As oil prices came close to $140 a barrel this summer, many analysts predicted that oil would come close to $200.
Where did the oil go now? Oil is at $80 a barrel.
Instead of going up it is moving down thanks to another bubble along with commodities.
There were so many analysts predicting oil prices at $200, even Goldman Sachs who in fact predicted $200 a barrel now cuts its estimates to $70 a barrel.
When dollar was declining many investors start to buy commodities, especially oil which send prices higher.
Goldman was bullish on oil all the time predicting growth and in supply which pushed oil prices higher even though people were driving less.
Prices began to break in July when hedge funds and investment banks start to sell off positions in commodities which brought oil prices down due to credit problems.
Many investors look at oil prices in short term but thought that long term may bring oil prices higher, promoting investors to buy oil commodities.
We are not at the bottom of oil prices just yet.
If economy continues like this we should see oil at $50 a barrel.
But what is oil good for if you cannot buy a car these days, or even re-finance it.
This new problem of not getting a loan is starting to be a reality.
Credit crunch is a wake up call for anyone who was borrowing to enrich their lives with debt just to have desired things in their lives.
Many people lived beyond their means and now it is time to save for your future.
Many of us will be facing long term adjustments when it comes to managing money.
It will be harder to get credit cards, to have large balances, late fees will be raised.
When buying a home a large down payment would be required, more paperwork such as proof of taxes, pay stubs, all your investments, 401K's would have to be provided just to get you qualified for a loan.
We became custom to swipe that credit card and just charge it, but lenders aggressively marketed credit cards, mortgages, auto loans and other financial products so you can have a better life even though you have lots of debt.
Now it is clear for banks to understand that everything is risky and banks were willing to take that risk with borrowers, who did not repay their balances leaving bank scratching their heads how to get a cash to fund their daily operations.
However, the expansion of credit and heavily marketed credit allowed people to buy homes.
It allowed people to improve their credit scores even if they had bad credit.
Banks gave customers plenty of chances to fix their credit situations by offering credit cards for bad credit in hopes that customer will use that card wisely.
Many of those customers maxed out all their cards.
Americans rely on credit and debt.
Debt hit an all-time high in the second half of last year, topping 14 percent.
If you add mortgages and car loans as of right now it is even higher.
In 1970 Americans saved 10% of their income, now many families spend virtually all of their incomes covering living expenses, and even that is not enough.
In this are you are not saving money, you are breaking even every month.
The new are of credit is here as everyone will be forced to adjust to tougher rules and limits.
But there has been a sign in recent days when shopping stores from Macy's to Walgreen's reported slow sales.
Consumers start to understand that you need to save in other to have a good life for yourself and your children.
New credit will force families to cut their spending and stop borrowing against their paycheck each month.
Once crises improve, so will credit become more widely used again.
But consumer will be cautions this time as no one wants to get into credit debt over again.
When inflation soared in the early '80s, banks aggressively marketed credit cards to struggling consumers as a good deal.
The interest rates were high, but not as high as inflation.
When Congress eliminated income tax deductions for interest on credit cards, banks pushed home equity loans, encouraging people to take money out of their homes to pay off the credit cards.
Lenders on the other hand created new programs from 20 year loan were repacked as 30 year loans and lenders added car loan of 3 years to 7 years, simply to extend debt.
Over the years consumers were financing their spending by borrowing.
Where did the oil go now? Oil is at $80 a barrel.
Instead of going up it is moving down thanks to another bubble along with commodities.
There were so many analysts predicting oil prices at $200, even Goldman Sachs who in fact predicted $200 a barrel now cuts its estimates to $70 a barrel.
When dollar was declining many investors start to buy commodities, especially oil which send prices higher.
Goldman was bullish on oil all the time predicting growth and in supply which pushed oil prices higher even though people were driving less.
Prices began to break in July when hedge funds and investment banks start to sell off positions in commodities which brought oil prices down due to credit problems.
Many investors look at oil prices in short term but thought that long term may bring oil prices higher, promoting investors to buy oil commodities.
We are not at the bottom of oil prices just yet.
If economy continues like this we should see oil at $50 a barrel.
But what is oil good for if you cannot buy a car these days, or even re-finance it.
This new problem of not getting a loan is starting to be a reality.
Credit crunch is a wake up call for anyone who was borrowing to enrich their lives with debt just to have desired things in their lives.
Many people lived beyond their means and now it is time to save for your future.
Many of us will be facing long term adjustments when it comes to managing money.
It will be harder to get credit cards, to have large balances, late fees will be raised.
When buying a home a large down payment would be required, more paperwork such as proof of taxes, pay stubs, all your investments, 401K's would have to be provided just to get you qualified for a loan.
We became custom to swipe that credit card and just charge it, but lenders aggressively marketed credit cards, mortgages, auto loans and other financial products so you can have a better life even though you have lots of debt.
Now it is clear for banks to understand that everything is risky and banks were willing to take that risk with borrowers, who did not repay their balances leaving bank scratching their heads how to get a cash to fund their daily operations.
However, the expansion of credit and heavily marketed credit allowed people to buy homes.
It allowed people to improve their credit scores even if they had bad credit.
Banks gave customers plenty of chances to fix their credit situations by offering credit cards for bad credit in hopes that customer will use that card wisely.
Many of those customers maxed out all their cards.
Americans rely on credit and debt.
Debt hit an all-time high in the second half of last year, topping 14 percent.
If you add mortgages and car loans as of right now it is even higher.
In 1970 Americans saved 10% of their income, now many families spend virtually all of their incomes covering living expenses, and even that is not enough.
In this are you are not saving money, you are breaking even every month.
The new are of credit is here as everyone will be forced to adjust to tougher rules and limits.
But there has been a sign in recent days when shopping stores from Macy's to Walgreen's reported slow sales.
Consumers start to understand that you need to save in other to have a good life for yourself and your children.
New credit will force families to cut their spending and stop borrowing against their paycheck each month.
Once crises improve, so will credit become more widely used again.
But consumer will be cautions this time as no one wants to get into credit debt over again.
When inflation soared in the early '80s, banks aggressively marketed credit cards to struggling consumers as a good deal.
The interest rates were high, but not as high as inflation.
When Congress eliminated income tax deductions for interest on credit cards, banks pushed home equity loans, encouraging people to take money out of their homes to pay off the credit cards.
Lenders on the other hand created new programs from 20 year loan were repacked as 30 year loans and lenders added car loan of 3 years to 7 years, simply to extend debt.
Over the years consumers were financing their spending by borrowing.
Source...