Originally Posted by
Whacker77
I tend to disagree with this statement, but it's hard to argue with it today. I've turned quite bearish in the short term, but I really do think oil will retreat to $100 or less in a few months. If that happens, hopefully the guys about to get furloughed won't. I don't even have a job, but I don't want to see the industry shattered. I've had two interviews cancelled in the last five weeks, but I keep telling myself it will get better! If I say it enough, I might believe it.
Well, with all due your respect I would like to politely disagree and expose my point of view. I think the biggest problem of America right now is thinking that oil prices are going to go down and things will get better. They'll get better, but first they are going to get worst. There's no way oil prices can go down that easely, first because oil prices are up because economics 101 (offer and demand) and only about up to 15% of the price is because speculation, (all that cash poured into commodities). Yes, if speculation would come to a halt, (let say the congress passes the gas pump act or whatever they want to call it) it would help a little bit with the price, but not much. Also, good and bad news, the Federal reserve is done with "artificially" driving interest rates down, that will help with the value of the dollar, thus helping to purchase oil at a lower nominal dollar value, but it'll take some time. Also, as mentioned above, there was a tendency of economic slowdown not related to oil prices entirely, why? well we all know this one. America is in debt. More than ever. At the consumer and corporate level. Artificial money poured into real estate after the bear market of 2000-2001 of the famous dot com, drove real estate prices up and lenders were extremely liberal lending money, more than what average joe could afford. Off course, economy is about much more than those basic facts, but I think we all get the big picture.
My point is, America is going to learn a big lesson, and it's going to hurt. We all need to commit to find new ways of not depending on foreign oil (or anything else) and reduce our personal debt significantely so we can go back and fuel the "american production machine".
I don't need to say how all these things affect air travel, we all know. I also think that coming back to pre 1978 airline regulation is impossible, but the feds could do better with passing anti-predatory prices laws..... i.e. Skybus deals...... we have some serious anti-trust laws in these countries which really work well overall, but we also are in desperate need of "fair regulatory laws".
I'm not trying to be a smart ass, just my point of view. Would like to hear more points of views off course.