Stupid bet

Over a wine sodden lunch, I bet my father in law that the price of oil wasn't going to go up to 300 dollars like he insisted it was going to by the end of next year. Never gamble, as I've said before - if you lose, you get pissed off, if you wing well you wish you'd bet more. Anyway, I thought I was in with a chance with this bet. At the time I told him, for two bottles of champagne, this is a sure thing because the US and the world economy is going into a recession and that means a drop in the demand for fuel.

Alas, Whitney makes the apposite point that, "Indeed, the $700 billion is just part of a massive "pump and dump" scheme engineered with the tacit approval of the US Treasury and the Federal Reserve. Once the banksters have offloaded their fraudulent securities and crappy paper on Uncle Sam, they will do whatever they need to do pad the bottom line and drive their stocks up. That means they will shovel capital into hard assets, foreign currencies, gold, interest rate swaps, carry trade swindles, and Swiss bank accounts. The notion that they will recapitalize so they can provide loans to US consumers and businesses in a slumping economy is a pipedream. The US is headed into its worst recession in 60 years. The housing market is crashing, securitzation is kaput, and the broader economy is drifting towards the reef. The banks are not going to waste their time trying to revive a moribund US market where consumers and businesses are already tapped out. No way; it's on to greener pastures. They'll move their capital wherever they think they can maximize their profits. In fact, a sizable portion of the $700 billion will likely be invested in commodities, which means that we'll see another round of hyperbolic speculation in food and energy futures pushing food and fuel prices back into the stratosphere. Ironically, the taxpayers largess will be used against him, making a bad situation even worse."

The hard bit to take of this is that last line,

Ironically, the taxpayers largess will be used against him, making a bad situation even worse.

In a small way, me as well. I'm going to have to shell out some dwindling sovs on (cheap!)champagne. . .