In the midst of the usual plethora of financial reporting, the causal reader would be hard pressed to decide if it’s the beginning of the end or the end of the beginning of the financial crisis.
Everyone agrees that we’re in a crisis. Officials and politicians point everywhere and say – Hey look! Green shoots! The worst is over. Others urge us to ignore the green shoots, the worst is yet to come.
I’ll stick to something I know a little about. Oil. I have said repeatedly that we won’t be in recovery until oil is in the $70-$90 US$/bbl range for some time. Well, it has been in the range, only just, for some time now. The $70 – 90 range is the cost of bringing new oil online, as opposed to the cheap and easy oil we still get from our declining elephant fields.
My question is whether our hovering in the $70/bbl range is a sign that the global economy is coming through the crisis, a sign that we’re being forced to drill new oil because of cheap oil’s decline, or is it the result of a false optimism in the markets, driven by the US printing printing money/debt like there is no tomorrow.
I’m beginning to think it’s a bit of all three.
Meanwhile, our mortgage crisis deepens. When will the awkward bubble in high debt dairy burst?
What do you think?
Green shoots or growing rot?