Canadians from all walks of life are rightly worried about the economic health of the country in coming weeks and months. And as such, various suggestions are pouring in for Prime Minister Harper about what kind of budget should it be on Jan 27.
Meanwhile, to put to rest speculations about the likely deficit, yeah deficit there will be, official leaks to the media put the deficit figure at 64 billion over the next two years.
Now, let me weigh in on the directionality of the budget. Yeah, the budget should contain stimulus for growth of economy and so on, but my fundamental submission to PM Harper and Finance Minister Flaherty is: in as much as the Jan 27 budget will be geared towards creation of jobs, it must also focus on another critical aspect – towards prevention of job losses.
Reason is simple: if two new jobs are created but if at the same time two jobs are lost, the net result will be zero. Therefore, the budget must encompass steps that will help in job retention in sectors specific to provinces, like, farming, energy, fisheries, lumbar, etc. and for small and medium industries.
Just by focussing on one sector will be of little help. Let us say, auto sector is provided necessary succour and they continue to produce vehicles but if the people are not employed, if they don’t have the purchasing power to buy those vehicles, what good would have been achieved at the end of the day?
Therefore, in very concise terms: the budget and the government have to ensure that people who have jobs don’t lose them, and at the same time new jobs are also created. With creation of new jobs the currently unemployed will finds means to earn, consequently they will have disposable incomes which in turn will help in causing higher demand for goods and services. The usual economic multiplier will come in to play. This is what the economies in recession want to happen.
However, for the growth of demand it is absolutely necessary that there is adequate money supply in the market. At the moment liquidity is a problem as the banks are being too conservative regarding their lending policies. In other words, the Canadian Banks are opening the money supply valve slowly.
Bank of Canada reduced the overnight rate to 1.0% on Jan 20 thereby bringing cumulative easing to 350 basis points since Dec 2007. BoC is doing this to stimulate the credit market which is so very vital for sustainment and growth of durable and non-durable goods, and services.
But if you look at the interest rate table provided in Bank of Canada’s Monetary Policy Update of Jan 2009, you will find that the variable mortgage rate dropped till 17 July 2008 as the Prime Rate dropped. But all of a sudden on 23 Oct 2008 the variable mortgage rate went up even as the Prime Rate declined. Since then the banks have not passed on fully the benefit of overnight rate cuts to the consumers.
The consequence of this is evident, there is drop in sales of houses which in turn affected the demand, which led to less starts, which meant job losses and initiation of one of the many downward spirals strangulating Canadian economy.
Latest numbers (including December 2008 numbers) from the Bank of Canada indicate Canadian banks' residential mortgages stood at $452.5 billion, off by 0.7 per cent from November, extending a declining trend since July's peak as realtors reported sharp drops in home prices and sales volumes.
There is also news that some banks are quietly increasing interest rate on lines of credits too. When the market is crying out for more consumer demand, the banks are insidiously trying to dip in to the pockets of the consumers and snatch some more dollars!! It seems the banks are adopting a penny wise pound foolish policy.
Obviously this is a desperate but a stupid way to improve their revenue and the balance sheets which got screwed up because the banks were putting their funds blindly like gargantuan idiots in the disastrous mortgage lending frenzy initiated by Freddie Mac and Fanny May. These banks didn’t even bother to check whether the bubble they were putting the money in to was the right thing to do or not.
So, the important question is: why are banks not passing on the full benefit of cuts being effected by BoC in overnight rates? The variable mortgage today stands at 3.8% whereas it could have been easily anywhere around 1%+0.8=1.8%. Why the hell are banks not giving the benefit to the potential customers?!!
As per Bank of Canada’s Monetary Policy Update of Jan 2009, Canada is in recession, and its real GDP is 2009 is expected to contract by 1.2% (An aside: ‘decline’ is the word used in BoC’s document which is confusing, it is poor English; decline connotes a decrease relative to something – e.g. there can be a decline of 1.2% from, say, a previous figure of 3.5%).
BoC projects that Canada’s GDP will rebound in 2010. But how the hell can it rebound when the banks are making things difficult for people? Why can’t the BoC kick on the posterior of these banks and ask them to help in a ‘real’ and ‘effective’ manner in bringing the Canadian economy back on the rails?
It is pretty darn clear that simply resorting to deficit budgets is not going to suffice unless it is backed to the hilt by the banks that showed utter callousness and incompetence which resulted in their funds getting entangled in toxic assets (consequently the banks had to resort to massive write-offs).
PM Harper and Finance Minister Flaherty have to do whatever it takes to get the Canadian banks to fall in line with BoC’s measures. If that requires adopting extraordinary measures, cracking the whip, so be it – whether through any ordinance or whatever it is. When President Obama can go to extraordinary lengths, why can’t Canada, which, fortunately, is not in such a deeper hole as US is? It is time Canadian leadership showed that it is not made up of sissies!!
Showing posts with label economic recession. Show all posts
Showing posts with label economic recession. Show all posts
Saturday, January 24, 2009
Saturday, January 10, 2009
HOW CANADA CAN TURN THE CURRENT CHALLENGES IN TO OPPORTUNITIES!!
Canadians, potential investors (and probably to some extent its southern neighbour) are waiting with bated breath to see what happens in Ottawa on Jan 29 when the budget will be put to vote. The current Prime Minister Stephen Harper, of Progressive Conservatives (PC), is leading a minority government. If for whatever reasons the main opposition parties - Liberal, NDP and Bloc Quebecois - don't like the budget presented on Jan 27, they can pull the government down by voting against it.
Now, let us step sideways and look at some key aspects currently confronting Canada. First, Canada is also in the grip of recession as are the other G-7 countries; the good news, however, is that Canada's economic woes are least as compared to any other G-7 country. Albeit, Canada's economic problems are less compared to its G-7 peers but they are not trivial either.
The unemployment figures released on 9th Jan paint a grim picture, and coupled with current contractionary tendencies of the economy (exacerbated by recessionary perception in the minds of the Canadians) the future doesn't portend encouraging signs.
When a country passes through tough times, if you had to pick up one thing that is needed to pull the country out of trouble what would you choose? Without doubt, the answer would be: 'real' leadership. It is a well known fact, to even non-academicians, that right leadership is fundamental to devising necessary strategy/suite of actions, convincing the people of the country to embrace the same and implementing it in timely and proper manner.
This is where current Prime Minister Stephen Harper is now called upon to show his mettle as a true leader. History is beckoning him to step up to the plate and do whatever is necessary, in the interest of the nation, to take Canada out of this present economic upheaval and put it back on the path of sustained economic growth. Fall of PC govt on Jan 29 has a potential for another election. That will certainly not be a welcome thing for the Canadians; the nation can ill afford a period of instability at this stage.
So, whichever way you look at from, the present challenge is, in fact, the right opportunity for PM Harper to deliver and carve a niche for himself in the Canadian history. People say of Harper, based on their past experience, that he is prone to stubbornness, often short sighted, less open-minded, afraid of facing the nation (prefers to disappear at the time of crisis), poor negotiator, untactful, impulsive, unable to grasp the big picture, and so on.
But this is the ideal opportunity for Harper to prove people wrong. Can he do it? Sure, why not? But to do that he has to overcome some mental blocks and fixations. If you watch his body language, his choice of words on critical/difficult issues one often finds him exhibiting lack of confidence, lack of substance and trying to cover that up with sheepish smile. And, in the process of overcoming his lack of confidence, on many occasions Harper ends up overdoing his policy action. This has been a major weakness in his style of functioning.
But he can right his this weakness. He need not feel weak-kneed, nor find his confidence somewhat less. Why? Because, after all, he led his party to be the largest single party in the parliament in the recent elections. Surely that is indicative of his ability to connect with people in most parts of Canada, his ability to articulate, and to get good grasp on various issues.
So, instead of being diffident, sheepish, apologetic on key issues, he needs to go out there full blast in confidence and take the bull by the horn - understand what the problems are, what the possible options are, what the challenges in implementing them are, and what needs to be done politically and nationally to implement them.
After grasping all that, Harper needs to rise above the fear of failure (this is fundamental to succeed in life) and go about his business of showing what true leadership is and stand tall amidst his political peers. Once he is not afraid to fail and at the same time puts national interest to be paramount he would be able to deal with any Layton, Ignatieff, Duceppe and come out trumps. And, best of all, the Canadians will back him up in his efforts to pull the country out of the morass.
It will not be so simple as stated above, but once Harper plays on the front foot with confidence (and full grasp of the situation/solutions) he will automatically be able to come out with necessary tactfulness, negotiation skills, political savvy required to implement what is best for the country in the present moment.
His actions will, however, have to demonstrate that he is above petty politics, he knows what is good for Canada, he is clearheaded, honest, not bumbling and that he is most suited to be the captain of the team. The more he will succeed, the more will his confidence grow and he will keep firing on all cylinders. Gradually, his path will appear more smoother, with less hurdles.
Meanwhile, there is good news that Mr. Obama has decided to visit Canada after taking over as President of US. This provides a gilded opportunity to Canada to forge stronger partnership with US on various fronts - energy, trade and defence. But to be able to do so Harper has to first survive the vote on budget. If Harper can be the decisive Prime Minister the country needs him to be, surely he can not only survive the vote, he can further strengthen his position.
If PC's continue to lead the country after the budget vote, Harper will get the opportunity to meet with and to convince Obama about the strategic importance of Canada-US relations, about oilsands' relevance to US (and the steps Alberta is taking to address environment related concerns), clear confusions regarding NAFTA, cooperation on defence related matters. But Harper would do well not to carry any past baggage (i.e. close ties with outgoing president Bush etc) or raise any thorny issue like Arctic sovereignity etc.
One of the drawbacks of Canadian leaderships' 'thinking' in last 50-60 years has been that on international level it was not expansive enough, and not contextually politically savvy. (An aside: On national level the 'thinking' seemed to have been debilitatingly overshadowed by Anglo-philic predilections.) In any case, it is a golden opportunity for Harper to show that his policies are entirely Canada-centric, pragmatic, streetsmart on all issues - be it environment, Islamic radicalism, natural resources, economic world order or anything else.
A strong and vibrant Canada is also in the interest of USA, and world in general. Canada's journey towards becoming a strong and vibrant nation can be sure and certain provided Steven Harper gets his act correct. He probably is aware that he will be judged by history by his performance at this critical and historic juncture.
Mr Harper, opportunity is there for you to get your name etched in golden letters - but to do that you will have to rise to the occasion and grab it!
Now, let us step sideways and look at some key aspects currently confronting Canada. First, Canada is also in the grip of recession as are the other G-7 countries; the good news, however, is that Canada's economic woes are least as compared to any other G-7 country. Albeit, Canada's economic problems are less compared to its G-7 peers but they are not trivial either.
The unemployment figures released on 9th Jan paint a grim picture, and coupled with current contractionary tendencies of the economy (exacerbated by recessionary perception in the minds of the Canadians) the future doesn't portend encouraging signs.
When a country passes through tough times, if you had to pick up one thing that is needed to pull the country out of trouble what would you choose? Without doubt, the answer would be: 'real' leadership. It is a well known fact, to even non-academicians, that right leadership is fundamental to devising necessary strategy/suite of actions, convincing the people of the country to embrace the same and implementing it in timely and proper manner.
This is where current Prime Minister Stephen Harper is now called upon to show his mettle as a true leader. History is beckoning him to step up to the plate and do whatever is necessary, in the interest of the nation, to take Canada out of this present economic upheaval and put it back on the path of sustained economic growth. Fall of PC govt on Jan 29 has a potential for another election. That will certainly not be a welcome thing for the Canadians; the nation can ill afford a period of instability at this stage.
So, whichever way you look at from, the present challenge is, in fact, the right opportunity for PM Harper to deliver and carve a niche for himself in the Canadian history. People say of Harper, based on their past experience, that he is prone to stubbornness, often short sighted, less open-minded, afraid of facing the nation (prefers to disappear at the time of crisis), poor negotiator, untactful, impulsive, unable to grasp the big picture, and so on.
But this is the ideal opportunity for Harper to prove people wrong. Can he do it? Sure, why not? But to do that he has to overcome some mental blocks and fixations. If you watch his body language, his choice of words on critical/difficult issues one often finds him exhibiting lack of confidence, lack of substance and trying to cover that up with sheepish smile. And, in the process of overcoming his lack of confidence, on many occasions Harper ends up overdoing his policy action. This has been a major weakness in his style of functioning.
But he can right his this weakness. He need not feel weak-kneed, nor find his confidence somewhat less. Why? Because, after all, he led his party to be the largest single party in the parliament in the recent elections. Surely that is indicative of his ability to connect with people in most parts of Canada, his ability to articulate, and to get good grasp on various issues.
So, instead of being diffident, sheepish, apologetic on key issues, he needs to go out there full blast in confidence and take the bull by the horn - understand what the problems are, what the possible options are, what the challenges in implementing them are, and what needs to be done politically and nationally to implement them.
After grasping all that, Harper needs to rise above the fear of failure (this is fundamental to succeed in life) and go about his business of showing what true leadership is and stand tall amidst his political peers. Once he is not afraid to fail and at the same time puts national interest to be paramount he would be able to deal with any Layton, Ignatieff, Duceppe and come out trumps. And, best of all, the Canadians will back him up in his efforts to pull the country out of the morass.
It will not be so simple as stated above, but once Harper plays on the front foot with confidence (and full grasp of the situation/solutions) he will automatically be able to come out with necessary tactfulness, negotiation skills, political savvy required to implement what is best for the country in the present moment.
His actions will, however, have to demonstrate that he is above petty politics, he knows what is good for Canada, he is clearheaded, honest, not bumbling and that he is most suited to be the captain of the team. The more he will succeed, the more will his confidence grow and he will keep firing on all cylinders. Gradually, his path will appear more smoother, with less hurdles.
Meanwhile, there is good news that Mr. Obama has decided to visit Canada after taking over as President of US. This provides a gilded opportunity to Canada to forge stronger partnership with US on various fronts - energy, trade and defence. But to be able to do so Harper has to first survive the vote on budget. If Harper can be the decisive Prime Minister the country needs him to be, surely he can not only survive the vote, he can further strengthen his position.
If PC's continue to lead the country after the budget vote, Harper will get the opportunity to meet with and to convince Obama about the strategic importance of Canada-US relations, about oilsands' relevance to US (and the steps Alberta is taking to address environment related concerns), clear confusions regarding NAFTA, cooperation on defence related matters. But Harper would do well not to carry any past baggage (i.e. close ties with outgoing president Bush etc) or raise any thorny issue like Arctic sovereignity etc.
One of the drawbacks of Canadian leaderships' 'thinking' in last 50-60 years has been that on international level it was not expansive enough, and not contextually politically savvy. (An aside: On national level the 'thinking' seemed to have been debilitatingly overshadowed by Anglo-philic predilections.) In any case, it is a golden opportunity for Harper to show that his policies are entirely Canada-centric, pragmatic, streetsmart on all issues - be it environment, Islamic radicalism, natural resources, economic world order or anything else.
A strong and vibrant Canada is also in the interest of USA, and world in general. Canada's journey towards becoming a strong and vibrant nation can be sure and certain provided Steven Harper gets his act correct. He probably is aware that he will be judged by history by his performance at this critical and historic juncture.
Mr Harper, opportunity is there for you to get your name etched in golden letters - but to do that you will have to rise to the occasion and grab it!
Thursday, December 25, 2008
WHY IN GOD's NAME DID OIL REACH $147.27 ON JULY 11, 2008?!!
The whole world knows that crude oil prices are down - it even crashed below $40/barrel. Alright, so? So? Well, a simple question is bothering me no end. The question is: What changed in terms of demand for crude oil, from July 11 and now, that the oil prices are going southwards continually? Has the demand plummeted so much in last 5 months that it should cause the crude oil price to breach even the $40/barrel price?
And, another question that is disturbing me is: what were the factors that led to the price of $147.27/barrel in the first place? Or, was the $147.27 an artificially bloated price? Oh, how dumb of me! Of course, it was bloated like hell! Okay, but how was it artificially inflated to that level? What were the manipulating factors that caused it?
It may be mentioned here that there was a well known CEO who said around that time, when oil prices were riding the crests, that oil prices were high simply based on demand and supply relationship, that there was no hanky panky, and that oil traders played no role in pushing the floor price artificially. You know who that CEO was? He was none other than the CEO of a major oil producer - BP!!
So, can the 'great', 'intelligent' CEO of BP please explain why the oil prices are languishing now? Has the demand suddenly dropped so much - more than 70% - that the crude prices went crashing? Was he, when he tried to justify the upwardly moving prices, trying to create some sort of smoke screen, or is he really an idiot of highest order who did not have the requisite intellectual ability to fathom the actual reason?
Nah, chances of him being a classic idiot are remote given that he rose to the position of CEO. Surely, it doesn't seem that BP would have had a corporate goal to create a Guinness Book of Records of sorts by becoming the first oil company of that stature to install a super idiot as CEO.
Anyway, one thing is certain: the rise of oil to $147.27 and then fall to below $40 is definitely not result of natural market forces. Both these phenonmenon, especially, the rise to $140+ smack of something mysterious, surreptitious, insidious and befitting cloak-and-dagger operations.
So, what caused the oil prices to get skyrocketed upwards all the way to $147.27? Was there a high level international conspiracy? Who would be the players in such a conspiracy? There is no doubt that the biggest gainers of high crude prices were the OPEC, and other major oil producing nations, like, Russia, Venezuela and, of course, the oil companies.
Is it possible, then, that OPEC or some non-OPEC countries were in cahoots with oil companies to somehow enlist the help of oil traders in pushing up the prices. In all of this how can one ignore the role of the media - print or TV - which kept up the hysteria as if oil is going to run out soon, and it added to the maddening frenzy that besieged the world oil trade. Whatever it was, there certainly was something utterly fishy that happened at a very high level in pushing the oil prices to $147.27.
Then came the downward movement in oil prices as soon as the US financial institutions started to come down crashing like pack of cards. In view of that in Q3 of 2008, IEA made only a marginal reduction in global demand of oil in 2008 from their earlier estimates of 86.8 million barrels per day to little more than 86 million barrels. The corresponding supply figure, as per IEA, at that time was a little more than 88 million barrels per day. This clearly shows that the demand for oil was not estimated to shrink so drastically so as to warrant a drop of crude price from $147.27 to below $40.0 per barrel.
Just as the price spike to $147.27 seems very fishy, is the precipitous drop in prices also due to some fishy reason that the world doesn't know of? There is a theory that Saudi Arabia periodically causes the oil prices to drop below $50 per barrel to render the oil production projects in other countries to become economically unviable.
Let us think for a moment as to which countries will hurt most if the crude prices were to hover below $50 per barrel. Well, the countries who hurt most are Russia, Iran, Venezuela among others. Surely, US won't mind these three getting hurt economically.
So, was US part of some concerted action to engineer such a drastic drop in crude prices? One may argue that low prices would impact adversely the profits of big US oil companies who are said to be very close to the Bush administration. But then national interests always take precedence over corporate interests, never mind even if they happen to be US corporate entities. One may mention here for the record that owing to sharp drop in oil prices the OPEC countries are estimated to have cumulatively lost more than $700 billion dollars.
Whatever may be the real truth, one thing is certain - the rise of oil price per barrel to $147.27 can not be justified by any rational economic theory. In other words, the rise of prices in first half of 2008 was due to some very high level concerted operation. But who were the main actors in doing this, that is not clear at present. May be in some future time the truth will see the light of the day.
Equally intriguing is the steepness of the fall in prices. Who knows who pulled the rug from underneath the feet of the beneficiaries of high crude prices. Who is trying to cut whom is not clear, some thing very sinister of very high level can not be ruled out. Why this inference can not be dismissed aside is because the global demand for oil has certainly not contracted by more than 70 percent during the period July-end 2008.
In Nov/Dec 2008, OPEC announced cuts of 4+ million barrels per day to stem the falling crude prices. Analysts say market did not feel buoyed by these cuts, and depressing economic news continued to pummel the oil prices. The consensus among the crystal ball gazers is that oil may hit $75 per barrel only in 2nd half of 2009.
It seems a James Bond like figure may only be able to unravel the saga of rise and fall of crude prices in 2008, I am kidding. Seriously, the unprecedented rise and fall of crude prices in latter half of 2008 is something that is extremely serious and people somehow need to reach to the bottom of this story. While the world will wait eagerly for the truth to be unravelled, the immediate challenge facing the G-20 nations is to somehow reverse the recessionary situation and bring the economies back to growth mode.
When the economies look up again, the oil prices will automatically find the motivation to move upwards. Will another cycle of unprecedented rise in crude prices commence? We will have to wait and see. But before that let us hope that the global economy gets back on track soon. Amen!
And, another question that is disturbing me is: what were the factors that led to the price of $147.27/barrel in the first place? Or, was the $147.27 an artificially bloated price? Oh, how dumb of me! Of course, it was bloated like hell! Okay, but how was it artificially inflated to that level? What were the manipulating factors that caused it?
It may be mentioned here that there was a well known CEO who said around that time, when oil prices were riding the crests, that oil prices were high simply based on demand and supply relationship, that there was no hanky panky, and that oil traders played no role in pushing the floor price artificially. You know who that CEO was? He was none other than the CEO of a major oil producer - BP!!
So, can the 'great', 'intelligent' CEO of BP please explain why the oil prices are languishing now? Has the demand suddenly dropped so much - more than 70% - that the crude prices went crashing? Was he, when he tried to justify the upwardly moving prices, trying to create some sort of smoke screen, or is he really an idiot of highest order who did not have the requisite intellectual ability to fathom the actual reason?
Nah, chances of him being a classic idiot are remote given that he rose to the position of CEO. Surely, it doesn't seem that BP would have had a corporate goal to create a Guinness Book of Records of sorts by becoming the first oil company of that stature to install a super idiot as CEO.
Anyway, one thing is certain: the rise of oil to $147.27 and then fall to below $40 is definitely not result of natural market forces. Both these phenonmenon, especially, the rise to $140+ smack of something mysterious, surreptitious, insidious and befitting cloak-and-dagger operations.
So, what caused the oil prices to get skyrocketed upwards all the way to $147.27? Was there a high level international conspiracy? Who would be the players in such a conspiracy? There is no doubt that the biggest gainers of high crude prices were the OPEC, and other major oil producing nations, like, Russia, Venezuela and, of course, the oil companies.
Is it possible, then, that OPEC or some non-OPEC countries were in cahoots with oil companies to somehow enlist the help of oil traders in pushing up the prices. In all of this how can one ignore the role of the media - print or TV - which kept up the hysteria as if oil is going to run out soon, and it added to the maddening frenzy that besieged the world oil trade. Whatever it was, there certainly was something utterly fishy that happened at a very high level in pushing the oil prices to $147.27.
Then came the downward movement in oil prices as soon as the US financial institutions started to come down crashing like pack of cards. In view of that in Q3 of 2008, IEA made only a marginal reduction in global demand of oil in 2008 from their earlier estimates of 86.8 million barrels per day to little more than 86 million barrels. The corresponding supply figure, as per IEA, at that time was a little more than 88 million barrels per day. This clearly shows that the demand for oil was not estimated to shrink so drastically so as to warrant a drop of crude price from $147.27 to below $40.0 per barrel.
Just as the price spike to $147.27 seems very fishy, is the precipitous drop in prices also due to some fishy reason that the world doesn't know of? There is a theory that Saudi Arabia periodically causes the oil prices to drop below $50 per barrel to render the oil production projects in other countries to become economically unviable.
Let us think for a moment as to which countries will hurt most if the crude prices were to hover below $50 per barrel. Well, the countries who hurt most are Russia, Iran, Venezuela among others. Surely, US won't mind these three getting hurt economically.
So, was US part of some concerted action to engineer such a drastic drop in crude prices? One may argue that low prices would impact adversely the profits of big US oil companies who are said to be very close to the Bush administration. But then national interests always take precedence over corporate interests, never mind even if they happen to be US corporate entities. One may mention here for the record that owing to sharp drop in oil prices the OPEC countries are estimated to have cumulatively lost more than $700 billion dollars.
Whatever may be the real truth, one thing is certain - the rise of oil price per barrel to $147.27 can not be justified by any rational economic theory. In other words, the rise of prices in first half of 2008 was due to some very high level concerted operation. But who were the main actors in doing this, that is not clear at present. May be in some future time the truth will see the light of the day.
Equally intriguing is the steepness of the fall in prices. Who knows who pulled the rug from underneath the feet of the beneficiaries of high crude prices. Who is trying to cut whom is not clear, some thing very sinister of very high level can not be ruled out. Why this inference can not be dismissed aside is because the global demand for oil has certainly not contracted by more than 70 percent during the period July-end 2008.
In Nov/Dec 2008, OPEC announced cuts of 4+ million barrels per day to stem the falling crude prices. Analysts say market did not feel buoyed by these cuts, and depressing economic news continued to pummel the oil prices. The consensus among the crystal ball gazers is that oil may hit $75 per barrel only in 2nd half of 2009.
It seems a James Bond like figure may only be able to unravel the saga of rise and fall of crude prices in 2008, I am kidding. Seriously, the unprecedented rise and fall of crude prices in latter half of 2008 is something that is extremely serious and people somehow need to reach to the bottom of this story. While the world will wait eagerly for the truth to be unravelled, the immediate challenge facing the G-20 nations is to somehow reverse the recessionary situation and bring the economies back to growth mode.
When the economies look up again, the oil prices will automatically find the motivation to move upwards. Will another cycle of unprecedented rise in crude prices commence? We will have to wait and see. But before that let us hope that the global economy gets back on track soon. Amen!
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