[Rob Hood]

http://www.autoextremist.com/current/2008/7/8/rants-453.html

Was listening to some newsradio today - many analysts are painting a bleak picture. Heard that Hummer and Saab were going to be let go, maybe more. I've already seen where Chevy is not sponsoring several NASCAR races next year.

Rick Wagoner is supposed to deliver an announcement tomorrow morning at 0830 EST. Should be worth listening to.

This post has been edited by Rob Hood: Jul 15 2008, 05:59 AM

[Rob Hood]

I think what surprises me is that the price of oil even caught the manufacturers off-guard. I would have thought that they would have been in some type of communication with the oil companies and attempted to avert or slow down the price increase. (That's just my conspiracy hat...) That only leads me to believe that either speculators or OPEC are controlling the cost of oil now.

[trackbird]

That only leads me to believe that either speculators and OPEC are controlling the cost of oil now.

Fixed that for you.

I was originally trying to believe it was supply and demand, but I've spoken to my friends in investment banking and I've been reading anything I can about the current situation. From what I'm seeing, we don't have a shortage. We have supply that may be barely keeping up with demand, but we have no rationing and there are not lines around the block. However, as the value of the dollar slides, crude gets more expensive. As the value of the dollar slides, hedge fund managers buy commodities because they tend to resist the losses associated with a sliding dollar. So, they buy oil to fight the slide of the dollar which runs the price up, which helps promote inflation which causes the dollar to slide. This is turning into a vicious cycle that may take something "signifigant" to climb out of. And, no, I surely don't know what that event will be...

Of course, I've been wrong before.

On the other hand, if I'd realized that we were going to wind up here, I'd have kept my 2002 Z28 as a driver and skipped buying a truck and a dedicated track car. Guess they weren't the only ones caught off guard.