[roccman]

The Financial Sector is still coming to terms with the US Subprime Mortgages induced credit crunch, could again be in the line of fire of a new credit crunch caused by crude oil surging to $100, triggering a similar collapse of hedge funds and put the banking sector under renewed pressure as the crude oil credit crunch contagion spreads.

I do not think the author is PO aware...a brief mention of supply and demand does not a peaknik make.

Does not matter - I answer this with a resounding YES!

[stu]

Wow

So let me get this straight. As soon as oil touches $100 then there is some sort of automatic financial trigger within certain companies to conclude that TSHHTF and to sell sell sell!!

[roccman]

$this->bbcode_second_pass_quote('stu', 'W')ow

So let me get this straight. As soon as oil touches $100 then there is some sort of automatic financial trigger within certain companies to conclude that TSHHTF and to sell sell sell!!

[seahorse]

Interestingly, and right on cue? Previously Bullish Goldman Sachs is recommending to take profits and sell oil.


$this->bbcode_second_pass_quote('', ''')Time to take profits'
In a research note released Tuesday, Goldman Sachs analyst Jeffrey Currie wrote: "We are now more cautious on the near-term upside potential for oil prices, as we believe that the recent strong rally will likely bring forward the short-term rebalancing of the market that we expected for the first quarter of next year."
Goldman recommended closing long positions "from a profit-taking perspective than we are trying to call a peak."
Goldman also said it remains positive on oil from a longer-term perspective and views price dips as opportunities to re-establish long positions. At the same time, the brokerage expects crude prices to fall back to $80 a barrel by next April.

[jboogy]

The underlying causes of the first credit crunch were not addressed, simply gussied up with some smooth talk from the talking heads and buried under a new layer of cash via a rate reduction. " Get your hot , fresh greenbacks here !, hot off the presses!"----Bernanke

[bodigami]

...after reading this I've a question: does capitalism implies a "bubble"-"correction" cycle or is it just in this type of capitalism?

[Tanada]

$this->bbcode_second_pass_quote('zensui', '.')..after reading this I've a question: does capitalism implies a "bubble"-"correction" cycle or is it just in this type of capitalism?

[truecougarblue]

Crude oil will not cause the "next" credit crunch because we haven't even gotten started with the ill effects of the current one.

The next few months will be a peaking period in loan resets but they don't taper off until 2010-11. Until that time AT LEAST the loud sucking sound you hear will be liquidity draining from the system. Cash will be king again and Gold will be emperor.

Got cash?

[Armageddon]

$this->bbcode_second_pass_quote('truecougarblue', 'C')rude oil will not cause the "next" credit crunch because we haven't even gotten started with the ill effects of the current one.

The next few months will be a peaking period in loan resets but they don't taper off until 2010-11. Until that time AT LEAST the loud sucking sound you hear will be liquidity draining from the system. Cash will be king again and Gold will be emperor.

Got cash?

[truecougarblue]

System low on cash normally equals deflation. However, until demand destruction takes hold we'll probably continue to see inflation for the things we need whilst seeing huge discounts on luxury items.

There is still an argument to be made for inflation, even hyperinflation as the dollar loses it's status as a reserve currency. My gut tells me the euros and asiatic will not allow the dollar to fall much further. Thier own economies take a tremendous hit when things purchased in euro or yen or yuan become too expensive.

Beyond that point though is the continual pressure on the credit system. The US is a country of debtors, in the interest of maximizing return on investment we leverage using debt. When liquidity goes south it is all too easy to get upside down, be it in stocks, a home, or a small business. Illiquidity is only a small baby step from insolvency, and that's where I think we're at today.

[Twilight]

$this->bbcode_second_pass_quote('Armageddon', 'W')ith a system low on cash, does that mean inflation or deflation? Cutting off cash, via loans is what triggered the great depression.