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King Tut Is Gonna Put It In Everyone's

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January 28, 2011 – Comments (2) | RELATED TICKERS: MCD , BBY , F

But, do you really believe the future is set?  Well in one scenario the following can happen:

First, Egypt's Suez Canal, which connects the Mediterranean and Red Seas, moves millions of barrels of oil a day to Europe and eventually to economies that need the oil like the US.  Well the canal gets closed and this raises oil prices for Americans.  Gas prices rise.  People start using gas more wisely.  Then as a result, people go out less.  Places that require you to actually be there in person like restaurants, fast food, entertainment, etc. start to see a drop in customer volume.  Stocks like MCD and YUM take a hit. 

As gas prices increase, you basically have people saving money.  So those electronics people were planning to buy will have to wait.  Sorry Best Buy (BBY).  Enjoy another quarter that doesn't meet estimates.  If cars are the issue, well people sure aren't going to dump more money on a newer car.  So Ford (F), enjoy your days ahead when consumers start saving their current cars and doing their own maintenance. 

On top of that the economy is still so-called "recovering".  Anyways, you have rising gas prices and rising commodity prices but employee checks remaining about constant.  So that national savings rate that seems so important.  Current averages are in the negatives actually which explains most of the problems this country is currently facing.  This is in part the result of the large and increasing budget deficit, and in part the result of a decline in household savings due to low interest rates and rising asset prices.

The curse of King Tut lives.

2 Comments – Post Your Own

#1) On January 28, 2011 at 3:33 PM, leohaas (32.29) wrote:

Or how about this scenario:

The Suez Canal closes. Oil and therefore gasoline prices go up. Alternatives to oil and gasoline become more attractive.  Businesses all over the world, including here is the US, put more effort into developing such alternatives. Eventually, the alternatives ensure we no longer need to import any oil from the countries where they hate our guts. We disengage from those countries (meaning we don't do business with them and we withdraw any military we still have there). The next generation of people in the former oil exporting regions of the world still hate us, but a tad less than their parents. Just enough to keep themselves from strapping a bomb to their bodies in an attempt to kill as many of us as possible.

And life was good again.

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#2) On January 28, 2011 at 3:48 PM, mikecart1 (98.88) wrote:

leohaas,

That would be an alternative ideal scenario but I have high doubts it will happen.  I work in the nuclear industry and we are struggling to deal with all the naysayers of nuclear power and how safe it is.  That is only one aspect.  On top of that, I don't see the current government in the US growing a backbone and going independent for once.  The US relies way too much on so many other countries to function that any scenario like that would have to be on a revolutionary level.

:D

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