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To: DannyTN

While I think derivatives were a joke and legalized gambling for the banking industry and the main cause of the problem, I have wondered where all that excess cash from the run up in oil prices went, not only from the U.S, but from around the world. It had to have a major effect on all economies.


6 posted on 10/31/2011 8:52:18 AM PDT by DCmarcher-976453
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To: DCmarcher-976453
It has gone into holes in the ground, all over. The Bakken, the Three Forks, the Barnett, the Marcellus, the Eagle Ford, just to name a few. It has gone into research into new sources of oil and gas, drilling techniques, production techniques, and hiring thousands of people to do the work.

The companies which benefitted most had already spent hundreds of millions drilling and completing wells when there was relatively little market for the product ($20/bbl), and when the price went up had the oil to sell.

And don't forget the billions the Federal Government collected in taxes, on the order of two dollars for every dollar in profit for the oil companies--not to mention the billions in idle offshore lease block leases and 'fines' and cleanup costs (a cleanup the government hindered from day one) for BP.

In the meantime, the banks were forced to make loans in declining neighborhoods they would not have made loans in before to people with no income, no job, and no assets (NINJA loans). That createed a bubble, home equity loans gave people the ability to mine the bubble for cash as the 'value' of their property went up, and the derrivatives insured the lenders against loss. We picked up some of the tab, but it isn't all over yet--and all we have to show for that is a bill.

At least I can drive somewhere on $4 gas.

9 posted on 10/31/2011 9:08:11 AM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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