[SinisterBlueCat]

$this->bbcode_second_pass_quote('NotMyBlood', 'A')nd in todays "flock of seagulls" world,

[NotMyBlood]

I wonder if there is any work on the history of Assest Bubbles?

Yes, Im sure since day 1 there have always been supply and demand issues, but I would think the "Asset Bubbles" we have in mind is also a product of the Oil/Technology/Internet Age? But I really have no idea.

Gone Researching....The internet is the greatest tool for the common man ever produced.

[NotMyBlood]

Okay, I understand the tulip jokes now.

Yeah, weve always been a flock. Maybe flock wasn't the best word. Sheep??

[OilIsMastery]

If I had to give you an answer I would say private equity.

http://jeffmatthewsisnotmakingthisup.bl ... ready.html

$this->bbcode_second_pass_quote('', 'I')n the 1980s, Wall Street Power brokers wore red suspenders, dined at Le Cirque, and made their money in junk bonds and arbitrage. A decade later they wore polo shirts and played Foosball at the venture capital firms that line Silicon Valley's Sand Hill Road, reaping billions from tech. Today Wall Street's newest titans can be found every Monday morning gathered around a long, slightly scuffed conference table in a windowless boardroom high above Park Avenue, the home of the Blackstone Group.

Wearing white shirts and pinstriped suits that underscore their Harvard Business School credentials, Blackstone's top dealmakers have learned well the techniques pioneered by previous masters. What makes them different is that they also happen to dominate the iconic business of this decade - private equity.

[SinisterBlueCat]

i have been kind of noodling this thread in my head today...and i remembered a line that rhett butler said in the book gone with the wind

i am paraphrasing....

'there is slow money to be made on the building of an empire, but fast money on the crack up of one.'

that sounds about right.

[NotMyBlood]

Makes sense to me.

It seems to me, for various reasons, considering all the factors of todays world, that after the real estate bubble dust settles, the mentatility of the "quick buck" will create another bubble in something. I just wish I had a crystal ball.

[evilgenius]

Ha, ha, maybe the next bubble will be in MREs and survivalist literature?

[jboogy]

No bubble , credit is drying up everywhere.Look for the asians and saudis to accelerate hard asset purchases in this country and the E.U.-I wouldn't be surprised to see holders of dollars start to really unload their positions.U.S. is becoming economic poison to rest of the world.

[Cloud9]

Look at the railroad collapse in the last quarter of the 19th century. That collapse ruined a lot of British investors but it made J.P Morgan.

[Graeme]

Is the Oil and Energy Bubble About to Burst?

$this->bbcode_second_pass_quote('', 'W')e are hearing from the world's soon-to-be largest economy that there is a definite problem ahead to keep a stable supply with the prices this high. Friday we learned that Chinese government decided to increase domestic gasoline prices by 10% in order to reduce demand, reduce never-ending fuel appetite of its growing economy, and fight the crazing energy market. This move could slow demand, and knowing that most of today's demand growth does come from China, we could foresee a great impact on global oil prices.

The McKinsey Global Institute stated that "ending fuel subsidies worldwide would cut demand for transportation fuels by three million barrels a day." Sinopec (SHI), one of the largest Chinese oil producers, has stated that it is under big pressure from the rising crude prices. "We will try the best to ensure a stable supply of fuel in the market, but it's a big challenge for us," Sinopec's CFO stated this week.

[pup55]

Let us review the four things we always review when this sort of conversation starts:

1. Are people using any less oil? No, in fact, with the exception of Japan, people are using just as much oil as they ever did even though it is X number of times more expensive than it was a few years ago.

2. Is there any headline that can show up in tomorrow's newspaper that will cause a drastic decrease in the price of oil? No. In fact, there continues to be a dozen things that could show up and send that stuff over $100.

3. Has China stopped growing? No, per the above article, their economy is growing at 11% and people are getting into fist fights to fuel up their new cars.

4. Is there any sign of financial armageddon that could hit the US that is severe enough to kill the economy and cause demand to go down? Well, I have to admit I am a little worried about this one, but with Helicopter Ben at the printing press, we will get through the 2008 election cycle with slow growth. We have already calculated that it will take a pretty significant downturn to kill off energy demand, anyway.

We can discuss some detail around some of these things, but I say the trend is your friend until at least one if not more of these things turns the other way.

Edit:

$this->bbcode_second_pass_quote('', 'D')isclosure: Author has a short position in the above-mentioned securities

[DantesPeak]

I don't know how the author of the article got the basic facts so wrong.

Yesterday China said that it was essentially opening the floodgates of imported oil and products, being some price controls had ended up causing shortages.

If anything, China oil demands will now reach record highs.

[DefiledEngine]

Yes oil demand will probably rise, but that doesn't keep the goverments from trying to put breaks on the rise.

[Concerned]

$this->bbcode_second_pass_quote('DefiledEngine', 'Y')es oil demand will probably rise, but that doesn't keep the goverments from trying to put breaks on the rise.

[jeezlouise]

$this->bbcode_second_pass_quote('Concerned', ' ')If there were no supply problem, that is unlimited light sweet crude able to be pumped would there still be a "demand problem"?

Economists and feel good pundits god bless them I think they must have been the originators of spin.

[AirlinePilot]

I was just now watching CNBC and a story about oil related prices.
One respected analyst actually believes OPEC has at it's immediate disposal 4mbpd of "excess supply" and there in lies your problem.

I fail to grasp how they can get it so wrong at this critical juncture.

If paid, high level analysts are making these kinds of errors in factual analysis and then advising large multinational corporations and governments on future outlooks and plans, we are basically doomed.

pup55,

An excellent recounting of the basic problems driving price at this time in history. Just excellent.

[KevO]

Jevons Paradox

[thor]

$this->bbcode_second_pass_quote('pup55', '1'). Are people using any less oil? No, in fact, with the exception of Japan, people are using just as much oil as they ever did even though it is X number of times more expensive than it was a few years ago.

[pup55]

$this->bbcode_second_pass_quote('', 't')he trend is your friend

[dukey]

the US economy is melting down
the currency is collapsing ..

1 US dollar is now 92 canadian cents !!!

It's possible if the US totally goes over the edge we will see reduced demand.