guno
Gold Member
- Banned
- #1
Normally low gasoline prices would cause people to gas up the RV and or fuel up the SUV and go visit relatives, Yellowstone or just drag the little cherubs around the lake behind the pontoon boat for a couple of weeks. All things that would "juice the economy".
However, these are not normal times. Low energy prices are cutting the throats of domestic producers and lower fuel costs are not prompting people to splurge on a nice vacation, new clothes or anything else.
We have been fishtailing into the guardrail in "slo-mo" for the last several years. The unemployment rate keeps dropping because people are being written off as no longer interested in working or having given up on looking for work. (that would be the labor participation rate)
Anyone that leveraged (bought on credit) a real estate purchase or put money into the stock market, bonds (any bonds municipal, corporate, treasuries or other dollar denominated instrumentation) is going to be taking a bath very quickly.
The mirage of cheap credit and the illusions of assets supported by bankrupt banks is about to implode . There has never been a time in world history when so many vaporous and thinly supported assets were so highly leveraged by so many people....for the benefit of so few.
Cheap energy prices do not correlate with robust investment and or economic health. Not any more. In the past, cheap energy was a prerequisite for expansion and engaging the confidence of the American consumer (who supported 70% of our GDP). Right now cheap energy is asymptomatic of producers desperate selling and cut-throat marketing.
None of the things that caused the depression that began in 2008 have been addressed and none of the deficiencies have been mitigated. In fact, everything is about 2-300% worse now. It would have been painful to fix in 2008. Now it's going to be excruciatingly painful and take a lot longer.
And the oil business is no more prone to the whims of the president than the tides are. All of the people that put the blame on Obama for everything are just looking for easy explanations. this is a structural problem. and given a congress whose sole purpose was to kneecap the president we are looking at the light at the end of the tunnel,but that light is a freight train heading toward us
However, these are not normal times. Low energy prices are cutting the throats of domestic producers and lower fuel costs are not prompting people to splurge on a nice vacation, new clothes or anything else.
We have been fishtailing into the guardrail in "slo-mo" for the last several years. The unemployment rate keeps dropping because people are being written off as no longer interested in working or having given up on looking for work. (that would be the labor participation rate)
Anyone that leveraged (bought on credit) a real estate purchase or put money into the stock market, bonds (any bonds municipal, corporate, treasuries or other dollar denominated instrumentation) is going to be taking a bath very quickly.
The mirage of cheap credit and the illusions of assets supported by bankrupt banks is about to implode . There has never been a time in world history when so many vaporous and thinly supported assets were so highly leveraged by so many people....for the benefit of so few.
Cheap energy prices do not correlate with robust investment and or economic health. Not any more. In the past, cheap energy was a prerequisite for expansion and engaging the confidence of the American consumer (who supported 70% of our GDP). Right now cheap energy is asymptomatic of producers desperate selling and cut-throat marketing.
None of the things that caused the depression that began in 2008 have been addressed and none of the deficiencies have been mitigated. In fact, everything is about 2-300% worse now. It would have been painful to fix in 2008. Now it's going to be excruciatingly painful and take a lot longer.
And the oil business is no more prone to the whims of the president than the tides are. All of the people that put the blame on Obama for everything are just looking for easy explanations. this is a structural problem. and given a congress whose sole purpose was to kneecap the president we are looking at the light at the end of the tunnel,but that light is a freight train heading toward us