"This Beginning of Miracles"
The most likely truth or reality in a series of incidents that led to the Great Fall of Wall Street in September 2008 is as follows:
(1) Huge subprime loan debts and the resultant financial-transaction crisis led Wall Street to looking for other easy business for making another big money.
(2) So, Wall Street leveraged the upward trend of crude oil prices due to a sharp increase in demands for energy resources.
(3) However, against a drastic increase in crude oil prices, U.S. consumers started to refrain from buying new cars and other goods and services.
(4) When the total subprime loan defaults crossed over a certain level, Wall Street was forced to collect huge cashes and funds to compensate them, which weakened their position for boostinng crude oil prices in the WTI-indexed market.
(5) Global consumers came to be influenced by higher oil prices (and food prices) and financial stringency, leading to a drop in needs for crude oil and other commodities.
(6) Then, two major factors for supporting higher oil prices, consumer expenditures and available funds, came to lose driving force to bolster higher oil prices.
(7) Subsequently, the crude oil market plummeted. (Corn prices also collapsed.)
(8) Wall Street had no means and resort to prevent the chain of steep declines in the crude oil market, the money/credit market, the mortgage market, and the personal consumer market.
(9) Half a year later from September 2008, namely now, the U.S. Government is not simply talking about $1 trillion bail-out scheme, but it is prepared for implementing it with a help from the Congress.
Ok, let’s check an insightful figure a Japanese researcher presented on the Internet:
( http://www5.cao.go.jp/keizai3/2004/1219nk/pdf/04-1-2.pdf )
Note that the researcher found that when a crude oil price gets higher than 30 dollars per barrel (as of 2004 or so), the US personal consumer expenditures clearly start to decline.
And, two major contributors to an increase in global oil demands have been the U.S. and China. Among the 5.7% increase in 2004, the US accounted for 0.8% and China 1.7%.
*** *** *** ***
That is all for today.
But, the situation of economics is as follows:
----------------------------------------
Paul Krugman applies the term ‘boneheaded’ to Robert Barro’s discussion disputing the existence of a Keynesian multiplier and hence the ineffectiveness of government deficit spending. Barro responds that Krugman, a Nobel Prize winning economist, knows nothing about the effect of government fiscal policy.
http://www.examiner.com/x-1504-Economic-Policy-Examiner~y2009m2d11-Is-the-stimulus-the-worst-bill-since-the-1930s-Not-by-a-long-shot
----------------------------------------
I will continue to focus on this issue, at least, later.
But what about an audience flow of your presentation?
As for EEE Reporter, he only minds (in principle) one possible viewer of his blog: the future Pope expected to move to Jerusalem from Rome, if the God Lord Almighty so wishes.
(There is another kind of beauty in the Occident and the Orient, respectively. Un vilain petit canard est destine a devenir une prima donna, n'est-elle pas!?
http://www.fukuchan.ac/music/j-folk3/medakanokyodai.html )
Joh 2:11 This beginning of miracles did Jesus in Cana of Galilee, and manifested forth his glory; and his disciples believed on him.
Joh 2:12 After this he went down to Capernaum, he, and his mother, and his brethren, and his disciples: and they continued there not many days.
Joh 2:13 And the Jews' passover was at hand, and Jesus went up to Jerusalem.