| Where will it End? -- 5/21/2008 |
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The Department of Energy reported a surprise decrease in both oil and gasoline supplies. Here is the question. Are refiners buying less oil because the demand for gasoline is less, thereby reducing supply? This has to come into the equation at some point. The stock markets are now reacting rationally to the meteoric rise in oil prices by going down. Airlines Suffering Big.
American Airlines reported that they will be taking quite a few huge cost cutting measures to counter rocketing fuel prices. First, they are slashing routes by up to 12%. That is HUGE. Second, they will start charging for checked luggage. Lastly, they will be retiring older, less fuel efficient planes. I have had a few questions about Airline stock picks as they look so cheap right now. Stay away. They are not cheap. Stocks can go to 0. With the consumer cutting back, trips that require expensive plane tickets are far from their mind. With Airline corporation expenses skyrocketing out of control due to high fuel costs combined with plummeting demand from the consumer is a recipe for corporate disaster. I would expect more mergers just so they can survive. Get The Limit Order for $6.65/month with a 3 month membership. The Limit Order stock picks continue to outperform the market, Register for free and check it out. |
