[FairMaiden]

Does anyone else think that it is very convienent that the housing bubble popped just in time to relieve the pressure of peak oil? I've been watching the global stage for 20 years now and it always seems as though coincedence is working overtime. Just as many here had predicted a strain on the supply of oil that would show some Peak Oil growth (or limitation) pains, we get a deep recession (or depression depending on your definitions) to cut demand.

"OECD countries are expected to experience a decline in oil demand which is likely to pull total world oil demand growth down by more than 0.5 mb/d in 2009, representing a revision of 0.2 mb/d."

From OPEC's Monthly Oil Report http://www.opec.org/home/Monthly%20Oil%20Market%20Reports/2008/pdf/MR112008.pdf

[Plantagenet]

Does anyone else think that it is very convienent that the housing bubble popped just in time to relieve the pressure of peak oil?

The tight oil market and high oil prices crashed the economy and popped the housing bubble.

[alokin]

This question is asked over and over. Simply since 9/11 most of us have lost all faith in politics and governments. We've seen the true face now.
Yes I think this might be possible. the housing bubble did certainly not burst because of high oil prices it was simply due to burst, but it might have been helped.
As a nation or as an individual you get broke one day or the other if you add always to your depth without thinking of repayment.

[mos6507]

[Prince]

Does anyone else think that it is very convienent that the housing bubble popped just in time to relieve the pressure of peak oil? I've been watching the global stage for 20 years now and it always seems as though coincedence is working overtime. Just as many here had predicted a strain on the supply of oil that would show some Peak Oil growth (or limitation) pains, we get a deep recession (or depression depending on your definitions) to cut demand.

No coincidence at all. The housing bubble was bound to burst, regardless if oil was at 10 cents or $1000 a barrel. While some here often argue that the economic downturn was due to high oil prices, I digress. I believe high energy prices acted as a catalyst for the economic crisis and impending housing collapse, but in no way was it a primary cause. Even if oil was dirt cheap, it wouldn't have changed the fact that people were "buying" homes that were 10-20 times their annual income with little or no money down. It didn't account for the rapid, absurd, illogical, and unsustainable increase in housing prices in areas such as Las Vegas, Miami, or Phoenix.

Construction was booming and we had faux economic growth, which certainly increased our demand for oil, but I have yet to see any strong evidence that suggests we wouldn't be in a similar mess right now even if oil had never breached $30/bbl in the last 5 years.

[dunewalker]

Some might argue that an entity such as Goldman Sachs was responsible both for the speculative run-up of oil prices AND the collapse of the same, knowing full well how precarious was the overall economy. Remember, it was GS that predicted a super spike ahead of the entire fiasco. Who has profited immensely from the bail-outs? Goldman Sachs. Who engineered the original bailout and blackmailed congress into approving it? Henry Paulson, former CEO of Goldman Sachs...

[jdmartin]

Does anyone else think that it is very convienent that the housing bubble popped just in time to relieve the pressure of peak oil? I've been watching the global stage for 20 years now and it always seems as though coincedence is working overtime. Just as many here had predicted a strain on the supply of oil that would show some Peak Oil growth (or limitation) pains, we get a deep recession (or depression depending on your definitions) to cut demand.

No coincidence at all. The housing bubble was bound to burst, regardless if oil was at 10 cents or $1000 a barrel. While some here often argue that the economic downturn was due to high oil prices, I digress. I believe high energy prices acted as a catalyst for the economic crisis and impending housing collapse, but in no way was it a primary cause. Even if oil was dirt cheap, it wouldn't have changed the fact that people were "buying" homes that were 10-20 times their annual income with little or no money down. It didn't account for the rapid, absurd, illogical, and unsustainable increase in housing prices in areas such as Las Vegas, Miami, or Phoenix.

Construction was booming and we had faux economic growth, which certainly increased our demand for oil, but I have yet to see any strong evidence that suggests we wouldn't be in a similar mess right now even if oil had never breached $30/bbl in the last 5 years.

I agree - I think high oil (gasoline) prices was just the last push over the cliff. It was the final nail that made commuting 75 miles each way into the city an impossible financial situation.

[odegaard]

If it makes you feel any better I do NOT believe oil prices crashed the housing bubble.
The only difference cheap oil would of done was increase Americans disposable income a little so that would extend the bubble for an extra year or maybe not at all.
However EVERY bubble whether it's Tulip flowers or Real estate falls over for the same reason ---> because they ran out of stupid people.

[Grautr]

Does anyone else think that it is very convienent that the housing bubble popped just in time to relieve the pressure of peak oil?

The tight oil market and high oil prices crashed the economy and popped the housing bubble.

Yes but was the housing bubble allowed to happen to alieviate the previous dot.com bubble as most economists think or was it because the US Government were aware peak oil would be a problem and knew a new depression would reduce oil demand?

[jdmartin]

Does anyone else think that it is very convienent that the housing bubble popped just in time to relieve the pressure of peak oil?

The tight oil market and high oil prices crashed the economy and popped the housing bubble.

Yes but was the housing bubble allowed to happen to alieviate the previous dot.com bubble as most economists think or was it because the US Government were aware peak oil would be a problem and knew a new depression would reduce oil demand?

IMO the housing bubble was created purposely to give the (American) public the illusion that there were still plenty of jobs out there, after outsourcing most of our manufacturing and other easily transportable white-collar work to low-wage countries. When we started allowing manufacturing to leave the country, it was claimed we were going to be a "technology economy", or a "service economy", none of which panned out, so they created a "housing economy".

[Kristen]

Capitalism is the cause of everything, with greed at its root. Also we have a problem with complacency.

[odegaard]

Capitalism is the cause of everything, with greed at its root. Also we have a problem with complacency.

There will always be greedy people in search of a quick buck at another man's expense.

You make it sound like if we invented some new economic system greedy people will go away.

They won't.

[Mike Morin]

I think that what we are seeing is not just the bursting of the housing bubble, but the bursting of the entire supply-side economics paradigm, by a couple of generations of Capitalists who thought that they were infallible, in good part because of their "victories" in WW2 and the Cold War and were riding a wave of ASSUMED success.

The presumption of success had momentum and affected the business culture to the point that credit and equity flowed freely and foolishly.

Now, reality is setting in. Over-supply side economics cutting its own throat by paying no attention to how their worldwide dominance of financing low wage Capitalism, a race to the bottom for the working class, was undermining effective demand for their over-supply of low quality, of marginal utility junk. The over-extension of credit "helped" for awhile, at least until all the overly materialistic fools had filled their over-priced luxury and common-place homes with a plethora of unnecessary toys, including those gas gluttonous opulent ostentations in their driveways. Then the bills came due and the over-supply economy was so over-supplied and credit so maxed out that it ceased to be able to grease the wheel of the assumed insatiable wants economy.

The price of gasoline and other fossil fuel products contributed in helping to weaken effective demand for what would have to be seen as an impossible continuation of mindless commerce.

In order to sustain wealth, people have to produce items of value. Other than the computer industry, it's all been speculation, more speculation, more speculation, more speculation, fueled by greed and accelerated by foolish arrogance.


Mike Morin

[FairMaiden]

Hmm...I wasn't posting that bc I thought there was a conspiracy theory. Though I do like the one presented here. No. What I was getting at was the fact that everyone here assumes the US gov't is completely stupid and inept. Perhaps they popped the bubble on purpuse to relieve the pressure on demand. I guess now reading the replies that I do agree it was definitley going to happen sooner or later. It could have happened sooner with the regulations Gov Spencer was trying to pass before he was black balled. There are alot of other things that could have made it happen. I always like to look at why now? what makes now better than earlier or later? People here know a lot more about this stuff than I do...but I do have an intense intuitive ability that surprises even me sometimes

[patience]

Mike Morin,

Great analysis! +1

There are all sorts of crooked things going on, and always have been, but not the really grand conspiracies that so many like to dwell on. No, I'm convinced that our problems are congenital stupidity of the masses and those who purport to lead them.

I lived through most of the period you so clearly and concisely described. Through it all, the conspiracy buffs had a field day trying to blame somebody else for their own problems. Yeah, the Federal Reserve is a blight on humankind, and the clout of the biggest fortunes has indeed buggered the poor. It has always been so.

Presently, those major fortunes are having problems of their own creation, IMHO. I wouldn't mind if the troubles were confined to them, but "When elephants fight, the grass gets trampled".

[MD]

If it makes you feel any better I do NOT believe oil prices crashed the housing bubble.
The only difference cheap oil would of done was increase Americans disposable income a little so that would extend the bubble for an extra year or maybe not at all.
However EVERY bubble whether it's Tulip flowers or Real estate falls over for the same reason ---> because they ran out of stupid people.

Wait...wait...let me get this...

oil prices didn't pop the housing bubble...but if oil prices had remained low the bubble wouldn't have burst...

ok...

[odegaard]

...
Wait...wait...let me get this...

oil prices didn't pop the housing bubble...but if oil prices had remained low the bubble wouldn't have burst...

ok...

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