Behind the Headlines

Why Oil's Plunge hasn't Sparked a Rally

Stephen Leeb
Friday, March 27, 2015

In the past, sharp drops in oil prices have led to big market rallies. So what’s different this time around? After all, cheaper oil remains tantamount to a major tax cut for consumers, essentially free money that boosts spending and provides a lift for the economy.

All true. But what’s changed is that today an equally potent effect from lower oil prices is that they’ve knocked the bejesus out of the country’s most dynamic industry, oil production. While we expect the benefits from lower oil to exert the bigger pull, we don’t look for the kinds of market rallies—of 30 percent and... Read more about Why Oil's Plunge hasn't Sparked a Rally

Trucks, Trains and Gains

Stephen Leeb
Friday, January 30, 2015

The U.S. economy is undergoing a significant transition—from consumer-driven to trade-driven. The shift puts the spotlight on two sectors:  transportation and infrastructure, both critical to support the burgeoning trade between the U.S. and other nations.

From World War II on, consumer buying propelled growth, accelerating from about 60 percent of GDP in the late 1960s to a high near 70 percent early this decade. This, however, will likely mark the peak for a long time to come as the remnants of the baby boom generation march past the age of 50, typically when personal consumption... Read more about Trucks, Trains and Gains

The Real Reason for $50 Oil

Stephen Leeb
Friday, January 23, 2015

Talk about oil these days frequently focuses on its extreme sensitivity to supply and demand. Between 2011 and 2014, worldwide demand for oil increased by about 3 million barrels per day, despite a decline of one million barrels in European demand. During the same period, non-OPEC supply increased by a little less than 4 million barrels a day. Production from fracking and other non-conventional oil in North America accounted for over 100 percent of the gain as production for other non-OPEC producers declined slightly. In other words, for the oil market to have stayed in balance, OPEC... Read more about The Real Reason for $50 Oil

Our Predictions for 2015

Stephen Leeb
Friday, January 2, 2015

As we enter 2015, we think a case can be made that the next 12 to 24 months will go down in history as the most important in the history of capitalism and the West. As it stands now we think—and desperately hope we are wrong—that the period immediately ahead will be one in which the East establishes itself as at least equal and probably more than equal to the West. It could easily be a time in which the dollar’s days as the world’s reserve currency clearly become limited. And it may be a period, as we explain below, in which that ever-narrow tight rope the West has walked between inflation... Read more about Our Predictions for 2015

How to Profit from Trough in Oil

Stephen Leeb
Monday, December 8, 2014

The sharp fall in oil prices engineered by Saudi Arabia will likely be fairly short lived, and indeed sets the stage for the next major rally in oil prices. Though oil prices could stay at or well below recent levels for at least another 6 to 9 months, within the next 12 to 18 months, odds look much better than 50-50 that oil will spike closer to all-time highs than languish at current prices. The Saudi actions will have significant short- and longer-term economic and political implications; these could prove foundational vis-à-vis how to position your portfolio. Shorter term it brings us... Read more about How to Profit from Trough in Oil