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Senior Contributor

What do you think

The oil glut, the decline of the ruble, Russia on the brink of depression and financial collapse, what lies in store world wide for commodity prices?  Our economy is showing strength but the european economy is hardly healed, but we are apt to see some wounding in the oil patch. Low oil prices are not a boon for residents in Tulsa. Housing starts are strong and prices are excessive but is this just the calm before the storm?

 

How will the collapse affect the buying power of the russians the Iranians and other oil states? Will the export markets sharply decline and how will that impact commodity prices?  Just one more thing to consider as we fret about remaining profitable.

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8 Replies
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Advisor

Re: What do you think

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Advisor

Re: What do you think

Yup. Recession coming. Goto cash
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Senior Contributor

Re: What do you think

Don, folks ought to be feeling better down your way than they have been the last few days. Looks like we're moving higher in crude today, starting earlier this morning. Got word from Al Kluis that he's recommending folks lock in some fuel now. Does that mean oil's hit its bottom at $56 rather than $40 like folks were talking about yesterday? 

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Veteran Advisor

Re: What do you think

China's president Xi Jinping will roll over in bed and say, "Honey stop your bs!!" and Putin will obey.

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Veteran Contributor

Re: What do you think

The number of industries benefiting from low oil prices (Airlines, transportation, etc., some stocks up over 50% in the last few months)  firmly outweighs those that benefit from higher prices (Oil service companies). 

-Vehicle sales are up over 50% from the last major market downturn (2009)

-S&P 500 is off less than .005% from its recent high  

 Not to go into a full blown analysis but the producers will simply absorb these low oil prices like any other major retailer with product gluts (electronics comes to mind). They will need to innovate, cut costs or exit the industry or be absorbed by a competitor.  

 

Some Americans will simply spend all that they make..although I think most are smarter this time around.   If they are saving at the pump and not driving an escalade (or comparable) that disposable income will be spent somewhere. 

 

I don't see any crash in the near future.  Money in the broader markets will just be moved from one industry to the next.  

 

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Honored Advisor

Re: What do you think

Not sure anybody knows for sure.

 

Grains down a third,  crude down by about half.

 

Way too much student debt out there and much of it spent on something without any job prospect.

 

Reduce spending by ag and losses in the petro business, long term debt and something like $7000 high interest credit card debt average per person.

 

Just keep pulling all these threads out of the economy, one of them might be the one that unravel the whole thing.

 

Lots of above average pay jobs in jeopardy or already gone. Hope it doesn't start an avalanche.

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Advisor

Re: What do you think

the next few months might be pretty interesting
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Advisor

Re: What do you think

I can't resist, but will the lower cost of oil somehow lower health care costs??? doubtful. fuel mileage on a lexus(fancy toyota) is pretty good.

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