I have heard nothing but "good news" about our obviously sputtering economy. This is becoming a full on Kevin Bacon moment from Animal House as he screamed hysterically to the approaching mob, "All is well." No it isn't, no matter how many times you tell us otherwise as facts show that same mob now headed to trample us next.
The last time oil dropped this much this fast, 2008 came and ran us over. People are using less oil because it's hard to put gas in a car without a job, or even much of a reason. Production is lessening because less people are buying things, best seen by the horrendous sales figures from this Black Friday. Sales may have dropped as much as 11% over all, with brick and mortars seeing a huge drop and even on line sales dropping about 5% from last year. So much for those rosy predictions I kept hearing about how this would be the best Christmas in years. Instead, it appears people have hit a wall as their spending is not compatible with the measly wages most of us are making nowadays. Now to be fair, this information comes from a source that is usually wrong as the sample size is low and people are unfortunately too stupid to accurately know what they spent. But the chart below is indicative of actual totals that other figures also suggest, albeit lower.
This and the chart above are from Marketwatch.com
There are other figures available. Based on customer traffic, ShopperTrak projected a 0.5% sales decline on Thanksgiving and Black Friday. That’s worse than the 1% gain projected in the Black Friday weekend of 2013.
IBM’s measurement of online sales showed a 14.3% gain for Thanksgiving and a 9.5% gain on Black Friday. Still, the same measure showed a 19.7% gain for Thanksgiving 2013 and an 18.9% advance for Black Friday 2013.
It’s important to note that Black Friday (or Thanksgiving Thursday) isn’t the top shopping day of the year. ShopperTrak says seven of the top 10 sales days are yet to come.
That said, the trends don’t look encouraging, with each of these indicators showing worse growth than in 2013.
“My sense is that retailers might have overestimated the state of the consumer,” said Stanley. “Many households are better off than they were a year ago and may splurge a little more than they did last year, but we still live in very sober times, where people do not have a high level of comfort about the medium- and long-term outlook.”
Most people I know have less money than last year as inflation keeps going up as our salaries remain exactly the same. Health care costs are sapping a lot of us as those Obamacare savings haven't come to pass nor would they ever as costs here in MA that has had Romneycare for some time, has seen health care costs increase an average of 27$ a month per year. That's not cheap.
Back to the price of oil, cheaper prices sound good to those of us who like spending less money, but in the long run this could be disastrous. OPEC may decide to drop the price so low that companies producing oil are no longer profitable and thousands could lose their jobs as a result. This happened before in the 1980's, when "By the mid-1980’s, as oil output from Alaska’s North Slope and the North Sea came on line (combined production of around 5-6 million barrels a day), OPEC set off a price war to compete for market share. As a result, the price of oil sank from around $40 to just under $10 a barrel by 1986." Blacklistednews.com.
This is from Vox.com:
For all intents and purposes, OPEC is now engaged in a “price war” with the United States. What that means is that it’s very cheap to pump oil out of places like Saudi Arabia and Kuwait. But it’s more expensive to extract oil from shale formations in places like Texas and North Dakota. So as the price of oil keeps falling, some US producers may become unprofitable and go out of business. The result? Oil prices will stabilize and OPEC maintains its market share.
When this occurred in 2008, Citibank lost 63% of it's profits. BoA lost 50%. Then we had to rescue the same scumbags who burned down the country with us inside. Next time, I have a feeling the US people are going to feel a hell of a lot less generous towards them. I am hoping we will be smart and organized enough to go all Iceland on the them and take our country back from the greedy pigs rampaging through it.