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01-11-2016, 11:50 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Apr 2011
Location: Madison
Posts: 1,337
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Positives of low oil
As oil hits new lows the stock market is sinking. But isn't cheap energy a stimulus? If everyday people have more money in their pockets after filling their vehicles, won't they eventually spend it? And won't that create more profits for companies?
Seems to me there is more good to low oil prices than bad.
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Wild Bill shoulda taken more out of his IRA when he could have. . . .
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01-11-2016, 12:05 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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Quote:
Originally Posted by dtbach
As oil hits new lows the stock market is sinking. But isn't cheap energy a stimulus? If everyday people have more money in their pockets after filling their vehicles, won't they eventually spend it? And won't that create more profits for companies?
Seems to me there is more good to low oil prices than bad.
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I think the strong dollar is hurting a lot of companies that export goods, especially to canada
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You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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01-11-2016, 12:23 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Jun 2014
Posts: 1,069
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When oil goes up, the market falls. When oil goes down, the market falls.
Stability is better than uncertainty, big moves cause many people (especially speculators) to pull their money out and reevaluate.
Also, Stimulating the economy is not the same thing as stimulating the market valuations. At least in the short term.
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01-11-2016, 12:29 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Jul 2005
Posts: 2,223
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Airline and trucking companies just lovin it.
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01-11-2016, 12:36 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 1,561
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It's a small positive for me when I go to fill up my Escape.
Unfortunately for me, I own kinder morgan stock.
nuff said
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01-11-2016, 12:50 PM
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#7
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Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,727
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Quote:
Originally Posted by ownyourfuture
It's a small positive for me when I go to fill up my Escape.
Unfortunately for me, I own kinder morgan stock.
nuff said
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Hey, they are still paying a dividend!
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*********Go Yankees!*********
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01-11-2016, 12:56 PM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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Quote:
Originally Posted by Lakewood90712
Airline and trucking companies just lovin it.
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Yea, air fares are dirt cheap!
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01-11-2016, 12:59 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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airlines also hedge fuel prices so they are probably making up for the worthless options they purchased, my guess anyway
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You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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01-11-2016, 01:56 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Apr 2011
Location: Madison
Posts: 1,337
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Quote:
Originally Posted by dallas27
When oil goes up, the market falls. When oil goes down, the market falls.
Stability is better than uncertainty, big moves cause many people (especially speculators) to pull their money out and reevaluate.
Also, Stimulating the economy is not the same thing as stimulating the market valuations. At least in the short term.
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Short term yes, but long term, low energy prices would seem to be good for the economy.
__________________
Wild Bill shoulda taken more out of his IRA when he could have. . . .
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01-11-2016, 02:39 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2015
Location: Michigan
Posts: 5,003
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I agree that there are many benefits to many players with low oil prices. Here is what I see as the downside, as it pertains to equity markets. Low oil (and nat gas) prices lead to reduced earnings for energy companies, which make up a sizable portion of the market, so their stocks fall. These low prices also dampen activity to search for and extract the energy. These activities and the hardware/services to support them are also important to economic activity. Lastly, oil prices are seen as a partial proxy for worldwide economic activity in general. When oil prices are low/falling, it is seen as a sign of economic weakness which as a rule is bad for business, profits, and therefore equity prices.
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"The mountains are calling, and I must go." John Muir
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01-11-2016, 02:41 PM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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Quote:
Originally Posted by ownyourfuture
It's a small positive for me when I go to fill up my Escape.
Unfortunately for me, I own kinder morgan stock.
nuff said
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I think a lot of people have had the gas savings swallowed up by something before they got the extra cash in their pocket. I maybe am saving $75 in gas. Health insurance up $250 in past 12 months and internet/cable up $15. So that alone swallowed up my ability to contribute more to the economy with my gas savings.
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01-11-2016, 02:43 PM
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#13
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Moderator
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 25,340
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On the plus side, gasoline here just fell to below $2/gallon.
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When I was a kid I wanted to be older. This is not what I expected.
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01-11-2016, 02:56 PM
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#14
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,259
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The problem is those darn Millenials who are not falling for the work harder, earn more money, spend more money, borrow even more money, then work even longer and harder, and be in debt for the rest of your life paying more and more interest. These young upstarts are actually paying off debt and freeing themselves from the chains of debt and over consumption.
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Comparison is the thief of joy
The worst decisions are usually made in times of anger and impatience.
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01-11-2016, 03:00 PM
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#15
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Thinks s/he gets paid by the post
Join Date: Apr 2011
Location: Madison
Posts: 1,337
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Low oil prices however would seem to eventually help Europe and Asia (i.e. Japan, China and Korea) that don't have internal supply to rebound from their sluggish economies. In the short term there will be pain, but in the longer term this should be a blessing.
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Wild Bill shoulda taken more out of his IRA when he could have. . . .
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01-11-2016, 03:07 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by ownyourfuture
It's a small positive for me when I go to fill up my Escape...
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Pfftt... It's a big positive for me when I fill up my gas-guzzling RV. At 9 mpg, one time in a long travel day I had to refuel in the morning and in the evening too. And this was in California, the land of the $4/gal gas back then. Oh man, it hurt to no end.
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"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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01-11-2016, 07:57 PM
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#17
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2008
Posts: 6,506
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I filled up my car's tank today. Did not look at the price.
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There must be moderation in everything, including moderation.
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01-11-2016, 09:24 PM
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#18
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 17,093
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Quote:
Originally Posted by dtbach
Low oil prices however would seem to eventually help Europe and Asia (i.e. Japan, China and Korea) that don't have internal supply to rebound from their sluggish economies. In the short term there will be pain, but in the longer term this should be a blessing.
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Yes, but its very much tempered by the fact that approx 25% of the "decrease" in oil price you see, is really the USD becoming stronger than other currencies.
So the US folks see a huge drop in oil prices.
So if you live in Korea you don't see such a big drop in the oil price as the WON has decreased in value compared to the USD (and oil is sold in USD).
Same in Canada, since the CDN went down about 30% to the USD, they are not seeing the big drop in oil prices.
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01-11-2016, 09:32 PM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2012
Location: Seattle
Posts: 6,023
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I saved $25 filling up our truck last week and lost $25,000 last week with the market drop. I would rather have paid $50 and kept the $25,000.
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01-11-2016, 10:41 PM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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I wish I lost only $25K since the beginning of year. And I just filled up my car; it took but $18 total. To save more with cheap gas, I would need to take my RV on a trip, and there's nowhere to go in the winter.
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"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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