Three Items to Look for that will Stage a Crude Recovery

One of the questions that I have been asked a lot lately is; why is oil so cheap today, when only a few months ago it was ridiculously expensive?  Part of the answer has been provided in the question, it was ridiculously expensive, and despite what every ‘analyst’ on CNBC said; there was no fundamental reason for oil to be $147/bbl.  The fundamentals probably stopped making any kind of sense around $75-$85/bbl, so the question is really why is oil 50% off that price?

 

Short Term Tail Wagging the Dog

 There has been a lot of talk lately about the velocity of money, and how it has slowed down dramatically leading to most of our current problems (the subprime crisis caused the decrease in velocity, the decrease in velocity caused the economic crisis).  The velocity of information, meanwhile, has been constantly increasing.