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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (13887)	10/22/2004 3:55:00 PM
From: Haim R. Branisteanu	Respond to of 116555

would like to add some comments - AG referred conveniently to the period between 1973 to 1980 when a rise from around $3 to $40 occurred. (I do not know how many on this board remember the recession of 1980/82 or were earning a living then). To witness similar rise as 25/30 years ago from last decade low of around $15 we may need to hit $150. Further it is true that the world is now less dependable on crude oil to generate it's energy needs than in 1980. Add to that the development of financial hedging instruments and long term contracts at pre arranged prices we can conclude that the effect is much less than during the 1980 on world economies. All this said the rise in crude oil has an effect on the non contractual user - e.g. the consumer and will affect it's spending and generate a slowdown. IMHO the bursting of the housing bubble will have a much greater effect on households and the economy as a 25% correction will wipe out something in the range of 4 trillion in perceived wealth and millions of households deep in the red with no chance of salvation from home equity loans. Further stock market valuations are more dangerous as the rise in price of oil (P.S. send it to Heinz)

To: mishedlo who wrote (13887)	10/23/2004 2:17:59 AM
From: TobagoJack	Respond to of 116555

<<oil doubling does not matter>> ... true, but only if everything else also doubles, except debt, in which case oil's rise is actually supremely bullish :0) I am gorged on energy, and its moonshot is a positive occurence, bringing down the relative cost of my daughter's upbringing, making my mood quite cheerful, helping with digestion, improving my sleep cycle, ameliorating the jelly fish itch on my elbow, and ... I think even making my food taste better ;0) USD 100/ barrel, under the circumstances, is too inexpensive. Chugs, Jay