Oil Tanks You puttin’ the hurtin’ on ‘em now.
– Tommy Wilkerson
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Again, we quote our old friend. Mr. Market has been puttin’ the hurtin’ on gold bulls. On Monday, he went after the gold shorts. Gold rose $42.60 – or 3.6%. That’s proportionally equal to a move of 640 points on the Dow. But today our sympathies go to poor Vladimir Putin and Nicols Maduro. In Russia, the ruble is falling and growth is grinding to a halt. In Venezuela, the whole economy is falling apart. The proximate cause of this hurtin’ is a fall in the price of oil.
Yesterday, US crude oil rose $2.85 – or 4.3% – to $69 a barrel, its largest daily gain since August 2012. But it’s still down 32% from its 52-week high, set in June. Outside of the big oil exporting countries and the US shale-oil business this big drop in prices is widely seen as good news.
Consumers fill their tanks at lower gas prices and have a few bucks left over – money that can be used to buy things. According to the current and conventional delusions of the economic profession, this leads to sustained higher economic growth, more jobs and a cure for impotence.
But dear reader, was there ever in the history of the world a hurtin’ that stayed put? That’s the trouble with hurtin’: It moves around. In today’s Diary we look more closely at the subject of hurtin’ generally… and the effect of lower oil prices, specifically.
In passing, we observe that the secret to investing success is to buy what is hurtin’ when it is hurtin’ most … and to sell what ain’t.
Photo credit: Robert Garvey / Corbis
This post was published at Acting-Man on December 3, 2014.
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