Will the stock market hold...or is the bubble ready to burst?

[Kirkland Laing]

Yup, the effects of high oil price is starting to show their ugly faces little by little. As I've said, something's gotta give - either the oil price or debt crisis eases or the stock market goes, though that doesn't necessarily mean it'll end up in a depression, but definitely a recession at the least...

...go slow on the ol' man though, he ain't got much time left anyway, I mean in the office.

The debt crisis is going to get a lot worse. It's going to get worse as long as house prices keep falling. We haven't seen the start of the bank failures yet, then there's all the investment banks which have bs accounting and are all in trouble. If it gets as bad as it could and the Fed bails everybody out as they almost certainly will, the amount of money they'll have to print to do it will see oil hit $250-300.

And that's just if the credit crunch doesn't extend past the current markets it's affecting. It's already making its way into regular prime debt, personal debt, you name it. Bond insurers are shitting themselves. The stock market tanking may not even be the worst problem we have to face. The credit swaps market is four times bigger in dollar value than the stock market and is built along the same principles as the CDOs and other credit implements that caused the subprime meltdown. If the contagion hits the swaps market, hang on to your hat.

What'll probably happen is that to save impending disaster the Fed and the world's central banks just bail everybody out, but the amount of money they'll need to print to do this will inflate prices to god knows where. That's probably the best-case scenario right now.

[pacfan]

What the heck was that, Kirk, that looked more like an end of the world scenario - an apocalypses! - than an economic crisis. Relax, buddy, here's a good news to cheer you up a bit.

BP chairman rejects "apocalyptic" talk of $250 oil - Yahoo! News

[Kirkland Laing]

What the heck was that, Kirk, that looked more like an end of the world scenario - an apocalypses! - than an economic crisis. Relax, buddy, here's a good news to cheer you up a bit.

BP chairman rejects "apocalyptic" talk of $250 oil - Yahoo! News

I'm not, I'm just talking about a bit of a meltdown in the financial system. I do also point out that however bad it gets all losses will have to be bailed out by the world's central banks, so it won't end in total disaster. There will however be a great deal of inflation which is what the Gazprom people are anticipating and what the BP guy is avoiding. The price of oil isn't being governed by how much is in the ground but by how many dollars the Fed is printing. More financial trouble, more dollars printed, higher oil prices/inflation.