I know that I’ve been boring as hell with my obsession with financial bubbles, but it’s not only interesting, it’s important. Again, a financial bubble is when some Market takes off like a rocket and prices soar. The situation is accompanied by all kinds of rationalizations about why. "The Internet is the wave of the future." "People want to own their own homes." "People are wanting to move back intown." "People want to get out of town." "We’re running out of oil." In retrospect, these arguments look absurd. They don’t explain why the price is rising so fast. The truth is that "bubbles burst." Suddenly the price plummets because price has outrun value, and the spike disappears. People who get out of that Market before the burst make a killing. People who hold on past the burst get killed.
While it is the Speculators that drive a bubble’s ascendency, it’s unfair to say that they necessarily cause it. Maybe they just jumped on board. But there’s one place where it was "caused" "on purpose" that is for sure. Enron actively caused a bubble in energy on the West Coast. How they did it is complicated and involves sneaking deregulation [Phil Gramm] of their Market through Congress. But after Enron’s collapse, their shadow may well have continued to fall on the energy Market – specifically oil. This 60 Minute segment looks at the recent "Oil Bubble" and how it came to be:
Sorry about the commercial
This 60 Minutes is a must watch!
I believe everyone involved in this speculation crap should be in jail. I feel like they’ve been stealing & lying to me and all americans. the gov. had better do something about this ! or the American people will!
I thought Frank Rich was on fire but take a look at the great reporter Helen Thomas’s piece on Bush’s last press conference and her blaze beats Rich and Dowd.