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Thread: Dow cratering today

  1. #21
    the bailout wasn't designed to save the stock market

    it was designed to keep the flow of capital moving

    this correction in the market is about 8 years over due and isn't necessarily a bad thing

    some see it as a disaster but others see it as a buying opportunity

    by the way crashes always get better press than recovery - the day after 777 drop last week it went up 500 points but no one marked that - the crash got all the press. My point is what we are seeing is a volatile market undergoing an expected correction... and it will not keep going in any 1 direction.

  2. #22
    [QUOTE=Warfish;2791187]Can you provide some independant proof of this claim, outside it being your opinion?

    Did "demand" plumet worldwide, overnight? How much less per week are you driving, for example, Nuu? I can say I havn't driven a single mile less because of this as yet, and I am decidedly "middle class". Hence my disbelief in the "plumeting demand" theory.[/QUOTE]

    With all due respect, Warfish, you are beyond dense on this topic.

    America uses 25% of the world's oil. It has 3% of the world's reserves. Demand is the only thing that happens here that significantly impacts prices, and the only thing that will ever happen.

    Beyond that, there has already been tons of data about how Americans are driving dramatically less now than they were a year ago, presumably a reaction to gas costs. I know that when our heating bills rise, we keep our apartment a bit cooler in the winter than we otherwise might. Since the credit crunch is crushing Europe as well now, the multiplier effect on stuff like demand for gas looks like this ...

    [url]http://www.bloomberg.com/apps/news?pid=20601082&sid=aKTBxdGmqaEo&refer=canada[/url]

    [QUOTE]Oil Declines Below $90 a Barrel on Concern Demand Will Weaken
    By Margot Habiby



    Oct. 6 (Bloomberg) -- Crude oil fell below $90 a barrel for the first time since February as the credit crisis deepened in Europe, adding to concern that global economic growth will slow and reduce demand for fuels.

    Oil dropped as low as $88.89 a barrel in New York as European leaders pledged to bail out troubled banks and protect depositors. OPEC President Chakib Khelil said today the price slide will continue next year, and Saudi Aramco, the world's largest state oil company, cut its prices to Asia and the U.S.

    ``The negative sentiment that's growing in Europe is definitely having an impact,'' said Gene McGillian, an analyst at TFS Energy LLC in Stamford, Connecticut. ``The dollar going up helped oil start on a down note. People are looking at how far it will drop rather than looking at a technical rebound.''

    Crude oil for November delivery fell $4.38, or 4.7 percent, to $89.50 a barrel as of 11:56 a.m. on the New York Mercantile Exchange. Earlier, it touched the lowest since Feb. 8. Futures have fallen 39 percent from the record $147.27 reached July 11.

    New York oil prices declined 12 percent last week as [B]reports showed U.S. fuel demand the previous four weeks was the lowest in almost seven years [/B]and manufacturing shrank in September at the fastest pace since the last recession in 2001. The Labor Department reported a bigger-than-expected 159,000 drop in payrolls in September last week.[/QUOTE]

    So, uh, yeah, I guess it did plummet overnight.

  3. #23
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    Ruggers, are you working in REO or something for your firm? Just asking.

  4. #24
    Then I guess I am dense Nuu.

  5. #25
    The natural price of oil, based solely on current suppy and demand, is somewhere around $65 per barrell. The rest is speculation.

    Speculators will be driven out of this market pretty quickly.

    The real determinant of price is demand from China. They are the marginal buyers. Their needs are being driven by factors not at all related to the American economy. They have more to do with population and migration. Every year, they build a city the size of Houston TX to accomodate the continuing shift in their population from the villages to the cities. Every year.

    China is the new economic powerhouse.

    To be honest, we could use a recession, or even a depression, here in the US to shake out the freeloaders in our economy. No shortage of those here.

  6. #26
    [QUOTE=WestCoastOffensive;2791254]Ruggers, are you working in REO or something for your firm? Just asking.[/QUOTE]

    Nope, my company purely does information tracking. Data, data, data. From all angles.

    My math was off on that post, way, way off actually. Which is why I deleted it.

    Let's give this another shot:

    Holy crap.

    For sh-ts and giggles, I just ran a search on the vacancy rates (percentage of unoccupied squarefeet in a specified area). I did this throughout 3 combined states, New York, New Jersey, and Pennsylvania for industrial properties.

    To put things in perspective, my company tracks just about 2.255 billion square feet of industrial space throughout those 3 states.

    Now, since the first quarter of 2007, the vacancy rate has INCREASED since then by .5%.

    That's almost an addition 14.9 million square feet of industrial space that has gone unoccupied in less than two years.

    I'll repeat, 14.9 million square feet of industrial space, that was in use last year, is not occupied currently. The buildings are just sitting there, not generating anything.

    Now, your average warehouse plant ranges anywhere from about 50,000 to 100,000 square feet. Some a lot larger, and some a lot smaller, but that's probably your highest probability of hitting the most properties. 50,000 to 100,000 square feet.

    That means about 150 - 300 industrial buildings in the NY/NJ/PA area are unoccupied right now, and they were occupied at some point in 2007. Now granted, that final figure is purely an educated guess, but the previous numbers are very accurate. That's only in 3 states.

    And that right there is why your oil demand is down.
    Last edited by RutgersJetFan; 10-06-2008 at 01:35 PM.

  7. #27
    [QUOTE=Warfish;2791256]Then I guess I am dense Nuu.[/QUOTE]

    Just on this. :D

    In general, supply and demand are weighted equally in these things. But, when it comes to our usage of oil, they are not even close to equal. Our usage is more than 8x our supply.

  8. #28
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    [QUOTE=sdJETSetter;2791234]Its amazing. Where will the bottom be? 8500???:eek:

    Had my eyes on that Diamonds of the DOW stock for months now. Trades even with the market. I mean how low can this go?[/QUOTE]

    My prediction is Dow 8,000 in 6-12 months.

    This is my post from another thread...before today's 500 point drop...

    [url]http://www.jetsinsider.com/forums/showpost.php?p=2789385&postcount=4[/url]

  9. #29
    Warfish,

    You are taking a narrow view on usage of a barrel of oil. Oil is use to manufacture many consumer goods not just gasoline. That manufacturing will slow as people cut back on buying unnecessary items in a recession. As they cut back, less oil-based goods are manufactured and less gasoline is used to transport the goods to market.

  10. #30
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    [QUOTE=bitonti;2791244]the bailout wasn't designed to save the stock market

    it was designed to keep the flow of capital moving

    this correction in the market is about 8 years over due and isn't necessarily a bad thing

    some see it as a disaster but others see it as a buying opportunity

    by the way crashes always get better press than recovery - the day after 777 drop last week it went up 500 points but no one marked that - the crash got all the press. [B]My point is what we are seeing is a volatile market undergoing an expected correction[/B]... and it will not keep going in any 1 direction.[/QUOTE]


    Yup. Do you follow the VIX? Did you see it was over 50 today?

  11. #31
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    [QUOTE=jetstream23;2791271]My prediction is Dow 8,000 in 6-12 months.

    This is my post from another thread...before today's 500 point drop...

    [url]http://www.jetsinsider.com/forums/showpost.php?p=2789385&postcount=4[/url][/QUOTE]

    imho that's a best case scenario, Dow being 8k... it could be as bad as 5k and 12+% unemployment before all is said and done

  12. #32
    [QUOTE=RutgersJetFan;2791260]Nope, my company purely does information tracking. Data, data, data. From all angles.

    My math was off on that post, way, way off actually. Which is why I deleted it.

    Let's give this another shot:

    Holy crap.

    For sh-ts and giggles, I just ran a search on the vacancy rates (percentage of unoccupied squarefeet in a specified area). I did this throughout 3 combined states, New York, New Jersey, and Pennsylvania for industrial properties.

    To put things in perspective, my company tracks just about 2.255 billion square feet of industrial space throughout those 3 states.

    Now, since the first quarter of 2007, the vacancy rate has INCREASED since then by .5%.

    That's almost an addition 14.9 million square feet of industrial space that has gone unoccupied in less than two years.

    I'll repeat, 14.9 million square feet of industrial space, that was in use last year, is not occupied currently. The buildings are just sitting there, not generating anything.

    Now, your average warehouse plant ranges anywhere from about 50,000 to 100,000 square feet. Some a lot larger, and some a lot smaller, but that's probably your highest probability of hitting the most properties. 50,000 to 100,000 square feet.

    That means about 150 - 300 industrial buildings in the NY/NJ/PA area are unoccupied right now, and they were occupied at some point in 2007. Now granted, that final figure is purely an educated guess, but the previous numbers are very accurate. That's only in 3 states.

    And that right there is why your oil demand is down.[/QUOTE]

    By your logic (and incredably limited and small-scale statistical analysis here), if the temperature in my basement goes up 0.05%, then Global Warming will kill us all in 5 years.

    I would hope, given your obvious intelligence Rutgers, that you would admit the statistical limitations of your post. For example, how many of those buildings businesses closed them down to move to cheaper states? Can you tell us that from your numbers, at the least?

  13. #33
    [QUOTE=Tanginius;2791279]imho that's a best case scenario, Dow being 8k... it could be as bad as 5k and 12+% unemployment before all is said and done[/QUOTE]

    So I can look forward to a return to the glory of the Carter Administration then?

    Cool. Carter was uber.

    Wonder if President-Elect Obama will reconsider some of his new taxes and spending ideas......

  14. #34
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    [QUOTE=Warfish;2791202]Convenient. Discussing such things with you guys is like driving in circles. Guess supply and demand only works in one direction in your view.

    No worries here, lower the price is, the lower my personal cost. I hope it "plumets" and demand "plumets" as far as it can go.[/QUOTE]

    [QUOTE=Warfish;2791236]I am saying that I continue to be of the position that an increase in domestic drilling would, in fact, help lower the cost of gasoline to Americans such as myself. I am saying that I continue to be of the position that the talking-point-issers who echo the "drilling would only lower the price $0.000002 over 150 years" are incorrect, and I'll leave further discussion of their mtivations to be incorrect aside for now.

    Am I being clear now?

    And it would, all things considered, probably been a more preferable way to achieve that end that the way the market appears to be doing in regardless.

    In any event, as I said, I hope the price of Oil continues to plumet.

    ...although buying some Tennents is looking good too, I must admit.[/QUOTE]

    [QUOTE=Warfish;2791256]Then I guess I am dense Nuu.[/QUOTE]



    WF, if we were talking about an equal increase in supply to the expected decrease in demand... then you'd be right that the increase in supply *should* make the futures market move the same amount (opposite direction obviously)...

    however what you are forgetting is that the expected/possible increase in supply from increased US domestic drilling is so minuscule (we have a tiny fraction of the world's supply of oil, and therefore we can never have a large impact in the amount of oil produced) and the expected/possible decrease in demand from global economic recession (depression?) so gigantic, that the price swings are on completely different scales.

    you would be right, except you are forgetting to take scale into consideration... very small increase in worldwide supply < very large decrease in worldwide demand

  15. #35
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    [QUOTE=Tanginius;2791279]imho that's a best case scenario, Dow being 8k... it could be as bad as 5k and 12+% unemployment before all is said and done[/QUOTE]

    I hate to agree...but I do. There is definitely an outside chance at Depression like economic numbers. In fact, I'll tell you two things I bought in the past month...

    [B]-RDQXZ[/B]....PUT (RDQ) S & P 500 DEPOSITORY DEC 104 (100 SHS)
    and
    [B]GLD[/B]...SPDR GOLD TR GOLD SHS

    Unfortunately, both are doing very well...but not enough to offset the decline in all my other stocks. :mad:

  16. #36
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    [QUOTE=jetstream23;2791271]My prediction is Dow 8,000 in 6-12 months.

    This is my post from another thread...before today's 500 point drop...

    [url]http://www.jetsinsider.com/forums/showpost.php?p=2789385&postcount=4[/url][/QUOTE]

    Who are you Jim Cramer :)

    Weren't you recommending buying not to long ago ;)

  17. #37
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    [QUOTE=Warfish;2791290]So I can look forward to a return to the glory of the Carter Administration then?

    Cool. Carter was uber.

    Wonder if President-Elect Obama will reconsider some of his new taxes and spending ideas......[/QUOTE]

    well if you're smart you're hedging yourself against the coming storm. Keep 5k in small bills in your safe at home. Take possession of your gold & silver holdings rather than keeping them stored in London or Zurich, and continue to increase your holdings while the prices are kept artificially low by governments & their "federal" reserves around the globe (may be as little as 1 - 2 more months, before the upward trend resumes after people realize the hyper-inflation that is coming). Also, you may already have one, but get a gun... for protection and ideally one that can be used for hunting if need be. Dehydrated and canned food supplies should be stocked up on and of course seeds to grow your own during the warmer mouths.

    then you can look forward to knowing you did everything you could to prepare for the coming Hoover admin (not Carter) re-runs

  18. #38
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    [QUOTE=nuu faaola;2791250]With all due respect, Warfish, you are beyond dense on this topic.

    [/QUOTE]

    Now how can you say "with all due respect" and then hammer someone? It would be like me saying "That nuu faaola guy is as dumb as a bucket of rocks, God Bless him!" :D

  19. #39
    [QUOTE=Warfish;2791290]
    Wonder if President-Elect Obama will reconsider some of his new taxes and spending ideas......[/QUOTE]

    there won't be any money left to spend

  20. #40
    [QUOTE=Warfish;2791283]By your logic (and incredably limited and small-scale statistical analysis here), if the temperature in my basement goes up 0.05%, then Global Warming will kill us all in 5 years.[/QUOTE]
    Not at all, but it's blatantly obvious that energy demand in that area would lessen given that info.

    [QUOTE]

    I would hope, given your obvious intelligence Rutgers[/QUOTE]
    Zing!
    [QUOTE]that you would admit the statistical limitations of your post. For example, how many of those buildings businesses closed them down to move to cheaper states? Can you tell us that from your numbers, at the least?[/QUOTE]

    Not too many actually. There are businesses moving westward (or eastward if you're looking from the other side of the country) into the middle, but the rates aren't very high. There isn't a market out there over the past two years that has actually seen any gains. One market really (Houston), is the only one that hasn't seen a true LOSS. However vacancy rates have increased nationwide.

    The west, particularly the irregular triangle that encompasses the area from Phoenix, to La, then upwards to Portland, have been ridiculously hard by this.

    Vacancy rates are actually a very telling and simplistic stat. It's obvious that the coastal areas are going to be highest in terms of the number due to the higher rental rate and property values, however, they're still up.

    As previously stated, by just about every measureable, Houston is pretty much the sole city in the country that hasn't seen a loss. No gain, just no loss. They've broken even thus far. It would take me a ridiculously long time to put together a data sheet for you as to why, so you're just going to have to take me at my word on that point. Oklahoma City has done alright too believe it or not.

    What I can do however, is run the same search that I did for the 3 previous areas. I'll do the 3 states throughout the country that have had the least amount of problems compared to the rest of the mainland. Texas, Oklahoma, And Kansas.

    Now, we're tracking just about 1.61 billion square feet of industrial space throughout those 3 states.

    Now, since the first quarter of 2007, the vacancy rate has increased since then by .1%.

    That's about 428,000 square feet of industrial space that has gone unoccupied in less than two years.

    Here's the point in regards to your question: Some businesses are moving inward, away from the coasts, yes, that's true (and it's happening much higher on the office end rather than the retail or industrial end), but nowhere near a high enough rate to offset the rate at which businesses are moving out. By all standards, that would equal out to a severe decline in energy use.
    Last edited by RutgersJetFan; 10-06-2008 at 02:03 PM.

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