News and commentary

Crude Oil Bubble vs the Housing Bubble

By Richard Suttmeier
Updated: Tuesday, June 24 2008 07:06:AM

As the Crude Oil Bubble inflates we see wide swings. It’s called the parabolic rise, it’s from which bubbles pop. The bulls say that higher crude oil reflects global supply and demand. Let’s find out! Increase margin requirements, outlaw those leveraged positions.
 
Lee Raymond after hurricane Katrina testified that at $60 crude oils included $20 of speculation.
 
I am not against speculation but make it more expensive. Supply and demand leveraged just to make a buck is sick.
 
Pension funds have been investing for years in what's called Exxon Mobil etc, etc.
 
The Housing Bulls in 2005 told subprime borrowers that the price of their homes would continue to rise at 20% a year because of supply and demand, and that low rates would allow them to refinance with no problems.
 
They said that the planned homes were being built in anticipation that millions of Baby Boomers would be buying a second home in Florida, Las Vegas, Arizona, Southern California - etc, etc.
 
No money down and negative amortization loans were the leverage. Buying and flipping pre-construction was the same as buying crude oil futures.
 
Flippers were never going to live in that home, just as oil speculators have no interest in taking delivery of a ship load of oil!