1$/gal. gasoline? Maybe, but what does it mean really?

[MinnesotaEric]

Those low AG prices have not been reflected in food costs.

Commodities aren't coming back until we see a global population expansion (an uptick in demand) or over-production capacity comes down (which isn't any-time soon).

Farmers just finished a cycle of monster profits over the last decade and the best operators should be fine even with reduced margins.

 

[Larry Caldwell]

Yep - A friend of mine commented if we all had to write a check every week for what we pay in taxes most folks would be a bit more critical as to what services the government should provide. I vote we start with the big welfare packages, Medicare and Social security, once the recipient has received their contributions plus 10% compounded yearly they should stop receiving distributions. Painful but glass houses and stones.

I vote we start with the war we have been fighting since 2001. We need to put a leash on Republican miltary adventurism. We can't afford it. Their "borrow and spend" economics are running the average American into the poor house.

 

[Larry Caldwell]

Commodities aren't coming back until we see a global population expansion (an uptick in demand) or over-production capacity comes down (which isn't any-time soon).

Farmers just finished a cycle of monster profits over the last decade and the best operators should be fine even with reduced margins.

Not for long. The average farmer is losing about $600/head on his cattle. The path to survival is liquidating the herd and going out of business. With prices far below the cost of production, it is foolish to plant a crop.

Commodities will come back as soon as we have another cycle of massive worldwide crop failures, or when the world quits thinking dollars are the best thing since sliced bread.

 

[dsgsr]

I vote we start with the war we have been fighting since 2001. We need to put a leash on Republican miltary adventurism. We can't afford it. Their "borrow and spend" economics are running the average American into the poor house.

I agree. We need to stop allowing the ones that profit from War/conflict to have any input in running the country.

David

 

[Larry Caldwell]

I personally would like to see oil prices creep up a little to about 2.75 a gallon. That's a price I can live with filling up my tank and still keeps the price of a barrel of oil high enough for people in the energy sector employed. I read somewhere recently that a ridiculous number like 250,000 jobs were lost due to low oil prices. As much as l love filling my tank up for cheap I'd much rather pay a little more to keep fellow Americans and Canadians employed.

Plus these low prices are creating havoc on peoples 401k accounts. Since the beginning of this year my retirement account has lost almost 10% and that's even with medium risk funds.

I doubt that oil prices have much to do with the drop in stock prices. There was a market bubble going on, and a correction was inevitable. People think their 401k is real money, but it's not. It's just a fictitious number. The only way it's a real number is if you cash it in, and then it's what you can get for it on the day you sell it. Stocks go up and down. So do bonds. If the company declares bankruptcy, bonds can become worthless overnight. Even gold has been sinking like a rock.

 

[MinnesotaEric]

Not for long. The average farmer is losing about $600/head on his cattle. The path to survival is liquidating the herd and going out of business. With prices far below the cost of production, it is foolish to plant a crop.

Commodities will come back as soon as we have another cycle of massive worldwide crop failures, or when the world quits thinking dollars are the best thing since sliced bread.

Against global deflationary forces, the world will not stop easing. While I believe our domestic economy isn't too bad (if not super either) last week Ray Dalio speaking at Davos called for QE4 as soon as softening earnings begins to effect the main street economy. Meanwhile, David Stockman who has been against QE policy because it will eventually blow up believes that because of QE the U.S. is heading into a full blown recession that will result in a long-lasting collapse in equities. Personally, I think we'll see a boomerang in Fed policy from tightening back to easing as time goes on forcing us to go long again.

Even so, David Stockman's commentary about what the Fed has been fighting is interesting. Watch the video at the link, it is a good macro bear case.

Markets in store for a ?thundering reset?, former official says

 

[Terry1040]

Cheaper Gasoline is good for the economy in terms of balance of payments. I am tired of our us dollars going to the part of the world that desires to destroy us. But, I feel that prices will again go up. Ag commodities will someday be priced higher than today, but that may take a year or two. Lots of ag producers are in financial trouble & more will get there if prices stay where they are now. All markets move more that they used to. That is just the way it is today.

 

[npalen]

"All markets move more that they used to. That is just the way it is today."

Are you talking dollars or percent? I remember when the Dow was less than 1,000. A 10% swing would have been about 100 points where today it would be about 1600 points.

 

[300UGUY]

Commodities aren't coming back until we see a global population expansion (an uptick in demand) or over-production capacity comes down (which isn't any-time soon).

Farmers just finished a cycle of monster profits over the last decade and the best operators should be fine even with reduced margins.

The guys I see around here are multi generational operations. A lot of them have investments in a lot of things other than ag. They could run zero margins for years, and not be hurt. Of course, their government buddies would find a way to subsidize them way before that.

 

[NoTrespassing]

Here it comes, $1 gasoline by the end of the week in Oklahoma. WTI settled under $28 dropping 5.9% and Brent dropped 7.7%! They are truly running out of places to put the oil now and will have to shutter more wells soon. It's getting very interesting.

Kevin