Negative Interest Rates

Apr 4, 2016 | Interest Rates, Oil

Janet Yellen, of California, President Barack Obama's nominee to become Federal Reserve Board chair, testifies on Capitol Hill in Washington, Thursday Nov. 14, 2013, before the Senate Banking Committee hearing on her nomination to succeed Ben Bernanke. (AP Photo/Jacquelyn Martin)

One of the interesting things in the past year is the very clear awareness that low oil prices are not all good, and that there is a negative aspect as well.

Same deal with interest rates.

While it’s nice to have low cost of borrowing, a negative interest rate could be deadly to many industries of our vibrant economy, and big parts of the stock market indexes.

Full Article — Economists at Global Bank Body Warn of Risks from Negative Interest Rates

Why the Stock Market is Obsessed with Oil

Feb 1, 2016 | Market Commentary, Oil

Oil

The S&P 500 is now almost perfectly correlated to the price of oil, which is interesting because over the past decade they’ve had virtually no correlation.

Energy only makes up 3% of the economy.

So why the focus?

  • Falling prices often signal softness in demand, which precedes an economic slowdown.  But, most believe this is a supply glut, not weakened demand
  • Cheap oil is causing US Oil production to cool off, hurting energy companies and states heavily dependent on oil
  • The threat of Oil Loans imploding (raises the risk in the banking sector
  • Russia, Venezuela, Brazil, and others that rely on oil exports could lead to an emerging debt crisis
  • Fresh doubt about whether the Federal Reserve will be able to raise interest debt

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Why the Stock Market is Obsessed with Oil

Why Stocks are Tumbling 6 Years into the Bull Market

Aug 24, 2015 | Asia, China, Emerging Markets, Market Commentary, Oil

DJIA

The largest weekly decline since 2011, leaving the unmanaged stock market indexes close to “correction” territory.

What are the reasons?   China, Oil, Disappointing Profits, 200 Day Moving Average, and Interest Rates.

In a follow up video this week, I’ll start to dissect each and give you my opinion about the long term effect of each.

I like to look at long term effects, not short term gyrations.  The fluctuations have always been there, and always will be.

Full Article: Why Stocks are Tumbling 6 Years into the Bull Market

Oil Prices

Mar 9, 2011 | Oil

Oil has been one of the big pieces of news recently, with some forecasters predicting much higher prices at the pump, whereas others are predicting a stabilization and downward trend as other countries start to increase their output.

The price of oil is important for our economic recovery, and if prices continue to climb, this will not be good. A higher oil price can negate all the progress we’ve seen so far.

To the right is the historical price of oil. Let’s not forget we’ve been here before and survived.

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Where Does our Oil Come From?

Mar 9, 2011 | Oil

In case you’re curious where the world’s oil supply comes from, there’s the breakdown by country. I think there’s a perception by most Americans that we get all of our oil from the Middle East, but that’s simply not the case. Saudi Arabia, for instance, is only 11.9% of the world’s supply.

That’s a lot, but it’s certainly less than what most people perceive.

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