Inthemiddle
Rookie
- Oct 4, 2011
- 6,354
- 675
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- Banned
- #21
The price of oil dropped because when investors realized the housing bubble was over, they rushed into commodities, creating a commodities bubble. And then that, too, popped. Regardless of the derivatives bubble crash, the commodities bubble was going to pop even in a boom economy.
Have anything to support this hypothesis?
The fall of crude from $140 to $30 in an 8 month span should give you a hint.
What kind of asinine reasoning is that? Your claim is that the housing crash caused the drop in oil prices, and your evidence to support that is to point out that oil prices dropped?
C'mon, let's be realistic. You have nothing to support your hypothesis that the crash of the housing market caused any kind of commodities rush. Don't get me wrong, it could be an interesting hypothesis, but it's purely speculative. Unfortunately, it also fails Occam's Razor, creating unnecessary complexity. The drop in oil prices was due to OPEC efforts to push oil prices higher at a time when the economy was already going down surreptitiously. As the effects of the bad economy became realized and felt more pronouncedly people's oil consumption usage dropped while oil prices were still on the rise. This, in turn triggered a sudden spike in supply, which drove oil prices down to a point where they would restablize with demand.