BAH! I heard all this about the housing bubble. “There is no bubble,” they said. “Supply and demand,” they said. “There aren’t enough flippers to control the market,” they said. “Home prices only go up,” they said. Bullcrap. It was all bullcrap, and now you are ready to believe the same thing about oil.
Please explain to me WHY oil is up 48% year-to-date alone? Increasing demand? Bullcrap. Oil futures are forward looking and we haven’t even begun to see the world demand destruction caused by these leap-frogging oil prices.
I’ll never remember to say “I told you so”. Take note and remind me when the oil bubble bursts and it becomes obvious to everybody and his brother.
Never mind. The people who told me the NASDAQ was correctly priced because it was a “new economy” and “profits don’t matter” never bothered to come back and eat crow. The people who said there was no housing bubble never bothered to come back and eat crow. Now why would the same type of gullible fools who believe there is no oil bubble be any more likely to eat crow when they are proven as wrong as the previous fools.
No, never mind. You needn’t bother. But I am still waiting for that explanation how issues of supply and demand alone have caused a 48% increase in oil cost year-to-date. I’ll give 20% of that to a collapsing dollar. I also know that the FED must eventually Volker the funds rate and that will strengthen the dollar, IMMEDIATELY lowering the dollar price of oil by 20%.
Now what is the other 28% year-to-date cost rise due to?
Just because housing was a bubble doesn't mean oil is a bubble.
It was all bullcrap, and now you are ready to believe the same thing about oil.
Like you, I called the housing bubble. I moved to Seattle in 2006. Even though I could afford to buy, I chose to rent, and continue to rent, because I realized there was a bubble.
That's because there was data supporting the bubble hypothesis for housing: rents out of line with prices (much cheaper to rent, even without the tax deduction), flippers buying up virtually all new units coming online, etc.
There's zero data to back up the idea that there's an oil bubble.
Please explain to me WHY oil is up 48% year-to-date alone? Increasing demand?
That, and declining production in existing fields, and fewer than expected new finds in exploration.
Bullcrap. Oil futures are forward looking and we haven’t even begun to see the world demand destruction caused by these leap-frogging oil prices.
Both futures and spot prices are high. Futures prices are actually low compared to spot prices right now; there's a sizeable net convenience yield. Inventories are lower than usual for the summer. All the indicators point to a shift in fundamentals as the underlying cause.
If futures speculation were driving the current price, there would be a rise in inventories and futures prices and the net convenience yield would be negative. That's just not what the data show.
Never mind. The people who told me the NASDAQ was correctly priced because it was a “new economy” and “profits don’t matter” never bothered to come back and eat crow.
Unlike with the tech bubble, all the traditional fundamental indicators point to the conclusion current prices are rational: low inventories, high net convenience yield, few new fields coming on line, declining production in existing fields. There's nothing new here. Just good old fashioned analysis.
It's the bubble crowd who's waving their hands and claming everything has changed because of the supposedly evil speculators.
Now why would the same type of gullible fools who believe there is no oil bubble be any more likely to eat crow when they are proven as wrong as the previous fools.
We'll see who eats crow (hint: it's going to be you).
Cheers!