mcadoo3312

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  • The $64 Trillion Question: What's the Dollar Really Worth?
    Good piece. However, I do not completely agree about the US workforce losing productivity because of demographics. Yes this country is getting older, but it is also being pushed into a position where jobs are less and less being taken for granted. When the pressure is on, people will do all they can to keep their job - harder work equals better productivity. Additionally, Mexicans' work ethic is widely known. As they increasingly immigrate into this country, this should help productivity, not hurt it.
    Sep 05 10:19 am |Rating: 0 0 |Link to Comment |View article
  • How Big a Contribution Comes from Oil Speculation?
    Everyone is spending so much time trying to place blame on one individual cause for the rise in oil, they are missing the big picture. Oil is a non-renewable resource that has been decreasing in supply and increasing in demand, as we all know, for the past several years. More so, this trend is expected to continue, and get worse, in the future. So, supply and demand fundamentals tell us that oil prices have to get higher at some point. But, something literally has to drive the prices higher which is where the "speculators"... come in. There are several different kinds of speculators, but the index speculators are the ones that have come in to focus recently because of their enormous cash inflows into the commodities markets as a form of asset allocation. This is why we are also seeing a negative correlation between oil prices and the value of the dollar. Now, to the person that said why haven't all commodities increased; most have, but most of those commodities are also renewable, oil is not. The price fluctuations of goods that will continuously be able to be reproduced are based on more short term fundamentals. Regarding oil, massive amounts of trades have been placed based on the expectation that the price of oil HAS to go up at some point. The market has gotten ahead of itself with the aid of the cash inflows from speculators. Take these cash flows out of ALL of the markets, not just the NYMEX, and we will see a short term reversion of its price. The price of oil will gradually go back up, but not at the outrageous pace we have seen in past years.
    Jun 26 10:12 am |Rating: 0 0 |Link to Comment |View article
  • Upside to Oil Stocks?
    The supply and demand imbalances expected in the future give a reason why oil should be higher, but not necessarily as high as it has climbed - especially so rapidly. The flows of funds coming into (and staying in) the futures markets has been driving up the price based on these fundamental expectations. If these new entrants are forced to cash out, the upward price momentum gets its feet cut out from under it. Right now, oil prices are the hottest issue in an election year, and the candidates, as well as Congress and President Bush, have all given proposals to cool down the oil market. Even though the street has already been expecting a drop in oil prices, most stocks have still gone up. If oil falls based on enacted legislation, smart investors will capture gains in hope of buying the same solid companies back more cheaply in the future. In the long term, I agree with your theory, but in the short term, investors entering the energy market could be in for some pain.
    Jun 25 13:28 pm |Rating: 0 0 |Link to Comment |View article

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