Tonnage up in May, oil hits $142
That's seven months in a row that have been better than 2006/2007 (year over year), the first month that was better than the previous, seasonally adjusted (month to month). And yet, oil hit...$142...!!!
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Just wait until the bottom falls out of the oil market. Things are certainly going to get very interesting very fast. :lol: It should make for an interesting Christmas this year.
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Artificially inflated pricing, such as what we are seeing in the oil market, have a life cycle. I am not sure where Rev gets his 3rd quarter estimate, but it may not be too far off. I have no idea of when this bubble will burst, but at some point it will. When it does, fortunes will be lost overnight. Those who make money on the way up get rich. Those who jump in when it is at the peak usually lose their shirts. The trick is in knowing where the apex lies and to get out before it reaches that point. Greed will destroy many of these investors. Some will enter the market late or stay in too long. For speculators to make money someone will need to lose money. That is the way it works.
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I am not sure we will see a turnaround during the 3rd quarter. These carriers have stockholders to keep at bay. It is in their best interest to keep things upbeat. I hope these people are right. Personally, I think things will be difficult through much of next near. I hope that I am wrong. The key will be in how fuel prices react. If prices remain the same or continue to climb, then the economy will stay sluggish or slow further. If prices drop dramatically then we could see some improvement in the economy. Tonnage is up by a small percentage. That doesn't necessarily mean that the economy is doing better. It only means that tonnage is up. When profits are up then I believe you can say things are better. 8)
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We are very close to the oil bubble going blammo.... The Saudis know it and they are nervous. Watch what happens after the Olympics.... JMO
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I am glad to hear the Saudi's are nervous. They should be nervous. If we started actively drilling and found some large reserves, their profits would go into the toilet. The free market hasn't been in play in the oil market for more than 30 years. Prices have been artificially controlled by OPEC, which is an oil monopoly. A monopoly is illegal in this country, but not in other parts of the world.
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