Hougan Right (Again)

December 18, 2008

As the global economy implodes and oil dips below $40 a barrel, Hougan looks like a genius once more.

Even OPEC is now looking desperate, taking 2 million barrels a day out of the supply chain and not even sending a ripple of upward price movement into the markets...

I'm sorry, I know I'd promised to take my eyes off the market, but it's like NOT looking over at a car crash as you crawl past the wreckage after waiting in a very long line of rubberneckers. I want someone to come in here and comment with ONE good thing they're seeing in the economy right now. Credit remains tight-ish despite hundreds of billions (probably trillions now) of government dollars flowing through the system, the market is down, real estate is down, commodities are down, the dollar is down, debt is up, unemployment is rising, sales are down, consumer sentiment is flopping around in the mud. We MUST be near capitulation, right? Right?

I've decided that I don't know anything, but I do know Someone who does. Matt, can you please explain what is going on? Give us some hope, some change we can believe in? As The One Who Knows, I've come to accept that your wisdom is The Wisdom, so tell the indexer investors around the world: What can we expect in the next year? WILL Oil hit $25 a barrel? Is the dollar headed back to 1.60 to the euro, is the market going to touch 6,000? We want to know, oh Wise One.

By the way, I just opened up www.oanda.com and note that the euro has soared to over 1.46 dollars. Good lord. Weren't we just at 1.25 about 2 weeks ago? I'm getting queasy. I have never, ever seen such fitful push and pull in the markets—currency and equities in particular—in my life. It can't be healthy.

The $40-a-barrel thing (DESPITE a plunging dollar), is definitely the silver lining (as is more space on my flights now, cheaper hotel rooms and plenty of elbow room in posh bars—though much less in the dives). When I was in Ohio in JULY, I paid $50+ to fill up a tank of gas. When we were there for Thanksgiving, that was just over $20. Insane. In 4 months, a gallon of gas went from over 4 bucks to $1.59. So the volatility is not just in the market, it's on Main Street, which is what makes things all the more disconcerting. 

What sometimes seems like the fantasy world of paper money on Wall Street now more than ever directly affects average people's retirement security, their monthly budget allowance and (in the last couple of years) their food prices, even in the most remote third world locations. So it comes down to, like it or not, we're all in this together, and there's a real need to rise above the politics and find some solutions.

Merry Christmas, by the way. I'll make sure I cheer up a bit next week. I'll leave that to hopeful Hougan in the meantime.



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