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buffalonate (44.13)

Time To Sell!



July 06, 2011 – Comments (9)

If gas prices are high economic growth will inevitably slow.  Economist James Hamilton has shown that gas price spikes usually leads to a recession 3/4 of a year later.  His work has also proved that a rise in the gas price destroys consumer sentiment.  Since we are coming from such a deep recession he doesn't think we are headed back into a recession but he believes high gas prices will definitely slow grow considerably in 2011.  Here is an article by him talking about how gas prices hurt GDP growth.  The last crappy jobs report sent the market into a death spiral and I strongly believe this will happen again Friday.   

9 Comments – Post Your Own

#1) On July 06, 2011 at 3:25 PM, EnigmaDude (60.92) wrote:

Gas prices peaked back in late April/early May and have been declining since.  If Hamilton is correct about the "recession" 9 months after a price spike then you should be looking to sell around February or March of 2012. 

And I think you are misinterpreting the intent of the article:

"he believes the overall health of the economy has improved in a way it can take the higher prices"

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#2) On July 06, 2011 at 3:47 PM, buffalonate (44.13) wrote:

He says that high gas prices will take at least 1% from GDP this year.  Did I not quote him saying that high gas prices would not cause a recession this time?  You need to work on your reading comprehension.

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#3) On July 06, 2011 at 3:52 PM, L0RDZ (91.04) wrote:

Buff its not like this will be the first time you got stuff all twisted and wrong...

My my my with your fascination with gas.

 Sell if you want...   


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#4) On July 06, 2011 at 4:13 PM, buffalonate (44.13) wrote:

Lordz, I seem to remember my prediction on April 28th being exactly right.  My last post about gas prices was right also as the DOW did go below 11,000.  As long as gas prices are really high, growth will be anemic.  I have been selling most of the stocks that I bought the last time the market cratered.  I believe it is much more likely that the economy will not meet the employment growth expectations.  Even if I am wrong I am sure Portugal's or Greece's debt situation will crater the market eventually and give me a good point to get back in.       

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#5) On July 06, 2011 at 4:23 PM, Jbay76 (< 20) wrote:

correlation does not always mean causation

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#6) On July 06, 2011 at 10:30 PM, shamapant (< 20) wrote:


I agree Gas prices hurt but I am doubtful about this 3/4 of year 'delay.' Gas prices have been declining and I am inclined to believe that this signals the end of a tumultuous indecision in the market and a return to bull market. Then again, I have no real  macro economic cred-just my thoughts.

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#7) On July 07, 2011 at 11:07 AM, L0RDZ (91.04) wrote:

Real smart selling....  LMAO.....   Buff I remember you always get everything wrong....    I hope you never play  cards  with all your families money...

 Maybe I'm being too overly  simplistic,  but I would not  base much upon your  ability or timing...

or what you think you know.


but thats just me....  the bad dog...

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#8) On July 08, 2011 at 12:12 PM, buffalonate (44.13) wrote:

Lordz I was right again.  I have been right 3 times in a row.  You can't deny it look at my posts. 

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#9) On July 08, 2011 at 3:50 PM, JPAKolypse86 (< 20) wrote:

Lordz. Please stop acting like a jackass.

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