Replies to post #100631 on Zeev's Turnips Patch-No Politics (ZEEV)

[mlsoft]

Zeev...

I do not deny at all the beneficial effects of the drop in the price of oil and its effects on the economy. I tend to look at it as a tax cut, but also see that being offset a at least some by tax hikes at the state and local levels. I also think that the economy is considerably worse now than most folks think, and just the drop in the price of crude is not going to be able to turn the economy around either by itself or with the help of relatively mild tax cuts and spending programs.

I look for the economy to level out here at recessionary levels (probably got there last month) for a short time then resume to the downside.

Just my opinion, though.

mlsoft

[SantaCruz]

My uneducated guess is that we need oil to fall below $20 a barrel to really have a significant stimulus on the economy. $26 seems to be about the average price since the bubble burst in the stock market.


This graph is a little hard to read. Historical oil prices:

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=104...

[mish]

These two will prevent us getting back into a recession for few quarters, and the politicos goal is to keep us out of recession until the middle of next year, at least.

Wouldn't they be better off with it NOW?
The middle of next year would be the worst possible time for it I would think.

M

[John R. Haley]

Zeev, I think you may be giving too much weight to the price of crude. Matt Simmons talks about that (and some other very interesting things) in this recent article.

http://www.simmonsco-intl.com/domino/html/research.nsf/DocID...

Best to all,

JRH