Reconciling assholes for nearly a decade.

Oil price to halve within a year.

Glad to know it's all going to be all right. How isn't quite clear, but don't put the SUV on blocks just yet:

http://www.forbes.com/business/energy/feeds/ap/2005/08/29/ap2195622.html

I think this guy should run for office :-)
Permalink trollop 
August 30th, 2005
This is good news - now I can get that Hummer I always wanted.
Permalink Guzzler 
August 30th, 2005
Awesome - so I guess we shouldn't modify our behaviour at all, because this silliness will all blow over. Good stuff.

BTW: New Orleans is turning into a validation of legal gun ownership. If I lived in an area descending to chaos, I'd want a nice sidearm.
Permalink Dennis Forbes 
August 30th, 2005
Ah, the spirit of Micawber lives on.
Permalink Peter 
August 30th, 2005
Now that oil is cheap, we can pull out of Iraq because we don't need their oil anymore, right? This is good news. I was worrying about driving my Suburban to pick up and drop of little Timmy from school each day. I wouldn't want to drive one of those small cars because they are not safe
Permalink Liberal Soccer Mom 
August 30th, 2005
"I think in 12 months we are going to see oil down to US$35, US$40 a barrel," he said.

Yeah, riiiiiiiiiiiight.

And you morons actually believe him because he's a woodoo man. Fuck, you guys are really pathetic. Period.
Permalink Dan Denman 
August 30th, 2005
Just out of idle curiosity...

Greenspan says the housing market is overinflated due to speculation, and the reply here is "the crash can't come soon enough"

Forbes says the oil market is overinflated due to speculation, and the reply here is "what has he been smoking?"

Both cases where demand is seriously outstripping a physically limited supply.

Why the differing opinions?

Philo
Permalink Philo 
August 30th, 2005
Because you don't run out of land.

US population growth is pretty flat, so population density isn't really changing much overall.

Oil, on the other hand, does go away. Permanently. Combined with a non-flat global population growth and industrialization (thus not only more people using oil but more barrels per person being used), and halving the price of oil just seems...well, ludicrous.
Permalink Aaron F Stanton 
August 30th, 2005
The demand for housing is not driven by population growth, but by changing demographics. More and more dwellings have single occupancy while fewer and fewer are occupied by couples or families. This is an ongoing trend with little sign of reversal.

The price of oil on the other hand is not driven by demand so much as by political maneuvering and temporary constrictions of supply. It is not hard to see the price coming down in future when conditions change, just as it has done in the past.
Permalink Ian Boys 
August 30th, 2005
So it'll drop in 2009?
Permalink Aaron F Stanton 
August 31st, 2005
Dennis Forbes is a crackpot. No one believed him before and surely no one believes him now.
Permalink Anon 
August 31st, 2005
You can run out of land, but that is not the point.

What is in short supply is land in a location people want to live in - which in practice means near where there is work.

A house in San Francisco probably costs ten to twenty times as much as the equivalent house in the rust belt.
Permalink Stephen Jones 
August 31st, 2005
> this silliness will all blow over

No, just the houses.
Permalink  
August 31st, 2005
The other concern about house price inflation is whether the rise in prices is due to speculation or need. If it is you get this whole positive feeback cycle going of boom followed by crash. The trick being to buy your 2nd house after the crash and sell in the boom.

This has been typical in the UK - I don't know if it is in the US.
Permalink a cynic writes... 
August 31st, 2005
Housing prices normally have a close affinity to income, though, so if housing prices keep going up, but income remains constantly or only slightly changed, there has to be some concern. e.g. How many people could afford their mortgage if interest rates were doubled? I think that's the primary foundation behind the housing bubble philosophy.
Permalink Dennis Forbes 
August 31st, 2005
Dennis -
I agree with you regarding the gun ownership -- the TV news last night had pictures of the looters. Breaking into the WalMart and cleaning out the food section? Bad, but understandable. Breaking into the WalMart and stealing a 36" television when the city will be without power for weeks? That's a thief, and should be shot.

The local news also had a story about filling stations running out of gas from people wanting to fill up before the price hike. Of course, it was only one station near NC State that runs out all the time anyway, but what a story! CITY RUNNING OUT OF GAS! Film at eleven.

Nimrods.
Permalink example 
August 31st, 2005
+++Breaking into the WalMart and cleaning out the food section? Bad, but understandable.+++

How is this bad? It's a DISASTER AREA, you nimrod. These people need food. It's not like they can walk down to the corner grocery and buy supplies.

People stealing televisions and DVD players? Shoot them on sight. Not only are they opportunist pigs, but they're ignoring the plight of their neighbors for their own material gain. Here are able-bodied people who could be helping out in this utter tragedy, and instead they're lining their pockets and behaving like gang members.

But looting food and supplies? Not even a little bit bad.
Permalink muppet 
August 31st, 2005
>Forbes says the oil market is overinflated due to speculation, and the reply here is "what has he been smoking?"
Forbes is saying that if we clap our hands, tinkerbell can fly again.
Permalink Peter 
August 31st, 2005
Not going to read the article, sorry.

But as for oil being "high". The dollar is 1.25-1.3 per Euro. Considering that, merely against the Euro, the dollar has slid 30% over the last 3 years.

Take 30% off $60/brl of crude, now you're at $45 or so.

Having lived through the '70's, and watching gasoline prices in the '80's become the equivalent of those in the 60's (real dollars), cheap gasoline in say 5-10 years is not unrealistic. I would not bank on it, but I would not bet strongly against it either.

Perhaps this time the oil bust hits, I'm going on a shopping spree for Denver/Houston real estate. I missed my first chance.
Permalink hoser 
August 31st, 2005
FWIW Forbes is hosting a CEO conference in Sydney and I guess the thread subject was his attention-getter. We had a more measured zinger from the man from BMW which I think is still overoptimistic, but Helmut Panke's an old man and needn't care - he's still selling cars:

http://www.stuff.co.nz/stuff/0,2106,3395625a6026,00.html

Me, I'd get the Hummer the best blocks I could afford.
Permalink trollop 
August 31st, 2005

This topic was orginally posted to the off-topic forum of the
Joel on Software discussion board.

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