Was it really less than three years ago that President Bush took a nice romantic hand-holding walk with Crown Prince Abdullah to urge him to keep oil below $50 a barrel?
Yeah, that worked well.
Yesterday, a single oil contract on the New York Mercantile Exchange traded at $100.00 a barrel, and ten more traded at $99.90. That's within spittin' distance of the inflation-adjusted highest price ever of $102.81 a barrel, reached in April 1980. The Journal does a wonderful interactive grahic of this, with the green shading being the inflation-adjusted price. You can see the Journal's graphic here. Maybe Mr. Bush should have let the Prince get to second base.
I think we're in for a tough year or four. Not only are house prices dropping (and the real shitstorm of mortgage problems in the most bubblicious states still lie ahead of us), but plenty of people are eyeball-deep in car payments, too. This article in the L.A. Times called "New Cars That Are Fully-Loaded--With Debt" looks at this problem. Motor vehicles are the most expensive piece of depreciating consumer crap that most of us buy, and more and more people are getting underwater on these loans.
Part of the reason I haven't been blogging as much recently is the usual December Christmas crush and partly because I have spent a lot of time reading on what has been termed the Subprime Crisis but really is a broader credit crisis underlaid by financial institution solvency issues. What can I say, my degree's in Economics, my background is finance, and I like this stuff. If you want to follow along on this, I highly recommend the Calculated Risk blog. Note that this has nothing whatsoever to do with bicycles. If you'd rather hit yourself with a hammer than read about mortgage backed securities servicing agreements, Calculated Risk may not be the spot for you.