Falling Prices
With arguably the worst economic event since the 1930’s taking place, it’s hard to get away from the bad news but two recent articles in the News Tribune Biz Buzz about falling prices caught our attention. The first was a plethora of inexpensive airfares (how does $145 round trip from Sea-Tac to San Francisco sound?) and the second covered eight gas stations in Pierce county where one could fill up for $2.60/gallon or less. Heck, Fred Meyer’s had regular going for $2.49 today at their Kent location.
Match that with the 2nd biggest day in NYSE history and things aren’t looking too bad.
So this week’s Question on the Economy to you is: Are you a glass half full type and believe news like this is a sign that the recovery has started; OR, are you a glass half empty type and believe this is simply a blip on the radar?
Personally, I have an old pick-up truck with twin tanks that’s been running on empty for a while. I think I’ll be topping off just in case.
7 comments
D Douglas Tooley October 29, 2008
We reached a bottom of some sort last Friday – the indicator was the big negative bets on the futures market for a ‘black friday’ type event.
But bottoms can be short term or long term, and no one can say for sure which that was.
One big possibility is that the Stock Market may not be the investment it once was. If you are mathematically literate you will realize that growth at twice the rate of the economy itself can’t go on forever.
In fact what we may well be seeing right now is an attempt to continue the growth of corporate america beyond it’s most efficient scale as a percentage of the total economy.
Making bad loans to drive out a quality small businessperson is bad juju.
One thing for sure is that unless we start making better decisions on loans it will continue to get worse.
My personal opinion is that it may well not turn up until the corporate and government boomers start retiring – but then again, who knows what they will leave in their place.
Perhaps, though, a forced retirement might well be a wiser strategy than the laying off of the new talent while assigning them the scapegoat blame for ‘your’ mistakes?
J jdub October 29, 2008
Cynically, gas prices are low because we’re all voting next week, and we’ve certainly turned away from from the pump in the last half year. Taking different avenues of transport. The powers that be didn’t give a shit last year, but we just stopped filling up the gas tank.
It’s always like this on election year, and this one stokes up the pipes higher then usual.
Good luck tuesday powers that be.
There’s a new dawn coming, a very bleak one, yet, a new one.
Something different.
Better than the old one. At least.
N nos October 29, 2008
i don’t think we’ve really seen the bottom yet. And even if we’re there, we won’t know it’s the bottom for months. You see, you never really know where you are when your in uncharted territory…
D dck October 30, 2008
Speaking of cheap gas and a twin-tank truck running low, if that truck is a diesel you need to go to the station on N. 26th & Alder. When I filled up there yesterday ($2.48 for regular) they had diesel at $3.00!
My glass is half full, literally, when we aren’t running the credit card twice in order to get a full tank.
A altered chords October 30, 2008
http://www.randomuseless.info/gasprice/gasprice.html
is a good link to see historic gasoline prices.
I think we all need a longer view than the recent past to determine if things are cheap or rich.
Judging from the chart it looks like we’re back to ’05 prices right now.
That was only 3 years ago. Big deal.
They’re certainly cheap compared to a few months ago but were those prices a few months ago real? Were they sustainable?
Current housing prices in this area look like where they were just 3 or 4 years ago. Big deal. That’s still not cheap.
Based on historicals, much to my chagrin, it appears as though we can expect further asset depreciation.
It is an impossible task to perfectly pick the bottom.
If you want this to be the bottom, start buying stuff and speaking optimistically.
Negative words are self fullfilling. That goes for all aspects of human interaction.
You can pay me $5.00 for this advice now or $7.50 next year when my rates will be higher because the economy is ready to take off!
T Thorax O'Tool October 31, 2008
If you look, you can find gas for $2.29.
However it is the Arco on the corner Portland & Puyallup Ave. We all know Arco is pretty poor quality, it’s mostly because of the rather inefficiently designed Catalytic Crackers they use. It’s the residual olefins and diolefins that gum up your poor car.
It’s a fact, you get better quality gas from a refinery without a cat cracker.
Anyway, I’ve said it before, and I’ll say it again. Housing prices are STILL out of sync with where they should be. Median house prices have historically been 3 to 4 times the median income in an area.
Until we get back to that norm, prices will keep dropping. My best guess, is we’ll see 1998-1999 prices before this is over.
Which is, all things considered, where prices ought to be. In 2007, our median income in Tacoma was $37,879. That justifies a median house price between $113,000 and $151,000.
We got a way to fall still.
M Mr.Sniggles November 4, 2008
The economy … who cares? Let it do it’s thing. The media should quit talking about it and the government should quit bailing out irresponsible losers. We’ll be fine.