Let me take you back to the beginning of March last year, half a year before Fox Business Network gained the market share it truly deserved.
Recessions aren't a "start on Monday, gone on Tuesday" phenomenon. The indicators that show whether a recession has happened last for months. Sometimes years. So this was advice to get into XOM and lock yourself in at the low price of $70.01, and stay there.
Uh, bad news I'm afraid.
More below the fold!
What makes this matter more interesting is WHY Fox News declared ExxonMobil (XOM) such a good investment opportunity in the spring of 2007.
The smoking gun is the previous (then) recent price for XOM. It was at $77.20 at the beginning of December of 2006, and people were forecasting a rise in the price of crude oil. Not the $200 a barrel forecasts we had earlier this year, but up is up. A slight decrease in the share price, when oil was forecast to rise, could only mean one thing, thought the finance 'experts' at Fox. The price was on a one-way ticket up.
This isn't the first time that someone on the right-wing has pushed the idea that a stock-market value was going to go up and up.
The authors of this book, as it happens, are both members of the American Enterprise Institute. The neocon think tank that released the video by Cheney, just before he became President and CEO of Halliburton, where he said Bush 41 was right not to go into Iraq because pieces would splinter off and it would be a quagmire. The major prediction made by Glassman and Hassett in this book, written in 1999, was that "a sensible target date for Dow 36,000 is early 2005, but it could be reached much earlier..." (1999 edition, p.140).
What the neocons didn't factor in for both predictions is that things change. Situations change. The Dow wasn't sustainable at its 1990s rate of growth because it was built on the idea of financing internet start-ups that had no track record. Just like the problems with the indexes now, it was all based on a level of confidence.
In fact, the market indexes have ALWAYS been based on the emotions of people. That's why I told people to get out of the markets on December 1st last year... as soon as commentators started using the word "jitters", a word used just before other crashes in history, I knew it was time to switch my 401(k) allocations into the safety of slow-but-steady guaranteed earnings for a while. The Dow was at 14,000 or so then. Looks like I was right. I hope you took my advice.
For the price of oil: once people had to pay more at the pump, they tightened their belts. But the current economic downturn will probably impose stricter rules on you using whatever credit you have access to. So even with the expected decrease in fuel costs caused by fuel conservation (translation: we were right on Kos, suck it contards), people aren't rushing out to buy gas guzzlers again because they just can't get the financing. So oil demand is down in recent weeks by about 9% from a year ago.
So oil prices continue to drop.
So ExxonMobil's share price follows suit.
The moral of this story? Listen to your fellow Kossacks that have a history of being correct. As history will show: we were on the side of facts and proof. And that means we don't make predictions that are always wrong, like the neocons.