Posted By RichC on October 24, 2008
Wall Street continues to frighten investors, although today could have been even worse considering the 10% drop in Japan’s markets on Friday and the continued fear that we are heading into a worldwide depression. No longer are we tossing the word “recession” around, but now I’m regularly hearing “depression.” Perhaps this is a sign that the bottom is being reached? Interestingly I listened to someone talking about how the rapid change in energy was one of the catalysts in colapsing the mortgage based crisis, and that the bright spot is that energy, particularly oil, could be the catalyst that helps us recover. The point was that the number of dollars moved from consumer purchases to energy was huge as prices went up, and much in the same way these same dollars are finding their way back into the economy as energy prices (oil) declines. Hmm … today’s price of crude is considerably lower than at its peak — half as much per barrel. The analyst was correct … that’s a huge number of dollars that was being spent by consumers and business alike; will these dollars get circulated in the U.S. and will they be enough to move us into recovery?