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Friday, 24 October 2008 02:00

It's every nation for themselves, now

First the US bankers threw as much garbage at the world as they could lift, with the US ratings agencies throwing perfume on the trash mid-flight to manage the "stank". Then the Irish guaranteed their bank deposits to an unheard of limit, basically giving the middle finger to the other European banking authorities (you see, money flowed to the "perceived safety of government backed bank funds from an already weakened UK and EU banking system), and now OPEC is cutting product in an effort to elevate oil prices amid a guaranteed global recession. Another "eff you" to the world.

Most people don't realize that in the grand scheme of things, oil has not really went down in price. It is exactly where it was in the summer of 2007 when I first contemplated the contracts. The OPEC nations have went on a "subprime like" debt driven spending binge, and need the petrodollars to keep flowing to support the facade that they are trying to build.

This is why HSBC is going to drop, the same general theory behind the fall of the US municipalities, and China/Korea. The debt in Dubai alone is crushing as they simultanesouly tried to create the new Wall Street, a tourist destinatiuon complete with a mega yacht deep water marina, a commercial and residential real estate hub, all from a dry patch of desert - from scratch in just a few years with practically no internal consumption at all relative to the more developed countries with major financial hubs. The other OPEC nations are not that far behind. You see, my friend, we are all subprime now.

The Organization of Petroleum Exporting Countries decided to make a deep cut in oil production, taking 1.5 million barrels a day off global markets as it embarks on the task of managing prices amid a potential global recession.

December light, sweet crude oil futures fell $3.34 to $64.50 a barrel in electronic trading on the New York Mercantile Exchange by midday in London.

FOR MORE INFORMATION, please see: http://online.wsj.com/article/SB122484057300166131.html?mod=djemalertNEWS

Last modified on Friday, 24 October 2008 02:00

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