil is not the only demon is this game. But it is a major player.
As usual Kannafoot lays it out for you to not see again
It's agreeing with him that oil is not the only problem and my contention is absent demand is a bigger problem. I assume that's what crunches China just now as well. Assuming the product is any good, demand is only going to drop if people have no money or if they are scared and won't spend it. More than likely it's the former after so many years of austerity measures.
Looks to me like both of you dance away from the impact of austerity measures. I'm not arguing the fall in oil is bad even if it's a peach at the fuel pump. I do get it with 'disturbing the balance of power' and in this case it's economic power. My concern with CNN is they seem to try to make oil the culprit for the market downturn but you said yourself it's only one part of it.
Chinas use of oil was at an all time high last year.
Austerity programs I dont see them. Auto sales were at 18M last year. And would be continuing to be strong as the average auto is 10 years old.
Oil is just the catalyst. Normally cheap energy ripples through tbe economy and acts like a pay raise. But since the many shale oil producers will go bankrupt the ensuing slowdown could be quite severe.
Housing starts have already started trending down
And december auto sales are heading down.
So it is the fear of a slowdown that will cause the slowdown
The market is just correcting for now. The panic selling isnt there yet. Could easily drop 10-15% more. I dont care because I will buy be happy to buy it lower again
Of course you don't see austerity programs. You have a pile of money in the bank. You will never see an austerity program with any luck.
This country hasnt implemented any austerity program. Unless you talk about each family tighteming thier own belts to reduce personal debt.
The govrrnment is still spending crazy.
It is not defunding pension plans or cutting services to pay its bills.
I am sure countries like Greece Portugal on Venezuela would disagree we are in the middle of austerity programs
Post a Comment