...and in the "DUH!" dept. we have...

[smokey the elder]

http://news.yahoo.com/s/ap/20080910/...il_speculation

WASHINGTON - Speculation by large investors — and not supply and demand for oil — were a primary reason for the surge in oil prices during the first half of the year and the more recent price declines, an independent study concluded Wednesday....

I'm SHOCKED! (Not!)

If you look at three different graphs: the runup of the NASDAQ between 1999 and 2000; the runup in housing prices prior to the housing collapse; and the runup in oil, they are quite similar in shape! Oil is complicated because there's an underlying possibility of so-called "peak oil", which means we're getting as much now as we'll ever be able to get. Still, 100% growth in a year for anything keeps proving over and over again to be unsustainable.

[RICHARD]

http://news.yahoo.com/s/ap/20080910/...il_speculation

WASHINGTON - Speculation by large investors — and not supply and demand for oil — were a primary reason for the surge in oil prices during the first half of the year and the more recent price declines, an independent study concluded Wednesday....

I'm SHOCKED! (Not!)

OF course! THose are the pyschics who sit around and predict what is going to happen in the future and screw everyone to make money.

[Laura's Babies]

They need to throw the book at those people and take every cent they made from doing that, then throw them in jail!

[smokey the elder]

Speculation is what damaged all 3 markets in terms of supply/demand balance, IMO. The .com boom/bust cycle coupled with Y2K fueled NASDAQ; housing speculation and ridiculous mortgages fueled the housing crisis, and the weak dollar and all the other markets tanking fueled (pardon the pun!) oil and the other commodities. From what I understand about commodities trading, oil has different rules than the other ones (grain, gold, etc.) and thus can be more volatile. But it's always the lower and middle classes that get squeezed in the middle.

[Randi]

They need to throw the book at those people and take every cent they made from doing that, then throw them in jail!

The speculation by all those people are simply disgusting!! They all seem to think they can get money for nothing! The greed in this world!!

[smokey the elder]

The worst part of it is, they think it won't happen "this time", that the bubble won't burst. That 30-100% year to year growth rates are sustainable. The only way you get that kind of growth is with a new tech or product, very early in its introduction, where the absolute numbers are small. It's much easier to go from selling 10 widgets to 20 widgets than from selling 1E6 widgest to 2E6 widgets, but both are 100% growth rates. These bubbles trap unwary investors, which are often people who bet the farm chasing the stock, commodity, etc. It just makes me wince to see how naive people can be. When the stupid mortgages came out a few years ago (zero down, low "teaser rates" etc.) I would rant at the TV screen, imploring people not to be suckers and fall for this!

[RICHARD]

When the stupid mortgages came out a few years ago (zero down, low "teaser rates" etc.) I would rant at the TV screen, imploring people not to be suckers and fall for this!

And how those offers influenced other industries to go "no payments until 2010".


Here in CA the furniture industry had taken it on the chin-Two major chains have gone belly up and the smaller businesses are really taken the hit.

People put a down on a house when they saw they might pay 1k monthly, then go and buy cars, boats, furnishings and never thought about saving the extra money they had. People are now abandoning their homes when they default - along with the other purchases/bills they accumulated.

As the banks repo the homes, they will discount the prices for the properties to make the money they lost on the initial sale. IN another year those homes will be snapped up by people who will be able to afford homes. THe housing industry will grow again and maybe there will be more federal rules in place to keep this from ahppening again.

People want lesser Big Brother in their lives, but when things go wrong we have to depend on him to bail our sorry butts out.

[RICHARD]

Notice that in the last few weeks that gas, per barrel has gone down almost 45 dollars.

THe FWs that were speculating are laying low because they were found out.
I hope the bought all kinds of nice things they'll have to return soon.

I hope we get some Enron executive justice outta this.

[smokey the elder]

The mortgage meltdown caused by the latest bubble of greed has taken out Lehman Bros bank and Merrill Lynch is being bought out by Bank of America. No big surprise, Wall St. is tanking. BUT..."they" say there's no reason to panic, 98% of the banks are solvent. But what if the 2% of banks that fail have a disproportionate amount of the money? I think there is a lot of money being stashed in mattresses and empty mason jars about now. I don't even want to look at my 401(k). Ugh.

[Lady's Human]

But Smokey, wasn't there a claim sometime about a decade ago that we had defeated the business cycle?

[smokey the elder]

Business cycles are like weather ones; they seem to have a mind of their own, but are somewhat predictable, in a fractal, chaotic sort of way. One could probably do pretty well investing if they paid attention to them. One of these days I'd love to get some bubble runups and actually try to fit a mathematical model to them. I bet they'd scale pretty close. A lot of unrelated stuff in nature follows similar scaling rules that has physicists and other scientists baffled. Maybe ecomonic stuff does the same thing.

[Edwina's Secretary]

The mortgage meltdown caused by the latest bubble of greed has taken out Lehman Bros bank and Merrill Lynch is being bought out by Bank of America. No big surprise, Wall St. is tanking. BUT..."they" say there's no reason to panic, 98% of the banks are solvent. But what if the 2% of banks that fail have a disproportionate amount of the money? I think there is a lot of money being stashed in mattresses and empty mason jars about now. I don't even want to look at my 401(k). Ugh.

But what kind of an example has the current administration set? Cut taxes and raise spending. Start an REALLY expensive war.

Sort of like...quit your job and then buy a house.

Borrow boat loads of money and declare the economy sound. What a disaster!

[RICHARD]

But Smokey, wasn't there a claim sometime about a decade ago that we had defeated the business cycle?

With Lance Armstrong coming outta retirement the US of A will be back cycling again!