Stocks Plunge and Gas Prices Follow | NBC Southern California

Stocks Plunge and Gas Prices Follow

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    Melissa Huffschmidt steps up to the pump with a sense of relief. At least the price dipped a bit, and five buck a gallon gas will remain a nightmare for awhile.
    "I think it's great," says Huffschmidt, searching her recollection for better priced days. "I'd love to see it back when it was two dollars a gallon."

    Hmmm. Two dollars a gallon may be a bit much to ask.
    The Auto Club of Southern California says the price of gas has been dropping about a penny a day this week, all across America. In the Los Angeles area, that means self serve regular gas is averaging about $3.75 a gallon. That's still 60 cents a gallon more than this time last year, but at least it's not flirting with four bucks, which fit almost everyone's definition for pain at the pump.
    Then again, if you drive a big pickup truck, as Kathy Vallavares does, this week's drop is not impressive.
    "I can't tell the difference in ten cents," laments Vallaveres. "This truck costs like 70 bucks to fill it up or 65 bucks to fill it up, so I don't really care."
    In truth, Vallaveres says she won't even be impressed if the price continues to drop another 30 cents a gallon or more, as some experts predict. Especially, if the drop is tied to a bad economy.
    "If it means the economy sucks, then it's a bad thing," says Vallaveres.
    She may have a point. Over the past 10 years, rising gas prices have often moved in tandem with an improving economy. Now we have the reverse.
    "The better way to think about it is, if there's a strong stock market, there's a strong oil price," says John Blank, Deputy Chief Economist  with the Los Angeles Development Economic Corporation.
    "It's not true that millions of us with all our decisions are out there setting the price of oil," says Blank.

    Why Lower Gas Prices May Be Bad

    [LA] Why Lower Gas Prices May Be Bad
    It seems like a no brainer, but economists say lower gas prices may not be good. (Published Friday, Aug. 12, 2011)

    So, many drivers here in Southern California would gladly trade falling gas prices for rising 401K's.

    "If the price of a good economy is higher gas, then OK," concedes Kathy Vallavares, as the gas tank on her pickup truck slowly fills up.