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  • From: bob ford <bobford79 AT yahoo.com>
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] Gas Prices
  • Date: Wed, 3 Dec 2008 12:41:07 -0800 (PST)

Bev; this was justed posted on the front page of CNBC.Com

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Excerpt:

Oil Likely to Remain at $50, But Don't Celebrate Yet

Kenneth Stier, Features Writer
| 03 Dec 2008 | 10:09 AM ET

Oil prices are expected to stay around $50 a barrel through next year, say
analysts, though that may not give much of a boost to consumer spending, the
economy and stock market.



That’s because the the 60 to 70 percent plunge in oil prices since July is
due to the collapse of demand as the credit crisis careens through the global
economy. So whatever benefits lower oil prices normally bring is more than
offset by the profound weakness in the economy.

“The negative wealth effect [among households] is far outweighing any benefit
that lower gas price is having on discretionary spending," said Chris Hyzy,
chief investment officer for U.S. Trust, the private wealth management unit
of Bank of America [BAC 14.55 0.18 (+1.25%)]. "And we will not feel the
positive effects of that until at least the second half of ‘09.”

Hyzy added that “contrary to prior cycles”—when lower oil prices were deemed
good for stocks—falling prices are actually “having a negative spiral effect”
by signaling a bottom has not yet been reached.

Even so, the savings to consumers is still substantial. ..............

http://www.cnbc.com/id/28020597





--- On Wed, 12/3/08, EarthNSky <erthnsky AT bellsouth.net> wrote:



> Gas here is about $1.67 a gallon or a bit less.
> To those of you who follow the economy, do you think prices
> will
> continue to go down before the end of the year or do you
> think they will
> start heading up again?
> --








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