alphadominance

Oil: What Goes Down Must Go Up?

The $150/barrel oil never had anything to do with supply and demand. It was part of a speculative commodities bubble that blew up as a result of cheap credit and vastly overleveraged investment groups like hedge funds. We are experiencing a correction in all asset prices that was overdue. While I agree that it has unfortunate impacts in driving investment in alternatives, hopefully we were shaken enough by it as a country to keep the political will together to pursue alternatives now while the pressure is not so great. It would be a tragedy for us to again become complacent only to be blindsided when supply constraint becomes a real issue. This is a wake up call and we will probably one get one. Heed it people.