Penn Wealth Publishing

2015.01.25 Journal of Wealth & Success Vol 3 Issue 4

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January 25, 2015 wealth & success volume 3 issue 4 13 wealth & success Copyright 2015. All Rights Reserved. weekly business rePort we refuse to accePt the death of the indoor american shoPPing mall Most adults have fond memories of being a kid and hanging out at the local indoor shopping mall. An iconic 80's movie, Fast Times at Ridgemont High, glorified these memories, with many of the scenes taking place at The Ridgemont Mall (which was actually the Sherman Oaks Galleria). Looking back, it now appears that the 1980s were the heyday for the indoor mall, the crescendo of a tune that was written in the 1950s. Growing up in the northern part of Kansas City, we were lucky enough to have one of the first suburban shopping malls in the country, The Antioch Shopping Center. The burgeoning mall movement came about in the wonderfully-American decade of the 1950s. As the middle class began its rapid expansion, young families started their trek to the suburbs. Regular travel to the downtown shopping districts became impractical, and the suburban shopping mall movement began. For four decades, local residents flocked to the comfort and vari- ety offered by the local mall. Schoolchildren performed musical acts, water fountains belied the freezing temperatures outside, and food courts offered gastronomical delights. Before heading back to shop, one could grab a newfangled frozen drink known as an Orange Julius. You could even bring a date to the movies, with a theatre anchoring one corner of the structure. Good times. Good times. This past week, demolition crews began their grim task at Cleveland's Randall Park Mall, once the world's largest shopping center. Built in 1976, the property will be re-purposed into an industrial park. Perhaps we can blame the army of mall walkers—geriatrics who rarely carry shopping bags but, rather, see the indoor mall as their personal, free, sports facility. Don't get in their way as you try to enter a store, wallet in hand. Or maybe we can blame the roving packs of ne'r do wells; the teens in groups of four or five who seem to just be looking for trouble. Both of these personal theories are backed up by the indoor shopping mall's replacement— the upscale, multipurpose, outdoor shopping centers springing up like dandelions across the fruited plain. Oh well, at least now it will be easier getting in the front door—wallet in hand. Randall Park Mall, Cleveland, Ohio oil Prices Plunged 48% in 2014, biggest droP since 2008 financial crisis Not to sound like a broken record, but because I really cannot stand Goldman Sachs I bring it up again: back in June of 2014, as oil prices were rising, the commodities "experts" at GS began predicting $200 per barrel oil prices. Now that the ink had dried on 2014, we realize just how wrong these masters of the universe really were. Oil futures, in fact, closed out 2014 down a whopping 48% for the year, settling in at $53 and some change. This represents the largest drop in crude since 2008, when we were in the midst of the largest banking crisis since the 1930s. Interestingly, more and more financial journalists are now bemoan- ing the fact that oil and gas prices dropped so quickly. We could simply chalk it up to the fact that most journalists are fatalists, and scary news sells better than rosy news, but let's look at why this is bunk. First, we have the simple and visceral schadenfreude of watching Goldman fall on their face again. But beyond that, let's consider the billions of extra dollars American consumers had in their wallets to save or, more likely, spend on other stuff. Or consider how the punk Vlad Putin has had his wings clipped since the invasion of Crimea. About 70% of Russia's exports consist of oil and gas, and the coun- try loses about $2 billion for every dollar drop in the price of crude. There is virtually no way the nation avoids a deep recession in 2015. Good news. Ditto Venezuela. The anti-American government in the South American country has relied on oil profits to remain in power. After Chavez assumed room temperature —greatly upsetting socialist actor Danny Glover—his trainee, Nicolas Madura stepped in to carry on the great Red Revolution. A really good tyrant is hard to replace, and Madura is not able to effectively lie about America the way Chavez did, especially with his country in tat- ters due to plunging oil. Another plus: the country can no longer afford to send "free" oil to Cuba with prices this low. Bad news for Cuba, good news for the free world. Ditto Brazil to a lesser extent. Although not as vehemently anti-American as Venezuela, the leftist government of Dilma Rousseff takes every opportunity to do their best Occupy Wall Street imitation, blaming America's wealth for its poor citizens starving in the country's bar- rios. She got re-elected last year, which shows how brainwashed the Brazilians really are, so now she owns the problem. Good news. Everyone expected OPEC to cut production at its November meet- ing to jack up prices, so why didn't it? A couple of theories, neither of which are mutually exclusive. First, the Saudis felt as though they were bearing the brunt of the actual production cuts, which is true. They wanted Russia, Venezuela, and other OPEC members to do the heavy lifting this time and cut their own production, which wasn't going to happen. Second, many experts believe that the Saudis are trying to knock America's energy renaissance down to size. Ten years ago, nobody predicted the amount of energy the US would be able to produce due to fracking and other technological advancements, and it has thrown a monkey wrench in the OPEC machinery. While it is certainly true that American oil companies, from upstream to downstream, are hurt by falling prices. However, oil and gas down at these price levels are a huge net positive for this country. Sure, there will be smaller waiting lists for electric vehicles and solar panels for rooftops, but that nascent industry will do just fine. If there is some bad news in this story, it involves our close ally Australia. With the Chinese economic slowdown and lower energy and commodity prices, Australia's economy is getting hurt. Western Australia, which has only half-joked about secession in the recent past, has been especially hard hit, as that region is responsible for most of the country's com- modity production. Synopsis? Tune out the garbage you hear about lower energy prices harm- ing the US. This is a wonderful period of cheap energy, and we should relish the effect it is having on the average American's pocketbook, and the damaging effect it is having on our enemies' ability to cause chaos around the world.

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