Market Flows

OPEC went with the Extremists, and decided to cut Oil production. Is this a Disaster?–No! Will it actually impact the price of Oil?–Basically, it will introduce a 2-Day lag in the Markets for Oil to reach its equilibrium Price, with the Oil Capture spread slightly over 0.21 up to a 2 million barrel per day drop in Oil. What it will not do is maintain the Price of Oil, the hope of some members of a oligarchy. OPEC should realize that there must be a Cut of over 4 million barrels per Day to actually produce genuine support to Oil prices, a Production level which would cut Consumption far faster than Price; OPEC nations themselves suffering from a major Recession due to their loss of Oil revenues. Political discontent also increases some 34% faster when Average Incomes are either close to Poverty levels, or 18% and Greater than the Norm Average Income in Advanced Industrialized Nations. Recessions enjoin instability, and Violence increases functionally with the loss of democratic involvement in the political process. The Extremists in OPEC should realize that they have the most to lose under recessionary de-stabilization.

The Malls are suffering because they cannot find Venders, especially the larger Chains. There is no statistical evidence to be found as yet, but the larger Chain Retails are building Stand-Alone Units, rather than Mall investiture where Space Vacancies are a great Risk. I believe that the long-term Tendency will be to introduce interior Small Business Rentals to allied businesses by the larger Chains. A great Part of these decisions come with the Understanding that their clientele is Need-driven, and Mall access leads to Purchase fund diffusion by Customers traveling through the traditional Strip-Mall environment. This later Impact is far more important under Recessionary conditions than under an economic growth environment. Stand Alone Units provide the larger Chains with accessory Purchase capture denied in Mall setups.

The article about Apple expresses the real Problems for larger Retail; there being insufficient differentiation of Product, and Apple Share price fell 4%. A shrinking Consumption dollar demands greater distinction of Product to acquire Consumer dollars. Apple’s new line failed to generate enthusiastic compulsion to Buy, and Apple Stock absorbed the greater degree of that loss of Product loyalty. Recessionary conditions are starting to apply, whether We are actually even subject to a Recession, and Retail must realize that Customers want improved Performance and Style, to gain their commitment to Cash outlays. It is not as simple as the traditional Cash Flow format of Growth. lgl