kenc wrote:

By this time next year the price of oil will be in to $70-$90 range- a 50% drop from here.
America will be mired in the second year of a recession and the rest of the world is going down with us.
The much ballyhooed economies of India and China are going down the tubes as we speak.
Sales of oil products will plummet with the faltering world economy and the speculators and hedge funds are going to get their a$$ets reamed out.

High prices are their own cure.

Well, kenc, your comments are pretty astute, but where did you ever get the idea that the American economy is in a recession?  A recession is usually defined as two consecutive quarters of negative growth.  There have been slow quarters, but as yet no negative ones.

So the leftist MSM are stuck with phrases like "trembling on the edge of recession," or "probably headed into a recession."  No problem understanding where those dudes are coming from -- "If it's bad news about America, PRINT IT!"  It's been going on so long that most people haven't noticed that the war in Iraq is just about over.

Link

Henry Cate wrote:

...where did you ever get the idea that the American economy is in a recession?  A recession is usually defined as two consecutive quarters of negative growth.  There have been slow quarters, but as yet no negative ones....

Oh Henry honey.  It's a  "slowdown" is when you're neighbor is out of work.  It's a "recession" when you're out of work.  



Yes, you're correct when you're talking about the "technical" definitions.  Just like the press announced last week we were finally officially in a Bear Market since the Dow finally closed down 20% from its high last October.  
Small solace to the shmucks that bought last October.

Anyhow, a good Republican as yourself should know NEVER to trust government statistics, no matter which Party is in control.
They ALL cook the books.

 Here's a site that will warm the cockles of your Right Wing heart.
 
Shadowstats.com

Hmm, I bought the S&P 500 index at 1094, back in October of 2004.  Now it's about 1275.  Guess I'd better go jump out of a window.  It's a bear market, even though my holdings are up around 20 percent.

I believe you'll find that the Real Bear Market is in housing.  But this "Real Bear Market: may simply be a Bubble Collapse.  I remember well noting that a shack in Oakland (I am not exaggerating) was on the market for $375,000.  It has happened in Florida, it has happened in Japan, it's happening now in the good old US of A.

The only real advice I can offer is to try and get a sense of when the bottom has been hit, and then BUY.

Henry Cate wrote:

Hmm, I bought the S&P 500 index at 1094, back in October of 2004.  Now it's about 1275.  Guess I'd better go jump out of a window.  

I certainly would.  4% net per year over four years, without even compounding.  I'd rather have cash under my mattress.

Henry Cate wrote:

Hmm, I bought the S&P 500 index at 1094, back in October of 2004.  Now it's about 1275.  ....

Um....better look again Henry.  It just closed south of 1240 on Friday.

When it comes to one's own money I learned a long time ago to separate economic reality from political bull$hit.

Political functionaries and their media pimps may try to "define" things to confuse the rest of us, but the MARKET is reality.

Usually I agree  with Henry's thoughts but not  this one....  I think he watches too much Fox News.

homintern is on your IGNORE list.

After the explosive bull market around the world and the run up in most of the exchanges,a worldwide reccesion and lower stock market prices should not be surprising.In fact it is a good thing if things can slow down a bit as this overheating in China,and elsewhere is raising prices everyplace.   Over a billion people in China want what everyone wants and they have the savings rate to make it work.  I will agree with Henry on one point,if the U.S started drilling,just that fact would lower oil prices.But we need to start conserving((thought you were a conservative henry) and use alternative energy,something the republicans could care less about(many do not believe global warming is real).   This bear market looks similar to the 2002 bear,maybe a 5 to 10% oversold rally here and then some more pain back down.Hard to find good shorts now,but some nice longs if your willing to hold for a few years.                Certainly dont listen to the mainstream media as they have headline news just as turning points go the other way. My best advice is to buy when fear is greatest(the vix,which measures fear )hits 30 and above,when you yourself are wanting to throw in the towel and sell and run for the hills.Thats when you should be buying,but its easier said than done.   Inflation is the biggest tax of all and the only way the U.S. can pay off its huge debt.

rocket wrote:

After the explosive bull market around the world and the run up in most of the exchanges,a worldwide reccesion and lower stock market prices should not be surprising.In fact it is a good thing if things can slow down a bit as this overheating in China,and elsewhere is raising prices everyplace.   Over a billion people in China want what everyone wants and they have the savings rate to make it work.  I will agree with Henry on one point,if the U.S started drilling,just that fact would lower oil prices.But we need to start conserving((thought you were a conservative henry) and use alternative energy,something the republicans could care less about(many do not believe global warming is real).   This bear market looks similar to the 2002 bear,maybe a 5 to 10% oversold rally here and then some more pain back down.Hard to find good shorts now,but some nice longs if your willing to hold for a few years.                Certainly dont listen to the mainstream media as they have headline news just as turning points go the other way. My best advice is to buy when fear is greatest(the vix,which measures fear )hits 30 and above,when you yourself are wanting to throw in the towel and sell and run for the hills.Thats when you should be buying,but its easier said than done.   Inflation is the biggest tax of all and the only way the U.S. can pay off its huge debt.

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Yes, the US oil companies can drill else where around the world and pollute other countries -IF THERE ARE NO STRICT ENFORCEMENT ON POLLUTING- (look at  Nigeria).   I think the US can allow drilling off shore and up in Alaska as long as the US government strictly enforces safety standards and  other measures to keep  from accidents happening; however, it won't bring the price of oil down(according to some experts) since the price  is based on  speculation....   The problem with the USA, (yes, I am an American), is that they consume 25% of the world's oil.... the world cannot feed other countries with such a large appetite for oil. Even George Bush says that America is addicted to oil.  The only way the US will be able to solve the problem is for the  politicians to quit arguing and get serious about the country  using alternative energy; funding mass transportation; and....(duh) looking beyond their borders to see what other countries have done with this problem (such as France, Sweden, Japan...)  Unfortuantely after WWII when America's economy was booming...and gas was cheap the USA was built based on Americans getting around in their big automobiles -- not on walking or using  a train or bus for transporation.  I'm afraid to say that higher oil prices in the States may be a solution to get serious about using alternative energy and conserving more.

Henry Cate wrote:

.........
Well, kenc, your comments are pretty astute, but where did you ever get the idea that the American economy is in a recession?  A recession is usually defined as two consecutive quarters of negative growth.  There have been slow quarters, but as yet no negative ones. .....

In my understanding, it is a division or unit of the US National Bureau of Economic Research that decides whether the US economy has fallen into a recession but its definition is not two consecutive quarters of negative growth but "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales."  

That definition, coupled with recent events such as the seizure of Indy Mack Bank's assets by Federal regulators, the problems of Fannie Mae and Freddie Mack, and Merrill Lynch's estimated $6 billion second-quarter writedowns  (and more losses to come perhaps),  suggests it is just a matter of time before the US and the rest of the world is officially in a recession.

Henry is correct that technically (by definition - being two consecutive quarters of negative growth), we here in the US are not in an "official" recession.  But, frankly, whatever you call it, the current conditions are worse than any "official" recession in the last 60 years.  We have a strange convergence of factors never seen before:  low (close to negative) growth, very serious inflation (and the official figures do not include food or energy prices - and food prices have gone up over 20% in the last year and energy is just about doubled), a serious mortgage and real estate crisis, a credit crisis somewhat separate from the mortgage crisis (basically, credit card debt defaults where the borrower can no longer cover his credit card debt by wrapping it into a first or subsequent mortgage), a dollar that's fallen for 5 years against most of the world's currencies (although this may have stopped a month or two ago), unemployment rising, the second largest bank failure in US history (with more to come?), the US government having to prop up Fannie Mae and Freddie Mac (and Bear Stearns and god knows how many more before this is over), a bear stock market, and, of course, 6 more months of Bush.
So, while not officially a recession, what we do have is a fucking mess.....

P.S.  There ain't any good news (well, excepting that exports are way up and that is the only thing that's helped us avoid negative growth for 6+ quarters!).

Bob,your correct,we are in a real mess.     But I dont thik the dollar has bottomed as we bail out who knows how many banks.The printing presses are rolling non stop! Also,it looks like gold might break its previous high of just over 1,000,not good news for inflation.    Im wondering if the gold stocks will break out stronly now,as they have been rather weak,even with the high price of gold.        And gold is gaining in other currencies,not just the dollar.This really sucks for ordinary people just trying to survive.or are on fixed incomes. we need to raise taxes here in the U.S to pay for the war,bail out the finacial system,and maybe try paying down our debt. But the greedy Republicans can only think of making tax cuts permanent.

Meanwhile, back in the UK, beer is now cheaper then petrol.

Drink... don't drive.

When did I ever say I was against conserving energy???  I basically agree with Bush right now -- yes, it will take a long time to bring additional capacity on line, but simply announcing that you are going to do it will probably do wonders in the energy market.  Heck, Bush is an oil-man, and knows what he's talking about -- which is only common sense.

I think one of the quick conservation fixes lies in flex-fuel cars.  The car I just bought may not be exactly that, but it doesn't care whether it gets 91 or 95 octane gas, gasohol, or 20 percent ethanol.  More than that, I make most of my trips on a 100-mpg Honda Airblade.

Yes, the American economy has been beset by problems, but there is a big difference between predicting a future recession (sure to be right, sooner or later) and claiming a present recession.

I did some interesting math a few days back, with regard to a scare-mongering Yahoo story about an "epidemic of home foreclosures."  It turns out that 0.06% of American homes had received a foreclosure notice.

Who is to blame?  We must always have someone to blame. ("I blame Bush!")  Certainly not the egalitarians who made red-lining illegal in writing home mortgages, or those who campaigned relentlessly for "The American Dream" belonging to everyone, not just those who can pay for it.

The whole thing reminds me of the S&L fiasco, not so long ago.  Everyone was shouting, "Put your money in gold, and then put it in a mattress."

But gold in a mattress does nothing.