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(Yahoo)   Oil falls to $64, and drags the world's stocks down with it   (finance.yahoo.com ) divider line
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1726 clicks; posted to Business » on 06 Jul 2009 at 9:04 AM (7 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2009-07-06 09:01:15 AM  
The energy stocks, anyway.
 
2009-07-06 09:05:34 AM  
Drill baby, drill.
 
2009-07-06 09:16:23 AM  
This is bad...for Obama.
 
2009-07-06 09:18:52 AM  

BobXXL: Drill baby, drill.


[insert drillcat pic HERE]
 
2009-07-06 09:27:43 AM  
Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.
 
2009-07-06 09:29:53 AM  
Oil falls to $64, and drags the world's stocks down with it

This is bad news, for consumers.
 
2009-07-06 09:30:30 AM  
So if the oil prices rise, stocks drop? And if the oil prices drop, stocks drop? Makes...sense.

/not an economist
//only knows there's no such thing as a free lunch
 
2009-07-06 09:35:23 AM  

rastjr:
It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy.


Let's say that the US sets the price of oil coming in at $50 a barrel. The rest of the world is paying $70 per barrel.

How many barrels of oil will be brought into the US?
 
2009-07-06 09:36:44 AM  
This is a common trend with stocks
 
2009-07-06 09:38:58 AM  
I think it's the other way around.. as in world stocks dragging oil down
 
2009-07-06 09:44:14 AM  
Oil falls to $64, and drags the world's stocks down with it

Yet the price of gasoline stays high. Someone is getting VERY rich here. Let's find them and eat them.
 
2009-07-06 09:44:22 AM  

Ron Mexico's Revenge: rastjr:
It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy.

Let's say that the US sets the price of oil coming in at $50 a barrel. The rest of the world is paying $70 per barrel.

How many barrels of oil will be brought into the US?


If the U.S. were not buying oil at $70 than there would be a glut which would push prices down. Since the U.S. consumes so much oil we have great leverage. What are the Saudis going to do with unsold oil? Swim in it?
 
2009-07-06 09:50:20 AM  
This doesn't directly affect "consumers" (heh) who don't buy crude, and I doubt any investor pays attention to a retard from the AP speculating about a one-day swing. Maybe a day trader. The recession alone is enough to explain a whopping 1% drop in stocks for a given day. TFA isn't aimed at us "consumers", yet anyone affected by either probably has better information than the ramblings of an AP monkey.

What kind of economic news should you pay attention to? YOUR OWN. YOU know if you have a farkin' job or not, including how much it pays. YOU know how much your monthly expenses are. YOU know if you have any savings or not. YOU know how deep in debt you are. And if you don't know any of these to the exact dollar amount, FIND. OUT. NOW. It'll be a million times more relevant to your life than any drivel you see oozing out the ass of some idiot in the AP.
 
2009-07-06 09:50:34 AM  

rastjr: rastjr:

Since the U.S. consumes so much oil we have great leverage.


If that oil was being consumed in jet-skis and snowmobiles, you'd have a point.
 
2009-07-06 09:51:39 AM  

lajimi: Oil falls to $64, and drags the world's stocks down with it

Yet the price of gasoline stays high. Someone is getting VERY rich here. Let's find them and eat them.


Or tar and feather them. Feather stocks are still low. We could make a killing on them.

rastjr: If the U.S. were not buying oil at $70 than there would be a glut which would push prices down. Since the U.S. consumes so much oil we have great leverage. What are the Saudis going to do with unsold oil? Swim in it?


Isn't that what's really happening? America likes cheap oil. America can't really afford expensive oil. And no matter how its cut, the less money Americans have, the less they do stuff, the less gasoline they consume. At this point, the investors are trying to keep oil high so they can pull out of it. And it's going to end badly for them.

Meanwhile, the country is still held in the grip of higher prices and lower wages and trying to counter this by packing the rich's pockets with money that is expected to trickle-down to us. And that's the problem in a nutshell.
 
2009-07-06 09:52:50 AM  

rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.


It is a fear based market and the sheep just react to the noise.
 
2009-07-06 09:54:04 AM  

Leggat: rastjr: rastjr:

Since the U.S. consumes so much oil we have great leverage.

If that oil was being consumed in jet-skis and snowmobiles, you'd have a point.


I guess your point is it is used for essential needs? Well, sure it would slow the economy but people adapt. They always do.
 
2009-07-06 09:55:57 AM  

Another Government Employee: rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.

It is a fear based market and the sheep just react to the noise.



That's the trouble with capitalism. It is a shell game and based on theory and assumption.
 
2009-07-06 10:01:29 AM  
I will take the time to explain because im that nice a guy.

Right now Oil and the stocks are tied together in a mutual movement because of the recession. As oil goes up stocks will go up, as oil goes down stocks will go down. This is the majority of stocks as well NOT JUST energy stocks.

The reason behind this is because the underlying fundamentals of Oil have not changed that put oil up to 150$ when the stock market was up in the 14k's. the ONLY reason that oil went down AT ALL is because of the recession and the worry that there was demand destruction happening. As the economy recovers and people spend more and the world demand returns to their normal ways of Pre-problem 2007 so will oil return to 150$.

So as Oil returns to higher prices you can be certain that the economy is recovering. This will only change when the underlying fundamentals change.

to stop oil from being 150$ a barrel or higher you need the following
- US Demand down PERMANENTLY (Electric Cars,Transport for food)
- WORLD demand down PERMANENTLY (China, Russia, India will make US demand look small in the coming years)
- Oil's use in other products beyond gas down
- Dissolution of OPEC (cartels inflate prices to protect themselves)
- The desire to use renewable energy over commodity or you will just recreate the same situation.
- Cheaper way of Transporting goods to reduce the effect inflation has.
 
2009-07-06 10:02:19 AM  
People are panicky animals. More at 11.
 
2009-07-06 10:03:22 AM  

AttemptedPoet: So if the oil prices rise, stocks drop? And if the oil prices drop, stocks drop? Makes...sense.

/not an economist


Over the short term (weeks/months), stock prices are largely determined by the professional traders acting on the advice of their analysts. Here's how it works in the UK:

- Companies announce results on a Thursday, and brief analysts
- Directors give free lunch to important senior analysts on the Friday.
- Analysts write a report over the weekend, dependent on the quality of the lunch
- Traders read report on Monday morning, and share prices move accordingly.

No, really.

Over the long term, stocks can only really grow with the economy. Here's my graph:

i425.photobucket.com

Stocks were expensive in the 1960s; cheap in the 1980s; obscenely expensive during the tech boom; and are reasonably cheap now.

Although if inflation takes off, another 25% fall in the US stock indices is quite possible.
 
2009-07-06 10:06:43 AM  

poisonedpawn78: As the economy recovers and people spend more and the world demand returns to their normal ways of Pre-problem 2007 so will oil return to 150$.



This is assuming the stock market at 14k was normal, which it was not. It was a bubble economy and the oil price was part of that bubble.

If you look at the price trend of crude and factor out the bubble, you get to about $100
 
2009-07-06 10:07:03 AM  

rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.


Price controls equals scarcity. Eco 101.
 
2009-07-06 10:10:30 AM  

rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.


Oh my look at the historical price for salmon. This needs to be regulated!

Link (new window)
 
2009-07-06 10:11:44 AM  

rastjr: Another Government Employee: rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.

It is a fear based market and the sheep just react to the noise.


That's the trouble with capitalism every economic system. It is a shell game and based on theory and assumption.


FTFY, Commie
 
2009-07-06 10:12:09 AM  

lhinds: rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.

Price controls equals scarcity. Eco 101.



I took econ 101 but the professor was a free market crazy so I didn't pay much attention to him.
 
2009-07-06 10:13:12 AM  

MugzyBrown: rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.

Oh my look at the historical price for salmon. This needs to be regulated!

Link (new window)



Everyone has the right to afford the food we need. What is your point?
 
2009-07-06 10:14:30 AM  

lhinds: rastjr: Another Government Employee: rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.

It is a fear based market and the sheep just react to the noise.


That's the trouble with capitalism every economic system. It is a shell game and based on theory and assumption.

FTFY, Commie


I'm a dyed in the wool liberal. I believe everyone has the right to wealth in our country.
 
2009-07-06 10:14:35 AM  

rastjr: lhinds: rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.

Price controls equals scarcity. Eco 101.


I took econ 101 but the professor was a free market crazy so I didn't pay much attention to him.


You should have and then your posts would be far less stupid than they are today.
 
2009-07-06 10:15:39 AM  

MugzyBrown: poisonedpawn78: As the economy recovers and people spend more and the world demand returns to their normal ways of Pre-problem 2007 so will oil return to 150$.


This is assuming the stock market at 14k was normal, which it was not. It was a bubble economy and the oil price was part of that bubble.

If you look at the price trend of crude and factor out the bubble, you get to about $100



And this trend would probably suggest about a 10k DJI as well. 14k might have been abnormal in the past but going forward you cant say that it wouldnt be normal. Many people suggested the Dow would never hit 1000...

It might take years or even longer than people might expect. It might even happen a lot faster than people expect. Either way its going to happen unless you change the fundamentals of the use of oil as a commodity.
 
2009-07-06 10:20:00 AM  

rastjr: lhinds: rastjr: Another Government Employee: rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.

It is a fear based market and the sheep just react to the noise.


That's the trouble with capitalism every economic system. It is a shell game and based on theory and assumption.

FTFY, Commie

I'm a dyed in the wool liberal. I believe everyone has the right to wealth in our country.


You may be liberal but your comment is naively socialist. Read about The Tragedy of the Commons. It is a simple to understand reasoning as to why socialism aka spreading the wealth does not and cannot work
 
2009-07-06 10:20:10 AM  

MugzyBrown: If you look at the price trend of crude and factor out the bubble, you get to about $100


If you like trending things forwards...

Look at the world volume demand trend (growing a couple of percent each year, recession excepted); and most analysts' belief on how fast OPEC and the oil companies can pump (not much faster than today).

Unless a new Saudi Arabia is discovered in the next five years or so (and it won't be) - you can forget your nice steady price trend. Think more like Mad Max.
 
2009-07-06 10:23:20 AM  

poisonedpawn78: MugzyBrown: poisonedpawn78: As the economy recovers and people spend more and the world demand returns to their normal ways of Pre-problem 2007 so will oil return to 150$.


This is assuming the stock market at 14k was normal, which it was not. It was a bubble economy and the oil price was part of that bubble.

If you look at the price trend of crude and factor out the bubble, you get to about $100


And this trend would probably suggest about a 10k DJI as well. 14k might have been abnormal in the past but going forward you cant say that it wouldnt be normal. Many people suggested the Dow would never hit 1000...

It might take years or even longer than people might expect. It might even happen a lot faster than people expect. Either way its going to happen unless you change the fundamentals of the use of oil as a commodity.


Both of you are forgetting (maybe) that there is an artificial ceiling on availability, which also pushes the price of crude up. Open up drilling and watch the price fall. In this respect oil is like the diamond business. The deBeers' of the world keep the supply tight and the price up.
 
2009-07-06 10:25:17 AM  

lhinds: Open up drilling and watch the price fall.


Go on. Where, exactly?
 
2009-07-06 10:28:08 AM  

lhinds: It is a simple to understand reasoning as to why socialism aka spreading the wealth does not and cannot work


What a farkin idiot

It's been working just fine in Europe for decades now. So why don't you explain how something that you claim can't work has been working for years and years.

While your at it maybe you could explain how america got it's ass kicked in the "Best Place To Live Survey" by most of those socialist countries

http://www.aarpmagazine.org/lifestyle/Articles/a2004-09-22-mag-global.​html
 
2009-07-06 10:29:04 AM  

opiumpoopy: lhinds: Open up drilling and watch the price fall.

Go on. Where, exactly?


Both US coasts, off the Florida gulf coast, ANWAR

In addition increase use of nuclear power doemstically and you can really push demand and price down.
 
2009-07-06 10:29:24 AM  

lhinds: rastjr: lhinds: rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.

Price controls equals scarcity. Eco 101.


I took econ 101 but the professor was a free market crazy so I didn't pay much attention to him.

You should have and then your posts would be far less stupid than they are today.


Just because we disagree doesn't make it stupid. My opinions are just as valid as yours.
 
2009-07-06 10:29:51 AM  

opiumpoopy:
Unless a new Saudi Arabia is discovered in the next five years or so (and it won't be) - you can forget your nice steady price trend. Think more like Mad Max.


I got dibs on that go-kart helicopter thingy.
 
2009-07-06 10:30:31 AM  

lhinds: rastjr: lhinds: rastjr: Another Government Employee: rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.

It is a fear based market and the sheep just react to the noise.


That's the trouble with capitalism every economic system. It is a shell game and based on theory and assumption.

FTFY, Commie

I'm a dyed in the wool liberal. I believe everyone has the right to wealth in our country.

You may be liberal but your comment is naively socialist. Read about The Tragedy of the Commons. It is a simple to understand reasoning as to why socialism aka spreading the wealth does not and cannot work



Thanks but no thanks. I'm pretty sure I know what I need to know about the subject.
 
2009-07-06 10:35:38 AM  
Hey, Bob, you are the farking idiot. Seriously stupid. Clearly, you know zero about Europe and I am not going to waste my time educating you. The Euro model is a failure and that is why they are adopting tax cuts and other traditionally conservative measures in order to get their stagnant economies off the ground. Tell you what, read something about the subject before you call anyone stupid.
 
2009-07-06 10:37:28 AM  

opiumpoopy: AttemptedPoet:

Although if inflation takes off, another 25% fall in the US stock indices is quite possible.


Just curious, if inflation takes off, why would stock prices go down.

...If a company is fundamentally valued the same, and the value of the dollar goes down, shouldn't the companies price 'rise' into equilibrium, not fall...

Course if there's lots of inflation it would signal other things. But if everything else stayed exactly the same, higher inflation should yield higher stock price, right?

Anyone want to rebut/back me up on this?
 
2009-07-06 10:39:14 AM  

rastjr: lhinds: rastjr: lhinds: rastjr: Another Government Employee: rastjr: Is there any other commodity that fluctuates so wildly based on such flimsy reasons?

It seems like the government should set price controls on oil coming into the u.s. since it is so important to our economy. Doesn't New York have rent control apartments? I don't see that much differance.

It is a fear based market and the sheep just react to the noise.


That's the trouble with capitalism every economic system. It is a shell game and based on theory and assumption.

FTFY, Commie

I'm a dyed in the wool liberal. I believe everyone has the right to wealth in our country.

You may be liberal but your comment is naively socialist. Read about The Tragedy of the Commons. It is a simple to understand reasoning as to why socialism aka spreading the wealth does not and cannot work


Thanks but no thanks. I'm pretty sure I know what I need to know about the subject.


Ummm, no you don't or you would not suggest price controls or wealth redistribution as a viable solution to anything.
 
2009-07-06 10:40:45 AM  
Well, that's your opinion. Many people have said that I am quite knowledgable on the subject. Also, I did get a B in the class.
 
2009-07-06 10:42:17 AM  

The Z Spot: opiumpoopy: AttemptedPoet:

Although if inflation takes off, another 25% fall in the US stock indices is quite possible.

Just curious, if inflation takes off, why would stock prices go down.

...If a company is fundamentally valued the same, and the value of the dollar goes down, shouldn't the companies price 'rise' into equilibrium, not fall...

Course if there's lots of inflation it would signal other things. But if everything else stayed exactly the same, higher inflation should yield higher stock price, right?

Anyone want to rebut/back me up on this?


Rapid inflation is an enemy of a rising stock market, but year over year "normal" inflation can result in higher stock prices but it would be relative to everything else and not necessarily worth more.
 
2009-07-06 10:45:13 AM  
>> lhinds - The Euro model is a failure

Notice the lack of any proof.
 
2009-07-06 10:45:29 AM  

Guntram Shatterhand: Meanwhile, the country is still held in the grip of higher prices and lower wages and trying to counter this by packing the rich's pockets with money that is expected to trickle-down to us. And that's the problem in a nutshell.


Yeah I have seen the cost of living continually rise every year. In the past three years since I have been at the job I currently have I have gotten all of 1 50 cent per hour raise. I haven't heard of anyone else here getting raises at all. And I am still at a net loss as this one pays less than the job I had before this one. They can't just continually raise prices everywhere and not pay the peons more. Eventually everything will cost too much and no one can buy anything. Then people will stop caring what something costs and they will begin to just take what they need.
 
2009-07-06 10:49:27 AM  

rastjr: Well, that's your opinion. Many people have said that I am quite knowledgable on the subject. Also, I did get a B in the class.


Do those people have jobs? Look, I went to college (and grad school) too and I once had a head full of theory, but in the practical world where human nature comes into play socialism simply does not work.

Take Italy as an example: One of the higher standards of living in Europe yet they are taxed @ 60% ish. Now they have a rapidly declining birthrate and there are no longer enough people to pay into the system to support all of the social programs. So, they opened up immigration and now are flooded with Africans and Arabs. In the eyes of the Italian government they are new taxpayers, but unfortunately many of these immigrants are coming in for the benefits and further draining the system. So the burden becomes greater for the individual and business.
 
2009-07-06 10:50:22 AM  

Bob16: >> lhinds - The Euro model is a failure

Notice the lack of any proof.


Read the paper, jackass. England, Germany, Italy...it's all there.
 
2009-07-06 10:51:19 AM  
Oh please; if a barrel of oil costs $100 to extract out of the field, then no amount of pleading is going to get the oil companies to extract it when the worldwide value of oil is at $65/barrel. The remaining untapped oil fields are in hard to get locations, or yield oil that costs a lot of money to refine, or require expensive processes to get out of the ground. Companies aren't going to touch them until the price/barrel exceeds the extraction cost.
 
2009-07-06 10:52:30 AM  

lhinds: Bob16: >> lhinds - The Euro model is a failure

Notice the lack of any proof.

Read the paper, jackass. England, Germany, Italy...it's all there.


Oh and do you need to see a reference about the Soviet Union, or on another continent, China's migration to a free-market economic system to survive? All are or were socialist models and all failed or are failing.
 
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