Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: SargeK who wrote (40898)	3/25/1999 10:11:00 PM
From: JungleInvestor	Read Replies (1) \| Respond to of 95453

Excerpt from CNNfn: March 25, 1999: 3:44 p.m. ET NEW YORK (CNNfn) - Fed on the horizon Next week will bring at least a temporary relief to rate-wary investors as the Federal Open Markets Committee (FOMC) is set to meet next Tuesday to discuss the possibility of changing U.S. interest rates. Even though few economists now expect the FOMC to raise rates in the near term, interest fears have paralyzed the Treasury market over the last several weeks, drying up trading activity and inspiring long-term doubts about the desirability of bonds as an investment. Fresh jobless data released Thursday morning by the Labor Department gave bond traders little encouragement, but little unexpected bad news. The number of U.S. citizens filing new unemployment claims last week shrank to 289,000 from 299,000 in the week previous. Although economists had forecast the figure would edge up to 301,000, the unexpected decline only fed already prevalent fears in the bond market that wage inflation, and inflationary forces overall, could be on the rise. FOMC chief Alan Greenspan has made no secret of his interest in the labor market as the weak link in the U.S. economy's struggle against inflation. Should businesses find themselves in increasing competition for workers, they likely will offer higher salaries as an incentive, sending first wages and then prices into an inflationary spiral. Another of Greenspan's bellwethers is commodity prices, particularly the price of crude oil, which has wallowed near 22-year lows amid a long-time global supply glut. So far, low commodity prices have helped fight the specter of inflation, but investors now are steeling themselves for a reversal in the near future. The Organization of Petroleum Exporting Countries (OPEC) set new supply cuts Tuesday, leading many traders to expect crude prices to rise once more -- by staff writer Robert Scott Martin Copyright © 1999 Cable News Network, Inc. ALL RIGHTS RESERVED.

To: SargeK who wrote (40898)	3/25/1999 10:43:00 PM
From: Rob Shilling	Respond to of 95453

Excellent comment Sarge. It is the spin. We have a financial world now where the spin is the important thing. The internet stocks are a great example. Many of them trade at many times the level of real companies with real earnings. I think there has been a big negative "spin" on oil prices for some time. The main agenda is to keep inflation in check and and take all thinking out of investing in U.S. stocks. With gasoline prices below $1 a gallon, nobody has to worry about the "oil factor". IMHO, oil has been priced too low for several years. The evidence is the shrinking gap between supply and demand from 1990 to today. Spin can work and perhaps even win with stocks, but not with commodities. The lower oil prices have caused investment to dry up thanks to lousy returns on investment numbers. The world will have a price to pay in the near future for demigoging oil prices for years. I think manipulation through spin eventually backfires, but it can take a lot of time. In the short term the U.S. has benefitted greatly by the oil prices being so low. But oil is also now an achilles heel for the U.S. The U.S. uses so much oil that any kind of oil shock will shake us to the core. That is the scenario we are facing for essentially talking oil down to boost our economy in the short term.