Granted this will look like a self pat on the back, but if I don't do it, no one else will...As I said on 7/15, I would still not buy oil at these levels.
Oil topped out short term on 7/11 at $147.90, then did a retest of that high on 7/15 hitting $147.30 the day of my post above. It has fallen every day since my post and closed at a new low today of $120.40 a decline of 18.5% from the highs.
Well if that proves anything, it proves the Arabs were right and Bush and Paulson were wrong.
It also shows the lie behind American government statistics. If the price is falling this quickly due to reduced demand in the US then it suggests that most statistics that show the economy on an even keel are lies and the true picture is born of the anecdotal information coming out that the economy is going to hell.
The real worry is the banking system. People are waking up to the fact that a quirk in American law means loss making property investors can walk away from their mortguage debts and the banks have no recourse, unlike just about everywhere else where mortguage debts remain with the property investor. This means that people that can afford to pay their mortguages are walking away from their negative equity, simply because it makes no sense to keep paying the banks. This means that the whole financial system is much more fragile than has generally been admitted.
Just about the only reason that Wall Street has not melted down, is that America is in denial. Most Americans still think they are financing the booms around the World. The truth is that China, Japan and the Arabs are already paying for Bush's largess.
The other problem that is obvious is that adjusting Federal debt againt GDP is meaningless, because the nature of GDP has changed so rapidly. The wealth generating base of the US has shrunk so much. It should not be adjusted against the 80% which represents consumers borrrowing and squandering money, but against the core activities that generate wealth. These have nearly totally disappeared.
The bottom line is that if Corporate America survives this mess, much of it is going to foreign owned along with a great deal of primary real estate.