Thank you Thomas Paine and CNBC contributors Fred Imbert and Ryan Browne for the title and inspiration for this post. Paine’s pamphlet Thomas Painepenned during the Revolutionary War, did indeed reflect dire times in our history. Meanwhile, CNBC’s post-market post (Dow drops 200 points on worries about global economic growth–11/9/18) reflected on potential dire times in the midst of economic prosperity.
Key Points of the CNBC Post
Oil prices have increasingly become the focus of the pundits, as the price weakness might signal a weakening of global economies. Oil prices for many have become a ‘canary in the coal mine’. Any weakness in oil and they are willing to throw in the towel and predict a global economic retrenchment. The problem is that they are never willing to look at oversupply as the culprit (U.S. Oil Production Is Set To Soar Past 12 Million Bpd). The focus always moves to “global slowdown.” Yet forecasts remain, although tempered by trade concerns, for oil demand growth.
“The IEA cut its estimate for global oil-demand growth for both 2018 and 2019 by about 110,000 barrels a day to 1.3 million and 1.4 million barrels a day respectively. The revision also reflected changes in the way the agency assesses Chinese consumption. Both global demand and supply are close to hitting 100 million barrels a day for the first time.”
(source, Bloomberg, International Energy Agency)
We saw the market go into a tailspin in late 2015 and early 2016 for exactly the same reason. I wrote in March of 2016:
