Will It Never End*

I wrote a post a while back about the economic mechanisms that have caused oil prices to fall so precipitously. Even after writing that post I wondered if those mechanisms could account for the magnitude of the decline. Now I realize they didn’t. In fact, some of the market forces I described should have brought prices down much sooner than they did. So what happened? It turns out that many of the speculators who worked for Enron were hired by investment banks to continue their activities. When the bubble they created burst, oil prices dropped seventy percent. I’m beginning to wonder if there is any aspect of our economy the investment banks didn’t significantly impact…and that’s being polite. See related post It's Marginal.