The Oil bubble is getting bigger, will it burst soon?

The current Oil prices seem intent on reaching new heights and with the latest announcement from the US energy secretary that the low production is the only cause behind the sudden increase in Oil prices, the ball has been knocked back onto Saudi Arabia's court.

With almost every single country reeling from high oil prices and the accompanying inflationary pressures, a conference of sorts is currently underway in Saudi Arabia, between the Oil suppliers and the Oil consuming nations. The steep hike has set ramapant inflation loose with many of the countries registering double digit inflation figures. China has already been on the brink of the 'double digit' inflation quite a while before the Oil crisis started. This was on account of its economy and with the current oil rates, the inflation is bound to shoot up like anything.

Samuel Bodman's comments prior to the conference suggests that the rest of the world has but lost their patience with Saudi Arabia as well as the rest of OPEC dragging their feet on this issue. One of the key goals of this conference would be to make Saudi Arabia see reason and not cry fowl. All the eyes are on the conference and one can but hope that the Oil bubble will burst soon rather than later, for the resultant mess would be easy to cope with.

World finance leaders vow to tackle bank reforms!

The credit crunch as well as the mortgage crisis seems to be pushing the U.S economy on to the fast track towards recession and this is having effects on all the global markets. As it is, most of the major economies are facing the heat as a result of the credit crisis and the world consumer confidende has dipped rather low of late. Some of the major powers like China nd India are facing inflation in high figures and are busy seeking ways to contain the surging economy as well as the rampant inflation. At a recent IMF meeting, the mention of the sale of gold to the tune of $11 Billon by the IMF to shore up funds has highlighted the problem and made it amply clear that no one is immune to the current crisis, it is truly a global one onb almost all the aspects.
Recetnly some of the world financial leaders
met up to discuss the current situation and it was then decided that some of the financial regulations needs to be tightened up a bit so as to enable the world economy to handle the current crisis better. To some this may seem like closing the barn doors after the horses have bloted but the fact of the matter is that the current situation can get a whole lot worse and very quickly at that. In order to prevent that from happenkng as well as to be able to take a firm grip on the situation at hand, the world financil leaders have made the right decision by agreeing to regulate further and to revamp certain financial regulations. This certainly beats sitting in a corner and moping!

Industry goes flat as the U.S economy tries to ride out the blizzard!

The industrial output for the month of December remained flat in spite of the best efforts of the Fed to cajole the economy to start running again. It seems that people no loner want to purchase with the same fervor as they used to before. And on top of this, we get reports that the inflation is at its highest in the last 17 years. That is not really a surprise, with the energy prices shooting up to the roof, it was only a matter of time before the food and other essential items started soaring up.
One of the things about the energy prices was that every time it went up so did the essential commodities. Anyway, with the economy trying to ride out the blizzard that seems to be blowing, the last thing that they needed was another bit if bad news. It seems that is just about the only thing that we are getting these days!

Wall street in a muddle over the economy!

The Wall street seems to be heading to a muddle over the anticipation of how the U.S economy fares next week. The investor reports as well as the housing data are to be released soon and it could go either way. Goldman sachs had reported profits in the last quarter and they are expected to do the same as their Q4 reports are due soon.

But as far as the markets go, and with all indications that the inflation is due to go up and in only one direction, the mood is all about 'a half glass that is all too empty'. The Fed cannot do much as with any inflation rise, their hands get tied down , so any negative data especially in the Housing data is bound to send the markets into another free fall.

Citigroup chief economist Lewis Alexander said he believes the housing market will remain weak well into 2008, but that it is more likely that the economy will keep growing than head into recession. I have to agree with that outlook but I also have to say that saying that the economy will keep on growing in spite of the housing market seems to be hiding ones head all too deeply in the sand. Maybe it is high time that the price ranges were regulated in the housing market but any such controls will only have negative implications for the U.S economy and the U.S dollar.
There is no easy solution to the current mess and this is one ride that we all will have to ride whether we like it or not!

dow jones,economy,fed,housing,george bush,goldman sachs