My point wasnt that we are not sensitive to oil prices. We most certainly are. My point was that relative to Tech stocks, the demand curve is alot higher. We double the price of a gallon of gas and most people will still pay. (2000 proved that isnt true of stocks) They will cut back, some, but they will still pay most of the time. Housing is even steeper than oil because we dont all need gasoline (we all use oil in someway, everyday) look at people in downtown areas that are close to work. Many just bike or walk. We all do need some form of housing. (I know all about delivery trucks and moving vans and such, but I am talking about peoples personal decisions to buy, not macroeconomic interactions)
But those with big houses in the country that have to commute will still have to pay, they just may cut back on that ski trip to mammoth or that fishing trip. So demand will fall, but not as much as other things would.
Food is even a steeper demand curve. We may trade down from Steak to hamburger, but we still need to buy SOMETHING.
I dont have to buy your stock, I can move to cheaper areas if I dont like your housing, I can ride a bike if I dont want to pay for gas, but I have to eat something. No matter if it is processed grains themselves or something we fed grains too and then processed, we still have to eat.
