December 6, 2008: Oil: $25 Is The New $200 – Train wreck

  Remember last July? A shy Goldman analyst predicted that oil was going to $200 and immediately became the next Meredith Whitney. The mine’s-bigger-than-yours game drove other targets to $500. T. Boone Pickens announced plans to become a wind mogul. Detroit announced a permanent "new era" and pulled the plug on its guzzlers. Peak oil became "a fact."  How was it possible that, once again, so many smart people had been so stupid?

  Six months later, oil has crashed back into the low $40s. And now Merrill’s analyst is predicting that it could go to $25:

  FT: Francisco Blanch, head of commodities research at Merrill Lynch, said his main scenario was for oil prices to average $50 a barrel next year, but warned: “A temporary drop below $25 is possible if the global recession extends to China.”…

Yes, yes, we know: When the economy comes back, oil is shooting right back to $100+. Everyone agrees on that, so it’s obviously true.

Meanwhile, how are things in the Middle East about now? Are folks still building indoor ski mountains in the desert?  What about that rotating skyscraper?

http://clusterstock.alleyinsider.com/2008/12/oil-25-is-the-new-200

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  Ahh yes, the Bush administration has brought about the biggest train wreck of my lifetime.  The worst is yet to come.  Cheap oil is not a good sign.  It is a reflection of everything that is wrong with the economy.  The cheaper oil goes the worse the economy is.  Yes, it might be nice to see gas below $1.50, but it isn’t a good sign.

  The train wreck continues and will continue for some time to come – thanks to the inability of our government to find real solutions to a problem they have helped create.  Latest unemployment numbers are WRONG and basically a lie.  They have revised the Aug/Sept numbers and anyone who thinks the current numbers are correct is smoking something.  They are much higher – the government will "revise" them later.  No need to panic people at this point. 

  Thanks a lot President Bush – your ignorance never fails to impress me.