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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: Think4Yourself who wrote (61137)	3/1/2000 8:54:00 AM
From: Tomas	Read Replies (1) \| Respond to of 95453

How much should we worry about rising oil prices? The Philadelphia Inquirer, Andrew Cassel Column Knight-Ridder Tribune Business News, March 1 The first answer is, not as much as we used to. True, a barrel of crude may have tripled in price over the last year -- recently topping $30 -- and gasoline may be selling for $1.40 a gallon, up from less than $1. But that's less than meets the eye, assuming that the eye belongs to someone who lived through the oil-shocked 1970s. There are two reasons: First, $30-a-barrel crude today isn't the same as $30-a-barrel crude in 1979. If you adjust for inflation, petroleum prices were much higher at their peaks 20 years ago than they are today. As a matter of fact, $1.40 a gallon today adjusts to around 27 cents in 1967 -- which coincidentally is just about what we paid for gasoline back then. Second, while oil is still a big part of our economy, it isn't as big a part as it used to be. Thanks to OPEC's greed and our own inventiveness, we're a lot more energy-efficient. So while oil consumption has risen almost 20 percent since 1973, the economy has more than doubled in that time. But all this is just a way of keeping Bill Vigrass' question in perspective. Vigrass, a transportation economist with Hill International in Willingboro, wondered in an email if the oil runup will actually help hold down inflation, by "soak(ing) up purchasing power." In other words, will it cut consumers' disposable income and slow down the economy, just as Federal Reserve chairman Alan Greenspan says we must to keep the current good times going? That's not how most people intuitively see it, of course. The average Joe or Jane sees prices for gasoline, airline tickets and a host of other oil-dependent services rising, and concludes that there's more inflation, not less. But Vigrass is on to something. Properly defined, "inflation" doesn't mean merely that some prices are rising, but that essentially all of them are -- because the value of money is falling. In the words of Uncle Miltie (that's Nobel economist Milton Friedman to you), inflation is "always and everywhere a monetary phenomenon" -- i.e., too much money chasing too few goods and services. The most famous inflations resulted from governments, such as Germany's in the 1920s, printing money without restraint. It wasn't because some product or commodity -- even an important one, such as oil -- became scarce or expensive. Controlling inflation means keeping the supply of money in line with the supply of everything else -- oil, houses, microchips, manicures -- that the economy produces. This is obviously not a simple matter. In the old days, it was done by linking money to something tangible and finite, typically gold. Now it's done by the Fed nudging interest rates -- which represent the price of money -- up and down. It's still an inexact science, however. And when the economy is stressed -- say, by an Asian financial crisis, or a sudden rise in the price of oil -- it can get especially ticklish. Not only does the Fed have to interpret fast-changing data describing credit flows, industrial capacity and the like, it also must work around politics and popular expectations. Already we've seen independent truckers jamming Washington roads to demand government help, and a variety of politicians have proposed interfering in the oil market one way or another. Similar panic attacks in the 1970s led to price controls and other federal measures that simply prolonged and worsened the crisis. In the long run, it's very likely that oil prices will come down again, only to rise again as world markets continue their cycles. If Americans adjust their spending and oil consumption accordingly, then as Vigrass suggests, the result won't be inflation.

To: Think4Yourself who wrote (61137)	3/1/2000 9:03:00 AM
From: SliderOnTheBlack	Read Replies (2) \| Respond to of 95453

"Q" - why is Lehman's upgrade a negative ? ... I think when we have seen periods of upgrades in the past "after" strong sector moves - those were negatives (agreed !) because they tended to set up opportunities for Institutions to sell into. But, not here imo. This is "BUY" territory ! This is only the beginning. Even FGH may become a "deadRAT" bounce play once again - "after" it finds its "true" bottom ($3ish ?) ...he he ~ Doug - You've got to get a picture of yourself at the wheel of the former "Valdez" with a bottle of Wild Turkey in your hand and the captains hat on your head (VBG)...