[peaker_2005]

Nothing. The MSM will be pointing out that the inflation-adjusted high of $110 hasn't yet been broken.



Of course, that number keeps moving upward with the oil price...

[Jack]

Doly, the problem is that the experts have been saying - for years, actually - that the market is badly overpriced. Dividend yields are low, price-earnings ratios high. We are due for lower prices. For a much more extensive discussion of that view, you might wish to look at "Bullseye Investing" by Mauldin. One might conclude that this sets us up for a sharp decline - perhaps. But the psychology doesn't seem quite right. Not yet.

Another view is presented by Leeb in his books on the market vs. oil prices. As I recall, his litmus test was an increase of 80% in crude prices over 12 months - his studies suggests that this triggers a decline. (The Oil Factor: Protect Yourself and Profit from the Coming Energy Crisis by Stephen Leeb and Donna Leeb)

I notice that we have an inverted yield curve (short term interest rates greater than long term interest rates) which has, historically, suggested recession. The market will probably like a recession, since that would dissuade the fed from raising interest rates further.

So, my take....oil stocks will go up a little, the market will stay in a trading range, perhaps going a bit lower through November's elections.

[whereagles]

Nothing will happen. A few minor tweaks here and there and it all goes on in "business as usual" fashion.

[green_achers]

Unless the price spikes suddenly as a result of some crisis, there will be little change the day it hits that price. Some profits will be made out of unsuspecting fools who actually react to the news, but the major adjustments will be made in advance as the price nears the big fat, round number.

[Fergus]

$this->bbcode_second_pass_quote('green_achers', 'U')nless the price spikes suddenly as a result of some crisis, there will be little change the day it hits that price. Some profits will be made out of unsuspecting fools who actually react to the news, but the major adjustments will be made in advance as the price nears the big fat, round number.

[venky]

There are already reports of the US economy slowing down or going to this year or the next. That is to be expected after almost 5 years of growth, the price of oil must be having some impact also.

I think $100 oil will just make it more pronounced.

[mekrob]

I'll jump up and down as my oil-trading (generous) uncle just made 10 million more dollars.

[evilgenius]

I'll hope that finally it will lead to development in the Joint Development Zone off the West African Coast between Sao Tome and Principe and Nigeria. I have penny stocks there that will go through the roof.

[Vexed]

There will be a lot of monkeys flying out of butts.

[Windmills]

Given that oil is so critical to so many economic activities, the prices of a great many goods and services are going to continue to rise. I'm not sure what the Fed can do about that type of inflation. The result will be continued pain for the stock market and the automotive and housing industries, among many, as well as everyone else that's plugged into the economy.

The rising price of oil supposedly makes economical the alternatives to oil-based energy and goods. There are estimates for the prices at which these things are thought to happen. I am very curious to see estimates about the flip side of this coin: at what prices do we see businesses start to be destroyed? At which price of gasoline do delivery services become uneconomical, such as flowers, pizza, and so forth? What price of fuel will cause all airlines to lose money (if that isn't already happening)? When will truckers start to lose money? tourism? fishing? It'd be fascinating to see a long list of various businesses and the points at which they are no longer profitable due to fuel costs.

[SoothSayer]

It'd be fascinating to see a long list of various businesses and the points at which they are no longer profitable due to fuel costs.

This should be highlighted as a very key question .. why not start a new thread?

On second thoughts, don't bother ... it'll roam off into a side topic and you still won't have any data ... perhaps The Oil Drum would be a good place to post it?

[MrBill]

$this->bbcode_second_pass_quote('Doly', 'I')'ve been wondering what the market reaction will be when oil hits the psychologically significant $100 mark. What do the experts think?

[MrBill]

Wow, $11 a gallon for gasoline. Makes $3 a gallon seem like a bargain considering wages are much lower in Belize than in America! The Belize GDP per person is about $3200 versus $36.200 in the USA (using non-PPP adjusted figures from 2002)

$11 per gallon is $462 per barrel equivalent and yet motorists have not completely abandoned their cars. Makes you think about high prices and demand destruction in a new light when there are no alternatives?
$this->bbcode_second_pass_quote('', 'I')n the new reality of fuel prices inching uncomfortably close to eleven dollars a gallon, a disturbing trend has been affecting an increasing number of Belizean motorists: stolen gasoline. According to the Police Department, the crime is a persistent problem as victims often fail to report the crime and simply repair their vehicles, keeping fingers crossed that it won't happen again. But this morning we spoke with one Belize City resident who says the situation has left him running on empty.