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	Name:	water_watcher -
	Subject:	Economic Downturn
	Date:	12/18/2008 9:20:55 AM

I would agree that oil put pressure on the economy and we need to do more exploration in the US which will create more stability in the market. But it is still a commodity that is driven by supply and demand and to a lessor extent the value of the US dollar. When oil hit $149 a barrel demand was still strong and the dollar VERY weak. Oil is now down to $39 a barrel and may go lower. That is because demand is falling so fast and the dollar had gotten much stronger. But now we are seeing Opec saying they are going to cut production 2.2 million barrels a day to align supply with the reduced demand. We also see the dollar weakening with the feds going to a 25 basis point target rate for inter bank borrowing.

The pressure oil had on peoples pocketbooks may have contributed to some of the housing problems ... but as many people have written ... that problem was going to happen no matter what. the loose sub prime leading to less than credit worth people drove a housing bubble on prices .... when that burst people started walking away since their mortage balance was higher than the new value. Also, many of these loand were approved with nothing down and teaser rates. When the rates started to adjust people could not afford the new level.

All started to snow ball. The credit crisis is serious and must be addressed. That is why car companies are in trouble too ... people can't get loans to buy cars even if they want them unless they have perfect credit scores and history. Companies were having trouble borrowing which was causing plant shut downs, more layoffs, less demand.

Other messages in this thread:

View Entire Thread

Economic Downturn - Webmaster - 12/18/2008 12:26:32 AM

The Trucking Industry - Webmaster - 12/18/2008 12:32:02 AM

Economic Downturn - wix - 12/18/2008 8:24:43 AM

Economic Downturn - Talullahhound - 12/18/2008 8:48:45 AM

Economic Downturn - water_watcher - 12/18/2008 9:20:55 AM

Economic Downturn - wix - 12/18/2008 10:36:38 PM

Economic Downturn - water_watcher - 12/19/2008 5:40:14 AM

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