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To: Perspective who wrote (17125)	9/11/2000 1:55:28 AM
From: Gary M. Reed	Respond to of 436258

Great article from TheStreet.com: thestreet.com "...We all felt a little sting this summer when gas prices popped. Those of you opting to travel in Panzer tanks (I'm sorry, SUVs) may have had second thoughts about a vehicle with gas tanks larger than the tankers that transport the raw oil. Much political rancor and oil company demonizing ensued, but the din abated as local shortages eased. Unfortunately, oil prices have risen by about 30% in the past couple of months as U.S. inventories have evaporated, and heating oil and natural gas prices have spiked as well. We're just beginning to think about the ramifications of what's transpired. In France, where shortages have led to large-scale protests (keep in mind that they were burning tires in the streets a few years ago when there was talk about moving from a 25- to a 30-hour work week), it's starting to really hurt. In true xenophobic fashion, what does it mean for us? I've been turning to the Wall Street pros for direction on this one. Oh, by the way, these are the same pros who told me oil was going to $15 a barrel when it was at $20, $20 when it was at $25, etc. I'm being told that this oil price rise is actually a very good thing. Here's the logic: Higher oil and energy prices act as a tax, which will dampen consumer spending, which will in turn increase the odds that this $10 trillion beast cruises into that much ballyhooed soft landing. Ignore all you've learned about the truly deleterious economic impacts of previous energy shocks and follow me to that promised land. Might I offer another potential outcome? For starters, it's hard to imagine any outcome, short of a shock-induced recession, that's going to lead to lower interest rates. Bond market participants have heard the call of their equity brethren and priced in more good news than can realistically be expected. Real yields on U.S. Treasuries (gee, what an arcane approach) just don't jibe with reality. That gleeful banter about a cut in short-term interest rates is being proffered by folks who have broken into the sherry. Nothing good here for stocks. Option 2: It's January, well below freezing and the gas meter is moving faster than your ceiling fan. Do you, a) get a second job, b) start burning your dining room furniture, or c) turn down the thermostat so you can afford that cellular phone upgrade? Not a recipe for Nasdaq 5000. Perhaps most disheartening is the fact that higher energy costs really act as a regressive tax: Folks who can least afford it always pay the most. Rest assured, Street analysts with a buy rating on stocks that don't even yet exist won't feel the chill. Barring a miracle, thermal underwear providers should meet or beat the Street's expectations."