No To Oil Prices Ruining U.S. Economy

[Paulie]

I too agree. I'm giving serious consideration to selling my quick selling townhouse and moving closer to school, though I intend to leave there in the next year or two. I drive about 45 miles per day. My intention was to stay put until my youngest had graduated and found a position, then move out of state. I never intended an intermediate move, but it may be necessary.

Kath, you may be better off trying to keep the property if you can somehow manage to afford it. Let the coming inflation eat away at the interest. We probably haven't seen the real estate bottom yet, but there will eventually be a correction and you will gain more value and equity.

I still maintain that people invest a small amount of money in oil. Your returns in this market will offset a lot of your costs at the pump. And if the price of oil makes a continued drop back down, then you simply move your money elsewhere and you'll still naturally be saving at the pump.

I haven't yet seen a credible analysis showing a drop in oil prices anytime soon. We're probably looking at at least $200/bbl by year's end. That's a return of around $70 per share, as of the latest market close. There aren't very many sectors yielding those kinds of returns right now.

 

[jillian]

jillian, I live right at the jersey shore. This weekend was no less travelled than any summer weekend I can remember. Just earlier today, I got caught in a half hour slow crawl in bumper to bumper traffic, on BACK ROADS. I mean, there wasn't a road leaving the shore that wasn't backed up for miles. I've actually never even seen that before. I used to be able to take the back roads, as I know them all in my area, and now the shoobies have figured all of THEM out, too.

If gas prices are hurting people so badly, it sure didn't appear that way THIS weekend. I don't even want to think about how much gas was wasted by the stop-and-go traffic jams this weekend.

Gas can go to $10. People will still waste it.

I can only tell you that I have NEVER had a clear ride to the shore on memorial day weekend. You might have gotten nailed on rte 36, but the highway was flying.

shoobies? lol...

The numbers don't bear out what you're saying. I've heard that travel for teh holiday w/e was off by at least 20%.

The weather was georgous, though!

 

[Annie]

Kath, you may be better off trying to keep the property if you can somehow manage to afford it. Let the coming inflation eat away at the interest. We probably haven't seen the real estate bottom yet, but there will eventually be a correction and you will gain more value and equity.

I still maintain that people invest a small amount of money in oil. Your returns in this market will offset a lot of your costs at the pump. And if the price of oil makes a continued drop back down, then you simply move your money elsewhere and you'll still naturally be saving at the pump.

I haven't yet seen a credible analysis showing a drop in oil prices anytime soon. We're probably looking at at least $200/bbl by year's end. That's a return of around $70 per share, as of the latest market close. There aren't very many sectors yielding those kinds of returns right now.

I don't have the cushion for investments. I don't have a 401k or anything like it. Bottom line, what was a $45 week cost, has jumped to over $95. Add on the increase in groceries and I'm going down.

Luckily my area never did get hit hard on real estate drop, now they are selling nearly as fast as they go on the market, price is where it was 2 years ago, good deal.

 

[Paulie]

I can only tell you that I have NEVER had a clear ride to the shore on memorial day weekend. You might have gotten nailed on rte 36, but the highway was flying.

shoobies? lol...

The numbers don't bear out what you're saying. I've heard that travel for teh holiday w/e was off by at least 20%.

The weather was georgous, though!

Well I've lived at the shore almost all of my life. Statistics mean very little to me when I see it with my own eyes. Parkway, x-way, black horse pike, white horse pike, I'm talking even any significant road with a friggin county number assigned to it was JAMMED. I lived in Ocean City last year, but this year I'm about 5 miles out in the burbs and even THOSE back roads were swamped. I don't know how the hell these city slickers figured out our townie roads, but I was QUITE pissed today.

Yeah, SHOOBIES. You're familiar with the term, I'm sure?

 

[jillian]

Well I've lived at the shore almost all of my life. Statistics mean very little to me when I see it with my own eyes. Parkway, x-way, black horse pike, white horse pike, I'm talking even any significant road with a friggin county number assigned to it was JAMMED. I lived in Ocean City last year, but this year I'm about 5 miles out in the burbs and even THOSE back roads were swamped. I don't know how the hell these city slickers figured out our townie roads, but I was QUITE pissed today.

Yeah, SHOOBIES. You're familiar with the term, I'm sure?

Well, if you don't mind, I'll go with the numbers instead of observations. And given I rode the GSP, I know how long it took me and know how little traffic there was for both the trip down and back. Perhaps today was more crowded, I'm not there today, though.

It's not all that difficult to figure out the backstreets.

I could probably get from Newark to cape may without touching a highway if I'd a mind to.

nope... can't say I know the term shoobie. my family are transplants and i'm still a city slicker.

 

[Paulie]

I don't have the cushion for investments. I don't have a 401k or anything like it. Bottom line, what was a $45 week cost, has jumped to over $95. Add on the increase in groceries and I'm going down.

Luckily my area never did get hit hard on real estate drop, now they are selling nearly as fast as they go on the market, price is where it was 2 years ago, good deal.

Hey, I hear ya. We just downsized our V8 Explorer to a 4-cyl Altima. I hate that we went foreign, but it cuts our fuel costs in half. That, coupled with our recent oil investment and we should be in the black, now.

And if your real estate market is doing that well in your area, than by all means, sell. Is it your only property?

 

[Paulie]

Well, if you don't mind, I'll go with the numbers instead of observations. And given I rode the GSP, I know how long it took me and know how little traffic there was for both the trip down and back. Perhaps today was more crowded, I'm not there today, though.

It's not all that difficult to figure out the backstreets.

I could probably get from Newark to cape may without touching a highway if I'd a mind to.

nope... can't say I know the term shoobie. my family are transplants and i'm still a city slicker.

Well, we get Philly traffic in Cape May County. Ocean County on up normally gets NY traffic. Perhaps NY'ers didn't travel as much as Philly. In any event, it looked about as normal a Memorial Weekend as I've seen.

Shoobie is a derogatory term for tourists to the Jersey Shore. It's derived from many years back, when they would go out and about with their things in shoe boxes. No joke. Today, they can easily be spotted by their sandals with socks, their frequently slow, bad driving, and their apparel that MUST represent their favorite shore town. The slow driving thing is weird to me, though. In Philly, they drive like maniacs. I mean, they have stop signs in Philly, but no one even uses them. They come here, and they'll actually just STOP in the middle of the road while they drive to rubber neck at a property, with absolutely no regard for who's behind them.

 

[BrianH]

I agree with everything you said. It cost me more than $50 to fill my gas tank yesterday. I drove down toward the jersey shore yesterday... no cars. No backup on the Garden State Parkway. Nada.... Same on Saturday. No traffic going either way on the George Washington Bridge???? On Memorial Day Saturday?!?!?!? There's only one reason for that. People can't afford to use the gas. The lack of people traveling affects the owners of the businesses to WHICH people travel. So it's not even just the gas; or the cost of goods; its reduced income to people who are reliant on it, thereby sending those that are marginal into the red.

This is going to place our social fabric at risk if it's not gotten under control.

He's right, the price of rice (IN Texas anyway) has doubled, along with everything else. Any restaurant you eat at, the food has gone up a couple of dollars. If this trend continues, people that commute to work will not be able to commute. My wife and I both work, and we barely scoot by. Others that have further to drive to work will have problems IMO. If we hit an economic collapse because of oil, we'll be living out of home and growing and butchering our own food.....just my prediction if this trend keeps continuing.

 

[Annie]

Hey, I hear ya. We just downsized our V8 Explorer to a 4-cyl Altima. I hate that we went foreign, but it cuts our fuel costs in half. That, coupled with our recent oil investment and we should be in the black, now.

And if your real estate market is doing that well in your area, than by all means, sell. Is it your only property?

Of course it's my only property. In spite of what you seem to have inferred, not all Conservatives are wealthy. I'm not far above poverty level.

 

[jillian]

Of course it's my only property. In spite of what you seem to have inferred, not all Conservatives are wealthy. I'm not far above poverty level.

which is why you voted against your self-interest.

 

[Annie]

which is why you voted against your self-interest.

Actually I think it's in the interests of my children and grandchildren to be able to keep what they earn, with the lessons of sharing of their plenty. It's a matter of perspective Jillian.

 

[jillian]

Actually I think it's in the interests of my children and grandchildren to be able to keep what they earn, with the lessons of sharing of their plenty. It's a matter of perspective Jillian.

But economic policies that benefit only the top 1% of wage earners do NOT benefit your children or allow them to keep more of what they earn. Mismanagment has led to the current circumstances. These people aren't 'conservatives'....no matter what they call themselves. Conservatives don't cut their own taxes while living off of the national credit card. And conservatives...or anyone sane, certainly don't cut taxes during war time.

 

[Annie]

But economic policies that benefit only the top 1% of wage earners do NOT benefit your children or allow them to keep more of what they earn. Mismanagment has led to the current circumstances. These people aren't 'conservatives'....no matter what they call themselves. Conservatives don't cut their own taxes while living off of the national credit card. And conservatives...or anyone sane, certainly doesn't cut taxes during war time.

I'd like for my kids to be in the top 1%. As for voting against your own interests, you've been doing that for a few years, no? You are aware of such, as am I. Again, perspectives and what we think is 'right.'

 

[jillian]

I'd like for my kids to be in the top 1%. As for voting against your own interests, you've been doing that for a few years, no? You are aware of such, as am I. Again, perspectives and what we think is 'right.'

No. We were better money managers. Bill Clinton balanced the budget. As has been shown time and again, the deficit only topped out when Reagan, Bush and Bush were president. That's just one indicia.

I'd like your kids to be top 1% too. But voting for these people isn't going to do it since they also happen to constrict upward mobility.

 

[Paulie]

Of course it's my only property. In spite of what you seem to have inferred, not all Conservatives are wealthy. I'm not far above poverty level.

I never once said anything that should infer me thinking all conservatives are wealthy. I assumed, an honest mistake, that you owned more than 1 property by what you said about your "fast-selling" property. You cleared that up with a later post about how properties sell quick in your area. I thought maybe you owned extra rental real estate, or something to that affect.

If you sell, what will you do? Rent? Than you are still paying a lot of money and getting nothing in return. I rent, but it's a means to an end, wherein I will eventually buy when the time is right. Cashing out your equity and then paying into someone elses isn't always the best idea. You may save per month, but you aren't earning anything towards retirement.

Why not do something like this... Rent your current property to someone else, let THEM build your equity, and you rent somewhere else cheaper for a while? Could you get your mortgage payment in a rental amount in your area?

Even if you couldn't, you could find a rental for yourself that is low enough to even out the deficit in what you would be bringing in on your current property's rent, if that makes sense. For example, your mortgage is $1,800. That's too much for you to afford. If renters would only pay, say $1,500, and you found YOURSELF a rental for $1,000, you would be paying an extra $300 to cover your mortgage, bringing your total output to $1,300/mo. You save $500/mo which should cover your extra fuel and food expenses from the rising costs, and you don't lose your home and the equity you've been building.

Of course those numbers are only an example, and you can substitute them with whatever the numbers would be in your area, and figure out how to save the amount of money per month you'd like to be saving right now.

I hope this helps you.

 

[Zoomie1980]

I'm not quite sure exactly what you base that on. The dollar is being devalued to keep up with the debt burden. It's also being shorted hard on the market, for this reason, which is bringing it down even farther...not to mention being completely dumped for foreign equities. No one wants to be in the Dollar right now, and rightfully so.

Then you have supply diminishing, while demand is increasing. And we may very well be expanding our military escapades into Iran which will UNDOUBTEDLY cause even more of a spike...

I mean, the fundamentals are all there for a continued upwards trend in oil. Look at the USD charts, and the oil charts.

Where exactly are you seeing anything to the contrary?

You need a fundamental re-evaluation of your "fundamentals". The dollar has bottomed and oil has already likely topped. America has fundamentally altered it's habits. The big three can't sell a truck or SUV at any price when they were selling as recently as six months ago. 4 cyl and hybrids are on back order, you simply can't buy them on a lot now. Mass Transit ridership is up over 20% nationwide. Hundreds of thousands of Americans have cancel long road trips. Over 10,000 independent truckers have parked or sold their rigs. Demand is down sharply in the US, Europe and even in India and China.

If you have oil futures, dump it. If you heavy in Euros better start buying dollars. The dollar may NEVER be this cheap ever again, which is why we will see a record number or Euro tourists in the US this year.

 

[Zoomie1980]

I never once said anything that should infer me thinking all conservatives are wealthy. I assumed, an honest mistake, that you owned more than 1 property by what you said about your "fast-selling" property. You cleared that up with a later post about how properties sell quick in your area. I thought maybe you owned extra rental real estate, or something to that affect.

If you sell, what will you do? Rent? Than you are still paying a lot of money and getting nothing in return. I rent, but it's a means to an end, wherein I will eventually buy when the time is right. Cashing out your equity and then paying into someone elses isn't always the best idea. You may save per month, but you aren't earning anything towards retirement.

Why not do something like this... Rent your current property to someone else, let THEM build your equity, and you rent somewhere else cheaper for a while? Could you get your mortgage payment in a rental amount in your area?

Even if you couldn't, you could find a rental for yourself that is low enough to even out the deficit in what you would be bringing in on your current property's rent, if that makes sense. For example, your mortgage is $1,800. That's too much for you to afford. If renters would only pay, say $1,500, and you found YOURSELF a rental for $1,000, you would be paying an extra $300 to cover your mortgage, bringing your total output to $1,300/mo. You save $500/mo which should cover your extra fuel and food expenses from the rising costs, and you don't lose your home and the equity you've been building.

Of course those numbers are only an example, and you can substitute them with whatever the numbers would be in your area, and figure out how to save the amount of money per month you'd like to be saving right now.

I hope this helps you.

This is the best time to buy a house in over a generation and we may not see a buyers market like this for another generation. If you are renter waiting for the right time to buy, this is it. You will not see it this attractive, if you can get a mortgage, again in your lifetime.

Many who own, don't want to be landlords. Renters tend to trash your property more often than not, and if a renter ever called me to fix a pluming or electrical problem in the middle of the night I'd tell them to stick it.

 

[Zoomie1980]

But economic policies that benefit only the top 1% of wage earners do NOT benefit your children or allow them to keep more of what they earn. Mismanagment has led to the current circumstances. These people aren't 'conservatives'....no matter what they call themselves. Conservatives don't cut their own taxes while living off of the national credit card. And conservatives...or anyone sane, certainly don't cut taxes during war time.

How does one cut taxes on a group that essentially doesn't pay taxes? The top 10% pay 72% of all taxes. The bottom HALF, pay only 3% of all taxes.

When you cut taxes that top group that will benifit because they fund the country. Bottom line, there is simply not anything that can be done to "give" middle class anything more. They are maxed out. They (30,000-70,000) pay less than 15% of all taxes so what's to cut for them?

 

[Zoomie1980]

No. We were better money managers. Bill Clinton balanced the budget. As has been shown time and again, the deficit only topped out when Reagan, Bush and Bush were president. That's just one indicia.

I'd like your kids to be top 1% too. But voting for these people isn't going to do it since they also happen to constrict upward mobility.

Clinton's budgets ended up being balanced because of all the income and capital gains tax revenue that came about during the tech centered .com boom. It has ABSOLUTELY NOTHING to do with any fiscal policy on his part. Hell, he had a REPUBLICAN congress for six of his eight years in office and he essentially enacted a SINGLE piece of legislation, a very "republican friendly" welfare reform package that essentially took the deadbeats of this country off their lifetime entitlements.

 

[Toro]

Clinton's budgets ended up being balanced because of all the income and capital gains tax revenue that came about during the tech centered .com boom. It has ABSOLUTELY NOTHING to do with any fiscal policy on his part. Hell, he had a REPUBLICAN congress for six of his eight years in office and he essentially enacted a SINGLE piece of legislation, a very "republican friendly" welfare reform package that essentially took the deadbeats of this country off their lifetime entitlements.

Well, this is somewhat but not entirely true.

It is unlikely that Clinton would have balanced the budget without the tech bubble. Capital gains taxes skyrocketed in 1998 and 1999. It is also fair to say that the Republican Congress also deserved a share of the credit (unlike the bozos in Congress from 2002-2006).

Having said that, to say it had absolutely nothing to do with Clinton's budgets is false. They were Clinton's budgets. Plus, Slick Willie laid to rest the (bizarre) idea that tax increases don't increase revenues and balance the budget. The budget did get balanced because Clinton put the fiscal situation of the country into a place where it could be balanced.

So the credit for the surpluses go to Clinton, the Republican Congress and the tech bubble.

And that is far, far better than the reckless and irresponsible Republican Congress and the Bush administration of this decade, who told us that "deficits don't matter."