Here's my interview on KEYE TV regarding the most recent steep drop in oil prices and its potential effect on the stock market and Texas economy.
By the end of trading on Friday, the New York Stock Exchange was down 391 points for the day, 1,437 points from two weeks ago. The reason: the plummeting price of crude oil and a faltering Chinese economy.
"There are some major headwinds moving forward," said Dr. Vance Ginn, economist for the Texas Public Policy Foundation. "We're almost in correction territory and when you look at the oil prices are down more than 20 percent since the beginning of the year which is what we call a bear market."
The price of crude oil has been a concern in Texas for months, as oil and gas companies lay off people. But for now, Dr. Ginn says don't panic about your 401k. "We're seeing substantial volatility, so this may not be the time to pull everything out," he said, adding it might be a good idea to wait and watch. Dr. Ginn says you should check with your financial advisor if you're nervous.
The bright spot right now is those low, low gas prices. At the Buccee's in Bastrop, KEYE TV caught up with drivers filling up. "At the high prices, it was 50 bucks. And now it's about 20, 30," said one man who was filling up his SUV.
Latrice Newton stopped on her way from San Antonio. "This is a wonderful thing for my budget. I live in San Antonio and I'm seeing $1.60 so to stop and see it at $1.44, it's great," she said.
But while gas prices might be freeing up some of your budget, Dr. Ginn says you might want to be putting that savings away. "It's important for Texans to be able to save for a rainy day just in case something does happen in the future," he said.
Vance Ginn, Ph.D.