I have had an insight brewing now for about 7 years. I want to share it.

[I posses an MBA from the most reputable finance department in the world (Midwest institution; windy city).]

This is the insight:

The behavior of the oil group specifically within the power base facilitated by the Presidency has performed the most historic heist of all times.

There cannot be one intellectual reading this little blog comment who can defend the price of crude oil from $147 a barrel to $33 in less than 5 months this year. From a free market point of view – truly impossible. Supply and demand cannot produce this variance. Yet all of us cannot "see" or have the courage to voice our conscious to its origin.

The non-market price of oil commencing a month before George W. Bush took office and peaking earlier this year was common market manipulation. This manipulation has created some profound distortions in our market (mis-information).

Understand this about finance: it quantifies, it does not create. The finance market has been operationally cut off due to the rise of oil. The IPO market shut down basically 7 years ago. There was a void that was hard to see. Wall Street possesses the greatest concentration of capitalists in the world. This was created through natural forces over long periods of time. Without real IPO and M&A activity on a typically robust scale the expectational power of investors forced American finance firms foolishly into real estate. Do not discount to much the quality of Lehman Bros.. They were created around the Civil war and survived the Great Depression.

The amount of stealing the oil businessmen has schemed is profound (on same theme as Enron [energy traders] just much larger and with the use of force). Add to it the Federal Government's consumption of tax dollars due to enhanced military activities (there is a correlation there as well; simply the value of Iraq's oil reserves and our occupation). This to me has been a plan that the finance industry has been a victim of. The frauds of Madoff and such must be criminally prosecuted and are a positive outcome of this heist – "When the tide goes down we will see who has there boxers on", but we must not loose the forest for the trees.

Ralph Waldo Emerson penned an essay called "Compensation". This little essay is towering. It it truly on par with Adam Smith's "Wealth of Nations" and Milton Friedman's "Capitalism and Freedom". This essay is a must read for our very confused society. His words are clear and are true utterances of genius.

Roughly stated from the literature "When a country behaves like inmates of a prison there currency will reflect that reality." Our currency has been sending signals of felony misbehavior within our society to the American citizen since the onset to this heist.

Remove the lowering of the interest rate over the past three years and all things being equal – research the relationship between the increase in oil prices and the fall of the dollar. And any intellectual who thinks that oil follows the dollar is naive or worse. The dollar represents, it does not create or scheme.

We have serious felonious behavior far above our finance industry and is being coveted by our most esteemed institution; the White House. This should not be to surprising but must be criminally prosecuted. The lesson for us all in this historic past seven years is the profound value vested in a free market by the force of justice.

May we all lean more towards our character (moral strength) and find the courage to stop these madmen from allowing this to be hidden away for another generation to endure and clean-up. This is another chapter in our maturation of our democracy.

Last week the wife and I reviewed our home buying in Calif going back to our first house in 1976, a new 3bed 1 bath 1100sq ft purchased for $27500. Which was about 2X my income then. That same house in 2005 per zillow was 600K (all the same) and now 450K in 2008. Could say the same for auto cost pretty much as well but housing prices really tell the story and my guess is that we are headed way way way back to a trend line in housing cost that will cause considerable damage to our banking system and there isn’t shit that anybody can do about it.

http://www.nytimes.com/2008/12/21/business/21admin.html?_r=1&hp=&pagewanted=all

http://business.theglobeandmail.com/servlet/story/RTGAM.20081219.wcover20/BNStory/Business/home

I was also wondering if anyone knows anything about the whole Parmalat mess and the involvement of BoA?

thanks Yves, really a must-read.
Just one point: "Inflation, by contrast, is hard to worry about in the short term, not least because the Fed’s expansion of the monetary base is leading to no commensurate expansion of the broad money supply; the banks would rather shrink than expand their balance sheets."
1. What exactly does he mean by this general term "inflation"? For a start, it would be helpful if economists would finally agree on what they are talking about when they say or write "inflation": monetary aggregates (which one?), CPI, real cost of living, asset markets or whatever?
2. And if the Fed walks and quacks like a commercial&investment bank and its balance sheets looks like one, it should maybe be counted like one in the aggregates.