Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Don't get the attention/concern for oil pricing? IT is Temporary !, you should be happy and all I see is over concern. WE can not live without oil, the price will be up AGAIN way too soon, enjoy what you have for now, low Gasoline prices among many other consumer products....
TB says: "Don't get the attention/concern for oil pricing?"
Whoa there! As I see it, oil is a major commodity. And commodities constitute an asset class. Stocks constitute another. Bonds another. Real-estate still another. Some go even further and consider things like junk bonds or collectables to be asset classes.
I think any and all of the above are worthy of discussion. (If the S&P fell 55% over six months, there'd be plenty.)
I don't think so either. Those days are long gone. This price collapse is not a normal market reaction. There is some exterior fooling around here. How it will end is subject to opinions like Gundlach and Cramer. We are just in for the ride, good or bad.
Speaking of Cramer, he says happy days are here again based on one day of up markets. I believe nothing he says.
the only thing i think is that it'll overshoot all expectations, just because that's how these things normally play out. have we done that yet? i don't think so. seems to me that $33 is a possibility, if only for the blink of an eye.
Once State and Federal agencies "vote" to raise a higher gas tax onto a gallon of gas we'll be back up above $3-$4 / gallon and then we'll all feel better.
Deflationary cycles often encourage taxing agencies to redistribute consumer cost benefits (temporary deflationary price savings) into permanent tax increases.
These tax increases play a greater role in transferring wealth much like inflation. Some will point to the necessity of these tax increases. Wealth isn't created by only being a successful investor, but by also being a frugal saver. Towns especially need to live within their means. We used to have town meeting to tackle community issues and collectively solve fiscal problems now its all about mill rates and the power of the tax collector.
Its not often that you hear of a taxing agencies that roll back, sunset or otherwise deflate taxes.
So be prepared for some bad news...deflationary commodity pricing doesn't always provide a savings to the little guy.
Hank, its not I don't consider Commodites a worthwhile topic of discussion, but I think a post every hour about one Commodity (a necessity, not pork bellies) and a new off- the- Wall price level $33?, somewhat redundant..and a time waster,(yet, here I stoop) but as Bee would say when Gas gets back to $4.00 you will be happier, and no discussions for $4.10
I don't think so either. Those days are long gone. This price collapse is not a normal market reaction. There is some exterior fooling around here. How it will end is subject to opinions like Gundlach and Cramer. We are just in for the ride, good or bad.
Speaking of Cramer, he says happy days are here again based on one day of up markets. I believe nothing he says.
Gilead dropped 20% to the mid-80's a couple weeks ago. Cramer was saying, "Stay away from Gilead!" Thankfully I ignored him.
Venezuelans Throng Grocery Stores Under Military Protection By Andrew Rosati and Noris Soto Jan 9, 2015 3:08 PM CT Shoppers thronged grocery stores across Caracas today as deepening shortages led the government to put Venezuela’s food distribution under military protection.
Fitch Downgrades Russia to 'BBB-'; Outlook Negative Ratings Endorsement Policy 09 Jan 2015 4:06 PM (EST) Fitch now expects the economy to contract by 4% in 2015, compared with our previous forecast of minus 1.5%, as steep falls in consumption and investment are only partially offset by an improvement in net exports, driven by a sharp drop in imports. Growth may not return until 2017.
Plunging oil prices have exposed the close link between growth and oil prices, notwithstanding the impact of a more flexible exchange rate. For 2015, Fitch is assuming oil prices average USD70/bbl, markedly lower than the USD100/bbl we assumed in July 2014. If the oil price stays well below this, it could precipitate a deeper recession and put further strain on public finances, severely limiting the authorities' room for manoeuvre.
More busted-up highways. More traffic & congestion. More highway fatalities. A boon for tire manufacturers. Increased auto insurance costs - but probably bad news for auto insurers. Higher law enforcement costs. More smog. Crowded summer resorts. Probably less public support for mass transit. Ford's aluminum truck is a New Year's turkey until fuel costs turn up.
And to think we were all excited about Ebola only a few months ago.
The Bloomberg story is something to read. The stores are now controlled by the military. Can martial law be far behind? Meanwhile Argentina's president tells everyone the stores are fully stocked and not to worry. It could get very ugly down there.
@hank And to think we were all excited about Ebola only a few months ago.:) Absolutely Giddy ! Report: December restaurant sales reach 8-year high Low gas prices, rising employment result in robust month Jan 9, 2015Jonathan Maze At $2.17, gas prices are more than $1 below their level of a year ago. A person who uses 60 gallons of gas a month spends $68.34 a month less in gas than a year ago. That’s about the price a family of four might spend for a night out at a casual-dining restaurant.
The other reason for optimism is employment. U.S. employers added 252,000 jobs in December, and the unemployment rate fell to 5.6 percent. Overall, the economy added 2.95 million jobs in 2014 — the largest number of jobs added in a single year since 1999.
People are working, which gives them less time to make food and provides them an income to spend on eating out. They also have more money in their pockets because they’re not spending as much on gas — good reasons for restaurants to be optimistic in 2015.
“Gas prices have probably helped,” Miller said. “(Stock) markets are near all-time highs. The job markets continue to strengthen. All of that is good.”
But..Precious metals rally for the week ? Weekly ETF Gainers / Losers Jan 9 2015, 16:18 ET | By: Jignesh Mehta, SA News Editor Contact this editor with comments or a news tip Gainers: GDXJ +10.1%. GDX +9.45%. SIVR +4.38%. PSLV +4.36%. SLV +4.33%.Losers: BNO -10.72%. OIL -8.93%. FCG -8.18%. USO -8.1%. AMJ -5.43%
Your "guess" was as good as their's ! United Airlines dumps losing hedges, mulls new ones for long term BY JEFFREY DASTIN Fri Jan 9, 2015 7:05pm EST (Reuters) - United Airlines (UAL.N) has paid a premium to dump old losing bets on higher oil prices, and is reviewing its strategy for insulating itself from oil market volatility, in a sign of how some airlines' efforts to hedge their fuel costs have backfired.
The Chicago-based carrier reported Friday that it has shrunk its hedge position to cover 22 percent of the fuel it consumes in 2015, down from the 24 percent it had anticipated when oil prices were higher.
The airline said it did so at a cost, raising its average fuel expenses last quarter to $2.83 per gallon from up to $2.76 per gallon, the price it had estimated on Dec. 8.
This move represents just one step of a broader effort parent company United Continental Holdings Inc has taken to evaluate its fuel hedges, a United spokesman told Reuters.
At stake for United and its rivals are potentially billions of dollars in gains or losses that could flow from what amount to sophisticated bets on the future of oil and jet fuel prices. Guessing wrong could hurt profits and leave an airline vulnerable to competitive pressure from rivals that guess right, and have more cash to spend on new planes or better-appointed airport facilities. http://www.reuters.com/article/2015/01/10/us-ual-fueloil-idUSKBN0KJ00320150110
Interesting story on fuel hedging. This collapse in price caught almost everyone by surprise, including the smart folks at American. That's very unusual. Did anyone predict this a year ago?
Alan Mulally is no dummy. No way Ford would have invested so heavily in infrastructure to bring out an expensive aluminum truck in '15 had they seen this coming.
Supply & demand set the price drop in motion. But market forces have propelled it downward. It's an exaggerated and unsustainable move in my humble opinion.
Cathay Pacific was having an excellent year until the oil prices sank and caught them in the same fuel hedge situation. The airlines take huge risks on these fuel hedges.
Yikes - off 3% this morning. Is anyone holding off on gas purchases? I'm letting the tank run near "E" nowadays - as our gas prices have been falling at least a dime a week. Under $2.00 this morning in parts of northern Michigan. That means it must be nearing $1.50 in the southern part of the state.
Catch - are they giving it away for free yet in the Metro area?
---
A (POLITICAL) GRUMBLE: I thought there was a ballot proposal coming up to raise the Michigan gas tax to repair our crumbling roads and bridges. Nope. I stand corrected. The proposal our #**!! state legislature is placing on the ballot this spring is to raise our 6% sales tax to 7% for that purpose. Sales tax is a very regressive form of taxation. It would hit those hardest least able to afford it. In addition, these are the people who rely more heavily on autos to commute to work and less for pleasure driving. Lower income people tend to drive older less fuel efficient vehicles as well.
There has been some talk of a increase of the federal gas tax. I haven't heard the latest though.
Interesting that Michigan chose the sales tax instead of the gas tax. Maybe they will raise both in the end? Is their gasoline tax devoted strictly to roads? Some states (WA) mix it all together. The roads in Washington are not that great either. Currently the gasoline tax in WA is 60 cents a gallon. http://www.gaspricewatch.com/web_gas_taxes.php
Thanks for the imput. Our conservative dominated legislature tried to raise the gas tax this fall for road repair. Couldn't get it through. Than they tried to remove school funding from the SALES tax paid at the pump (redirecting the $$ to roads) and nearly succeeded. Finally, they threw up their hands in frustration and "passed the buck" to the voters in the form of the ballot proposal. Supporters are praying for a severe spring freeze-thaw cycle to deepen pot-holes and increase chances of passage. Of course, the anti-tax groups from out of state will flood our airwaves with anti-proposal ads. I doubt very much it will pass.
Politics is supposed to resemble sausage being made. But this is something else. Ain't pretty.
Ten days ago, mid state prices were at $1.55 for about 10 hours; then jumped to $2.09 and stayed there until Friday. Today the mid/downstate average is about $1.80, with Lansing area at $1.91. 'Course, as usual the farther north and the higher pricing. Mackinaw City is at $2.29 and Houghton/Hancock at $2.00.
Any tax should be on fuel; paid by the users.........which in this case would also be the many out of state users in the form of tourists and the trucks. A higher fuel tax will not keep the tourists away from visiting the many wonderful areas of Michigan. Also,my best guess, from viewing traffic at various times on I-69 between Canada and Lansing is that about 1/3 of the marked truck traffic is Canadian.
money story: other Day I stopped at my favorite Gas station, gave the clerk$40.00 for Gas fillup the tank only took $32 and change.....She had to give me $7 and change back, that's 20% (better than most of my investments) more money for me to spend elsewhere... multiply that by 52weeks X 2 cars=enjoy the times
Comments
Much higher 3 years out.
John: You need to stay away from CNBC ("Can Never Be Correct").
It's a relevant story at the present. For those who have crystal balls, good luck.
I think even a badly fractured crystal ball would indicate that we're not going to be driving around at 99 cents a gallon. Not for long anyway.
Just my humble opinion.
Whoa there!
As I see it, oil is a major commodity. And commodities constitute an asset class.
Stocks constitute another. Bonds another. Real-estate still another.
Some go even further and consider things like junk bonds or collectables to be asset classes.
I think any and all of the above are worthy of discussion. (If the S&P fell 55% over six months, there'd be plenty.)
Speaking of Cramer, he says happy days are here again based on one day of up markets. I believe nothing he says.
Once State and Federal agencies "vote" to raise a higher gas tax onto a gallon of gas we'll be back up above $3-$4 / gallon and then we'll all feel better.
Deflationary cycles often encourage taxing agencies to redistribute consumer cost benefits (temporary deflationary price savings) into permanent tax increases.
These tax increases play a greater role in transferring wealth much like inflation. Some will point to the necessity of these tax increases. Wealth isn't created by only being a successful investor, but by also being a frugal saver. Towns especially need to live within their means. We used to have town meeting to tackle community issues and collectively solve fiscal problems now its all about mill rates and the power of the tax collector.
Its not often that you hear of a taxing agencies that roll back, sunset or otherwise deflate taxes.
So be prepared for some bad news...deflationary commodity pricing doesn't always provide a savings to the little guy.
but as Bee would say when Gas gets back to $4.00 you will be happier, and no discussions for $4.10
Venezuelans Throng Grocery Stores Under Military Protection
By Andrew Rosati and Noris Soto Jan 9, 2015 3:08 PM CT
Shoppers thronged grocery stores across Caracas today as deepening shortages led the government to put Venezuela’s food distribution under military protection.
Long lines, some stretching for blocks, formed outside grocery stores in the South American country’s capital as residents search for scarce basic items such as detergent and chicken.
http://www.bloomberg.com/news/2015-01-09/venezuelans-throng-grocery-stores-on-military-protection-order.html
Fitch Downgrades Russia to 'BBB-'; Outlook Negative Ratings Endorsement Policy
09 Jan 2015 4:06 PM (EST)
Fitch now expects the economy to contract by 4% in 2015, compared with our previous forecast of minus 1.5%, as steep falls in consumption and investment are only partially offset by an improvement in net exports, driven by a sharp drop in imports. Growth may not return until 2017.
Plunging oil prices have exposed the close link between growth and oil prices, notwithstanding the impact of a more flexible exchange rate. For 2015, Fitch is assuming oil prices average USD70/bbl, markedly lower than the USD100/bbl we assumed in July 2014. If the oil price stays well below this, it could precipitate a deeper recession and put further strain on public finances, severely limiting the authorities' room for manoeuvre.
https://www.fitchratings.com/creditdesk/press_releases/detail.cfm?print=1&pr_id=966815&cm_sp=homepage-_-Featured_Content_Archive-_-Fitch Downgrades Russia to 'BBB-'
More busted-up highways. More traffic & congestion. More highway fatalities. A boon for tire manufacturers. Increased auto insurance costs - but probably bad news for auto insurers. Higher law enforcement costs. More smog. Crowded summer resorts. Probably less public support for mass transit. Ford's aluminum truck is a New Year's turkey until fuel costs turn up.
And to think we were all excited about Ebola only a few months ago.
Absolutely Giddy !
Report: December restaurant sales reach 8-year high
Low gas prices, rising employment result in robust month
Jan 9, 2015Jonathan Maze
At $2.17, gas prices are
more than $1 below their level of a year ago. A person who uses 60 gallons of gas a month spends $68.34 a month less in gas than a year ago. That’s about the price a family of four might spend for a night out at a casual-dining restaurant.
The other reason for optimism is employment. U.S. employers added 252,000 jobs in December, and the unemployment rate fell to 5.6 percent. Overall, the economy added 2.95 million jobs in 2014 — the largest number of jobs added in a single year since 1999.
People are working, which gives them less time to make food and provides them an income to spend on eating out. They also have more money in their pockets because they’re not spending as much on gas — good reasons for restaurants to be optimistic in 2015.
“Gas prices have probably helped,” Miller said. “(Stock) markets are near all-time highs. The job markets continue to strengthen. All of that is good.”
http://nrn.com/millerpulse/report-december-restaurant-sales-reach-8-year-high
Original source:
Restaurant comps ignited off of $2 gas effect
Jan 9 2015, 13:38 ET | By: Clark Schultz, SA News Editor
http://seekingalpha.com/news/2215515-restaurant-comps-ignited-off-of-2-gas-effect
But..Precious metals rally for the week ?
Weekly ETF Gainers / Losers
Jan 9 2015, 16:18 ET | By: Jignesh Mehta, SA News Editor Contact this editor with comments or a news tip
Gainers: GDXJ +10.1%. GDX +9.45%. SIVR +4.38%. PSLV +4.36%. SLV +4.33%.Losers: BNO -10.72%. OIL -8.93%. FCG -8.18%. USO -8.1%. AMJ -5.43%
Your "guess" was as good as their's !
United Airlines dumps losing hedges, mulls new ones for long term
BY JEFFREY DASTIN
Fri Jan 9, 2015 7:05pm EST
(Reuters) - United Airlines (UAL.N) has paid a premium to dump old losing bets on higher oil prices, and is reviewing its strategy for insulating itself from oil market volatility, in a sign of how some airlines' efforts to hedge their fuel costs have backfired.
The Chicago-based carrier reported Friday that it has shrunk its hedge position to cover 22 percent of the fuel it consumes in 2015, down from the 24 percent it had anticipated when oil prices were higher.
The airline said it did so at a cost, raising its average fuel expenses last quarter to $2.83 per gallon from up to $2.76 per gallon, the price it had estimated on Dec. 8.
This move represents just one step of a broader effort parent company United Continental Holdings Inc has taken to evaluate its fuel hedges, a United spokesman told Reuters.
At stake for United and its rivals are potentially billions of dollars in gains or losses that could flow from what amount to sophisticated bets on the future of oil and jet fuel prices. Guessing wrong could hurt profits and leave an airline vulnerable to competitive pressure from rivals that guess right, and have more cash to spend on new planes or better-appointed airport facilities.
http://www.reuters.com/article/2015/01/10/us-ual-fueloil-idUSKBN0KJ00320150110
Alan Mulally is no dummy. No way Ford would have invested so heavily in infrastructure to bring out an expensive aluminum truck in '15 had they seen this coming.
Supply & demand set the price drop in motion. But market forces have propelled it downward. It's an exaggerated and unsustainable move in my humble opinion.
Thanks TSP transfer for all the good research.
Catch - are they giving it away for free yet in the Metro area?
---
A (POLITICAL) GRUMBLE: I thought there was a ballot proposal coming up to raise the Michigan gas tax to repair our crumbling roads and bridges. Nope. I stand corrected. The proposal our #**!! state legislature is placing on the ballot this spring is to raise our 6% sales tax to 7% for that purpose. Sales tax is a very regressive form of taxation. It would hit those hardest least able to afford it. In addition, these are the people who rely more heavily on autos to commute to work and less for pleasure driving. Lower income people tend to drive older less fuel efficient vehicles as well.
End of Rant.
Interesting that Michigan chose the sales tax instead of the gas tax. Maybe they will raise both in the end? Is their gasoline tax devoted strictly to roads? Some states (WA) mix it all together. The roads in Washington are not that great either. Currently the gasoline tax in WA is 60 cents a gallon. http://www.gaspricewatch.com/web_gas_taxes.php
Thanks for the imput. Our conservative dominated legislature tried to raise the gas tax this fall for road repair. Couldn't get it through. Than they tried to remove school funding from the SALES tax paid at the pump (redirecting the $$ to roads) and nearly succeeded. Finally, they threw up their hands in frustration and "passed the buck" to the voters in the form of the ballot proposal. Supporters are praying for a severe spring freeze-thaw cycle to deepen pot-holes and increase chances of passage. Of course, the anti-tax groups from out of state will flood our airwaves with anti-proposal ads. I doubt very much it will pass.
Politics is supposed to resemble sausage being made. But this is something else. Ain't pretty.
Ten days ago, mid state prices were at $1.55 for about 10 hours; then jumped to $2.09 and stayed there until Friday. Today the mid/downstate average is about $1.80, with Lansing area at $1.91. 'Course, as usual the farther north and the higher pricing. Mackinaw City is at $2.29 and Houghton/Hancock at $2.00.
Any tax should be on fuel; paid by the users.........which in this case would also be the many out of state users in the form of tourists and the trucks. A higher fuel tax will not keep the tourists away from visiting the many wonderful areas of Michigan. Also,my best guess, from viewing traffic at various times on I-69 between Canada and Lansing is that about 1/3 of the marked truck traffic is Canadian.
Take care,
Catch
Yes - Great scenic state. Lots of beautiful coastline.
multiply that by 52weeks X 2 cars=enjoy the times
I thought you were going to say she "short-changed" you. That seems to happen to me quite a bit when visiting your state.
I agree filling-up is a pleasure. Wondering when Tooth Fairy & Easter Bunny will appear?