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2008-11-13 Home Front Economy

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Posted by Steve White 2008-11-13 00:00|| || Front Page|| [11126 views ] Top

#1 Enjoy it while it lasts. I'm betting it won't stay that low for long, especially when the Chinese start ramping up the projects their own "stimulus package" is paying for...

Posted by Ricky bin Ricardo (Abu Babaloo) 2008-11-13 01:10|| 2008-11-13 01:10|| Front Page Top

#2 Home prices in my area are already starting to recover. A friend's home who had dropped over 200K in value according to zillow went up 25K over the past three weeks.

Posted by crosspatch 2008-11-13 01:38|| 2008-11-13 01:38|| Front Page Top

#3 Ah, ok, oil didn't fall because of any "economic concerns". The dollar rose again today. When the dollar rises in value, things traded in dollars fall. Oil went up today if you are paying for it in Euros.

Posted by crosspatch 2008-11-13 02:13|| 2008-11-13 02:13|| Front Page Top

#4 And don't forget that the banks are all lining up to get their cut of the bailout pie since they're not lending money [particularly to their paper fronts they used to speculate on oil just a month or so ago]. If you can't borrow money to speculate, you can't keep the price up either. Market call by natural forces [which should have been done by regulators months ago to avoid a lot of this crap].

Posted by Procopius2k 2008-11-13 07:52|| 2008-11-13 07:52|| Front Page Top

#5 Yeah, the financial companies were buying huge amounts of oil as a hedge. Now that some of them are being liquidated (Lehman, etc) that oil is being sold in the market.

But it is temporary, oil "belongs" about $60-$65 at current supply/demand.

Posted by crosspatch 2008-11-13 11:05|| 2008-11-13 11:05|| Front Page Top

#6 I'm betting it won't stay that low for long

Just long enough to stamp out the competition.

Posted by KBK 2008-11-13 12:42|| 2008-11-13 12:42|| Front Page Top

#7 Oil's fluctuation has clearly been due to more than supply and demand. I don't know what the "real" price of oil is...maybe it is $65 a barrel. If it had stayed at that price, I wonder if we would be writing a $50 bil check to the car companies now. Maybe it would have delayed things a year. Regardless, this is great for folks at the margin and great for the country as a whole.

Posted by remoteman 2008-11-13 15:29|| 2008-11-13 15:29|| Front Page Top

#8 Bloomberg has a story today that futures/options are pricing oil next year at $30/barrel.

Posted by phil_b 2008-11-13 15:29|| 2008-11-13 15:29|| Front Page Top

#9 I can't say I'm terribly surprised by this and I'm sure the same goes for most people who've been paying attention. I'm no "economist" in the Paul Krugman sense of the word (and for that, I'm very thankful), but the exorbitantly high prices from this past summer were simply not sustainable in the long term.

The price of oil, much like the price of real estate for most of the last 7 years, rose quickly on the basis of speculation, by and large. There were few, if any, good rationales behind $150 per barrell oil. At it's height, it was priced at least 30% to 40% higher than the supply and demand would normally dictate. As with any speculative bubble, the speculators blew the bubble up too big until it finally popped. The credit crisis and the following economic downturn have served to exacerbate and accelerate the process and could well extend it out longer than normal.

What goes up must come down. Although how long it will stay down is anyone's guess.

Posted by eltoroverde 2008-11-13 17:39|| 2008-11-13 17:39|| Front Page Top

#10 Operations. Drilling in North American oil and gas fields continues at full speed. During October, operations on American sites involved rig counts ranging from 1,964 to 2,018, 11-13% ahead of the comparable periods in 2007. In Canada the rig counts varied from 431 to 470 and topped the year-ago levels by 30-37%.

Posted by 3dc 2008-11-13 23:31|| 2008-11-13 23:31|| Front Page Top

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