That means there will be no more interest rate hikes. The Federal Reserve and the European central banks are now focused on oil and will not raise interest rates again this year. Looking ahead, I believe it will take time to convince oil companies that it is financially safe to invest in finding new oil. Neither Europe nor the U.S. is headed for recession. If I am wrong and growth slows more than that, there will be tax cuts and even interest rate cuts.
Governments have plenty of ammunition to use to fight off recession.
Basically what we are seeing is a peculiar situation in oil that cannot last. The longer oil prices stay high, the more likely that oil companies will start drilling, and the more likely that oil will come down. The plunge is a gross overreaction. Even if film eventually disappears and Kodak shrinks to a much smaller company, the strong cash flows and profits in the meanwhile make the stock worth more than the current price. Visit Investor's World for more information about his award-winning advisory service.