Ask yourself a simple question...what caused the bank overexposure? In plain English - millions of loans with original rates of 1-2% during the honeymoon period. After the honeymoon period this became suddenly 5-6%. What was the reason they became 5-6%? The Fed put up interest rates to curb inflation. Why did inflation occur and rates increase so rapidly in 3 years? ...cause higher fuel and energy costs flowed through the economy igniting the inflation genie. If rates had of stayed low there would not have been anywhere near the amount of mortgage defaults that did eventually occur. It was the huge amount of defaults which pricked the housing bubble. The problem the banks made is that they seriously underestimated the risk to mortgage holders should rates go higher, as they did, once these subprime loans matured. I hope that explains what I mean when I say that the core underlying cause of this mess was the increase in crude an the flow on effect it had on inflation/rates and the subprime bubble.
high oil price weren't the cause of the market correction, it was excess speculation and overleverage market. or house built on cards and when all the players left the game. the market crash. high oil prices was caused by speculation on leveraged positions. or market manipulation. the market regulators are seriously going to make market manipulation illegal again.
you know what, i'm surprised no hedge fund or broker or Investment banker isn't in jail for oil market manipulation.
Both housing and high oil prices where the cause and both came about through over-extended credit markets.
You're not here to tell us "you told us so," but you're quoting you're own posts? Well, you're wrong, and I'm here to tell you so. You were "short everything" since 2005? Is that why you haven't posted in awhile? You were living in a cardboard box? Or, let me guess, you held those shorts for 3 1/2 years, right? Nice work, George Soros. If crude stayed above $65 we are looking at Dow 5000 and Nas 200? Did you really type that crap in 2005? And now you're posting it again because you want a pat on the back? Go back to your cardboard box. So, let me summarize. If crude goes above $65, the fed will raise interest rates by 400, inflation will go through the roof, the markets will capitulate and drop to Dow 5000 and Nas 200. And you were short everything while the market went straight up for almost 2 1/2 years. Are you currently accepting new clients? I want a piece of the action.
The problem that I see happening is that when this market turns around and things improve, crude will again shoot up and so continues the vicious circle. Inflation will again be the feds major concern. I can this boom / bust scenerio continuing indefinitely unless we can substitute our reliance on fossil fuels.
I hereby grant you The lifetime award for exceptional achievements in douchebaggery. Go away, you stupid fuck.