Recession in 2008 ?

[dumpster56]

If oil stays near or heads well above 100 a barrel, and we have gasoline near 5 dollars a barrel next spring I would say a better than 80% chance we head into a recession in the summer months. I keep hearing oh the price is not a problem yea right when the people hit a 100 dollars a fillup for 20 gallons there will be a price to pay economically.

Oh and the reason prices spiked again today was about mexico see link

Business and Financial News - New York Times

That oil field is crashing bigtime and it could be a dry area within 2 years!

 

[youbet]

if we have gasoline near 5 dollars a barrel next spring

I know you mis-spoke and meant $5/gal, but still, I had momentary visions of buying a gas guzzling antique muscle car (convertible) from the 50's or 60's and driving around burning up some of that cheap petro.......!

BTW, gas will indeed be going to $5/gal, and higher, in the next several years. Consumption/person must decrease as supplies shrink and the population of oil consumers worldwide grows. And higher prices are the only way to reduce consumption.

It ain't gona be pretty. But the days of cheap natural resources (not just oil), ours for the plucking, are over. Populations continue to grow. Somethings gotta give.......

 

[haha]

It ain't gona be pretty. But the days of cheap natural resources (not just oil), ours for the plucking, are over. Populations continue to grow. Somethings gotta give.......

Yes; a recession might postpone the adjustment, but there are going to be big changes in daily life here in the US over the next decade or so. We can only pay for so much of this with debt and funny money. So I think we may be buying less of a lot of "discretionary things." Like gasoline.

Ha

 

[Running_Man]

In the long run expensive gas may not hurt us all that much. It might lead to a boon to the smaller car industry. If one were to buy a car that could get 50 mpg you could afford at no cost the same lifestyle as when you had $2.50 gas and a 25 MPG car. Would become a preference of choosing mileage over acceleeration and size.

However, that would be in the long run, the short run a continuation of this runup in energy and decline in the US dollar will be a big negative and throw Fed plan's for saving the banks with cheap rates to the wind.

 

[brewer12345]

.

And how do you propose to get it there? There is for the next 2 years a finite amount of shipping capability. Shipping if you can get a boat for ocean commmodities is now $80-100 per ton. That is why US prices are not going up. I know you know it is almost impossible to get ships for shipment of commodities such as coal and the spot rates on shipping is exploding. That is why the prices in Europe are up, there can be no competition. As the cost per ton to ship to Europe increases the cost per ton in Europe demanded by the coal producers will go up by a like amount as long as there is demand for their product.

The idea that the coal industry could help forstall a recession is illogical to me, and I do not need to be compared to a pig thank you very much.

I'm not expecting arias, but could you at least try a few scales?

As I have repeatedly said, I am using the coal industry as an example, not as the great economic engine that will power the economy forward. You must have known that, but for some reason choose to play games. Oink to you, too.

As for the coal industry, freight costs depend on the distance, and Rochards BAy (S Africa) is a lot further from Rotterdam than Norfolk. Domestic coal prices haven't moved much because the customers are mostly US utilities and the US coal industry isn't really set up to export.

And we haven't even talked about met coal. Wooee, is price going up there all over the world.

 

[Nords]

BTW, gas will indeed be going to $5/gal, and higher, in the next several years. Consumption/person must decrease as supplies shrink and the population of oil consumers worldwide grows. And higher prices are the only way to reduce consumption.

Has anyone seen a study comparing the price of oil to the change in the value of the U.S. dollar? I'm aware that the price of gasoline has nowhere near kept up with U.S. inflation, but I wonder if its price is being further inflated by the dropping dollar.

In other words the price of oil isn't going up-- the value of the dollar is going down. No difference to someone at the gas pump but a big difference to GDP.

I'm not expecting arias, but could you at least try a few scales?

There's no end to this. You're either contending with the proverbial Wall of Worry, or else you're being trolled. You'll be right two-thirds of the time and he'll be right the other half...

 

[Gumby]

And we haven't even talked about met coal. Wooee, is price going up there all over the world.

So what do you think -- time for me to get back into FDG?

 

[Running_Man]

There's no end to this. You're either contending with the proverbial Wall of Worry, or else you're being trolled. You'll be right two-thirds of the time and he'll be right the other half...

Well I'll just go away as I surely do not need the aggravation of posting here but if Brewer is going to claim that the BRICK countries will provide the support to stop a recession and COAL is the example given as a possibility of how it will fostall a recession, I think it is valid to question that logic. To claim it was a type of transaction that in total could in similar ways jump start the US economy is a totally disconnected and illogical arguement. Brewer claimed that people would try to exploit the price differential which I know is impossible from the US. I have reread the posts and I do not see where anything he says other than "I say so and you are a off tune pig looking at a rear-view mirror" that is backing his claim I have never heard elsewhere that the BRICK countries will help pull forward the US from having a recession.

But apparently I am not intellectually gifted enough to understand the finer salient points made so I will have to leave for the http\\singingpigs\arial.com forum to grasp an understanding of the interconnections between the Chinese coal market and other derivative instruments in providing the new lynchpin of the US economy.

Cheers.......

 

[brewer12345]

There's no end to this. You're either contending with the proverbial Wall of Worry, or else you're being trolled. You'll be right two-thirds of the time and he'll be right the other half...

Not only can he not sing, but he has not even a trace of a sense of humor.

 

[brewer12345]

So what do you think -- time for me to get back into FDG?

Hard to tell because it has run quite a bit already. The entire coal world is about wtting itself in anticipation of the upcoming contract talks between the producers and buyers for the year startring 4/1 because the miners know they have the buyers by the short hairs and they are prepared to yank petty hard. You'd have to figure out how much of a 30 or 40% increase in met coal prices is baked into FDG's stock.

 

[Callie]

Warren Buffett feels there is a "fairly significant" chance the US is heading for a recession next year as well. I rebalanced early. My international funds had grown to almost 45% of my portfolio due to growth so I sold off half of them and will leave them in MM until early next year.


Warren Buffett Sees "Fairly Significant" Chance U.S. Going Into Recession - Warren Buffett Watch - MSNBC.com

 

[twaddle]

Warren Buffett feels there is a "fairly significant" chance the US is heading for a recession next year as well.

Oh, great. Another piglet songwriter. Maybe Brewer can teach him how to sing.

 

[d]

R. Kiyosucki's latest summary: "The economy is sinking into a recession ...". case closed

 

[HFWR]

That's ok, I just sold all my stocks, gave back my college degree, and bought five rental houses with no money down...

 

[laurence]

That's ok, I just sold all my stocks, gave back my college degree, and bought five rental houses with no money down...

ROTFLMAO

 

[brewer12345]

That's ok, I just sold all my stocks, gave back my college degree, and bought five rental houses with no money down...

You forgot the steps that involve a lobotomy and gaining 100 pounds.

 

[dmpi]

If the past is any indication, I think the chances are quite high because I'm now 100% in equities.

 

[megacorp-firee]

*Sigh* I will stop trying to teach pigs to sing any day now, I am sure.

Hey Brewer, I used to have a sign with a pig sitting in a mud puddle with the 'pig quote' as a caption... you won't have a copy of that around would ya?

 

[megacorp-firee]

If this is coming at us, wouldn't a good strategy be to load up on international index funds now?

 

[twaddle]

If this is coming at us, wouldn't a good strategy be to load up on international index funds now?

We're not the only ones with a housing bubble.

Personally, I don't know of a good way to play a possible recession other than options. I bought some more QQQQ puts today. I figure the market gets overexcited about a fed funds rate cut, and then it slowly dawns on them that the fed is cutting because we're in trouble....

 

[Alectoris]

So sorry to revive a dead thread, but how do the original responders think about this now?

No negative thoughts, I'm just interested in your thoughts and hindsight as I think that a downturn scenario like this is on the horizon (1-3 year).

 

[Running_Man]

The signs that were obvious in 2007 pointing to a recession in 2008 are nowhere to be found right now. That we are in a record length expansion is clear but in 2007 the housing market was already declining and debt was an obvious drag. There was the dubious idea that it didn't matter because the rest of the world would be great, but in the end it worked the other way around.

Right now it feels that everything is pointing to explosive growth, not a recession. Imminent debt issues have been forestalled, perhaps if a major bankruptcy hit this could all change but I do not see this in the near term.
This could mean bad inflation, but I don't see the signs for a potential recession in the next 15 months as being imminent.

Interesting enough 2007 was the top in US coal production. and prices slid into 2015 but in recent years have jumped again to well above the 2007 prices, this despite the focus on renewables and the major drop in the US for Coal generation of electricity (down about 40% in output KWH)
https://www.eia.gov/todayinenergy/detail.php?id=34992#

 

[corn18]

It's the bullet you don't see that will kill you. I'm sure there is some sort of financial debauchery going on that we don't know about. Won't take much to scare this market down 10%. But as long as there isn't something fundamentally wrong with the companies that make up the S&P 500, it should recover just fine and we can move on with the next bull market.

For now, I am Tweek.