Global "Oil Shock" Rattles World Stock markets

[katty]

more: http://www.321energy.com/editorials/dorsch/dorsch031408.html

Global "Oil Shock" Rattles World Stock markets
Gary Dorsch, Editor, Global Money Trends
March 14, 2008
[e-mail]

Cleaning up the mess that Mr Greenspan left behind was never going to be easy. Banks and brokers around the world face more than half-trillion dollars in write-offs as a consequence of the US sub-prime mortgage crisis, which is spreading from the US property market and roiling global stock markets. It’s toppled the US economy into a recession and the tremors are also rattling Asian stock markets.

Roughly $7 trillion has been wiped from world stock markets since the beginning of the year amid fears of a severe US economic recession and financial institutions reporting more mega losses. “The market crisis will preoccupy us well into 2008,” he said German Finance Minister Peer Steinbrueck on Feb 15th. “The financial risks securitized by banks contained packaged explosives,” and he accused rating agencies of having a conflict of interest in the role they played in the process.

So far, the Bernanke Federal Reserve has pumped more than half-a-trillion dollars into the markets with open market operations and special emergency lending schemes, to help cushion the blow to the US economy and stock markets. However, there’s evidence that the Fed’s prescription for dealing with the sub-prime debt crisis, is actually making matters much worse, and leading to “Stagflation.”

As the Fed’s rate cuts and massive money injections filter through the financial system, it weighs heavily on the US dollar, and in turn, a weaker dollar inflates huge bubbles in the global commodities markets.

[texastoast]

1. The banks who lent stupidly and their stockholders

should take the hit.

No Bush bailout. No taxpayer burden.

[katty]

2. yep, should, but the taxpayer will be doing: corporate bailout

[texastoast]

4. Just like the Reagan years and the S&L crisis

How can these stupid Republican voters ever think that the economy is always better under a puke? It is just beyond me.

Every one of us needs to be going to our town hall meetings this summer and raising nine kinds of hell about this as well as bombarding their offices with serious rant. You know shrub is going advocate bailing them out. We need to start a LTTE campaign against this.

[katty]

7. yeah, i know, the rePigs blather on as the titanic is sinking

[aint_no_life_nowhere]

6. The Chimp and his Republicans hate big government involvement don't they?

Oh that's right, it's only when big government is asked to bail out the little people.

[Wizard777]

3. I think these OPEC sanctions against the world for our war in Iraq will be far more effective than

any UN sanctions against us for the illegal war.

[DJ13]

5. Good article, up until they tried tying it to "peak oil"

Peak oil is a PR campaign to rationalize wanton greed, it was also used back in the 70's when ever rising oil last created a period of hyper inflation.

Back then we were supposed to be out of oil before the turn of the century (8 years ago).

[Speck Tater]

8. Do you have ANY facts to back up that ridiculous claim?

For example: WHO said we'd be out of oil by the turn of the century? I certainly don't recall ever reading such a ridiculous prediction anywhere in the peak oil literature. In fact, the peak oil proponents agree that we will NEVER run out of oil. That's not the problem. The problem is that as demand increases (for example, China upped their imports by 18% last year) the supply cannot be expanded to meet the new demand, driving prices up.

May 2005 saw the largest number of barrels of oil per day pumped out of the ground. No month before that ever had as much oil pumped out of the ground, and NO MONTH SINCE THEN has matched that output. Old oil fields are being de0pleted faster than new fields are being discovered.

If you actually believe that peak oil is a "PR campaign", you are in for a very rude shock when increasing prices spot shortages continue to get worse as the supply of oil becomes shorter and shorter. Mexico's giant Cantarell oil field hgas fallen by 11% since 2005 and is in terminal decline. PEMEX says since Mexico's own demand for oil is increasing it may be unable to export any oil at all in another four years. That's important because Mexico is the third largest supplier to the U.S.

England's North Sea field is also in terminal decline.

I seriously suggest you do some research before claiming that peak oil is PR. That claim is patently ridiculous in view of the facts of oil depletion worldwide.

[Jeffersons Ghost]

9. K&R your comments make this OP particularly informative fiziwig...

Whatever the reason reduced or static supply, with ever-increasing demand = higher overall prices and PROFIT MARGINS...

isn't that right, Exxon?

[Speck Tater]

10. Not only are the oil companies milking this for more profit,

but they also have more profit for the simple reason that they are cutting way back on what they used to spend on oil exploration and development. These companies realize that the planet has already been thoroughly explored for oil, and there just isn't very much undiscovered oil left to be found. So all those millions they used to spend on exploration they are now just putting in their pockets instead.

They have also stopped building new refineries. Clearly they know something they are not talking about. Clearly they realize that they simply won't need more refineries if they can't find more oil to pump into those new refineries.

[katty]

11. that's what my dad keeps saying, he worked in the ME and

in various related businesses