{"id":2330,"date":"2014-12-02T12:55:20","date_gmt":"2014-12-02T17:55:20","guid":{"rendered":"http:\/\/olduvai.ca\/?p=2330"},"modified":"2014-12-02T12:55:20","modified_gmt":"2014-12-02T17:55:20","slug":"oftwominds-charles-hugh-smith-the-oil-drenched-black-swan-part-2-the-financialization-of-oil","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=2330","title":{"rendered":"oftwominds-Charles Hugh Smith: The Oil-Drenched Black Swan, Part 2: The Financialization of Oil"},"content":{"rendered":"<p><a href=\"http:\/\/charleshughsmith.blogspot.ca\/2014\/12\/the-oil-drenched-black-swan-part-2.html\">oftwominds-Charles Hugh Smith: The Oil-Drenched Black Swan, Part 2: The Financialization of Oil<\/a>.<\/p>\n<p style=\"display: inline; height: 0px; overflow-x: visible; overflow-y: visible; padding: 1px 0px 1px 0px; margin: 0px;\"><span style=\"font-family: Verdana, sans-serif; padding: 0px; margin: 0px;\"><i style=\"background-color: white; padding: 0px; margin: 0px;\">All the analysts chortling over the &#8220;equivalent of a tax break&#8221; for consumers are about to be buried by an avalanche of defaults and crushing losses as the chickens of financializing oil come home to roost.<\/i><\/span><\/p>\n<div style=\"background-color: white; padding: 0px; margin: 0px;\"><b style=\"padding: 0px; margin: 0px;\"><span style=\"font-family: Verdana, sans-serif; padding: 0px; margin: 0px;\"><br style=\"padding: 0px; margin: 0px;\" \/><\/span><\/b><span style=\"font-family: Verdana, sans-serif; padding: 0px; margin: 0px;\"><b style=\"padding: 0px; margin: 0px;\">The pundits crowing about the stimulus effect of lower oil prices on consumers are missing the real story, which is the financialization of oil.<\/b>\u00a0<i style=\"padding: 0px; margin: 0px;\">Financialization<\/i>\u00a0is another word that is often bandied about without the benefit of a definition.<\/span><\/div>\n<div style=\"background-color: white; padding: 0px; margin: 0px;\"><\/div>\n<div style=\"background-color: white; padding: 0px; margin: 0px;\"><b style=\"padding: 0px; margin: 0px;\"><span style=\"font-family: Verdana, sans-serif; padding: 0px; margin: 0px;\">Here is my definition:<\/span><\/b><\/div>\n<div style=\"background-color: white; padding: 0px; margin: 0px;\"><i style=\"padding: 0px; margin: 0px;\"><span style=\"font-family: Verdana, sans-serif; padding: 0px; margin: 0px;\">Financialization is the mass commodification of debt and debt-based financial instruments collaterized by previously low-risk assets, a pyramiding of risk and speculative gains that is only possible in a massive expansion of low-cost credit and leverage.<\/span><\/i><br style=\"padding: 0px; margin: 0px;\" \/><i style=\"padding: 0px; margin: 0px;\"><span style=\"font-family: Verdana, sans-serif; padding: 0px; margin: 0px;\"><br style=\"padding: 0px; margin: 0px;\" \/><\/span><\/i><\/div>\n<div style=\"background-color: white; padding: 0px; margin: 0px;\"><span style=\"font-family: Verdana, sans-serif; padding: 0px; margin: 0px;\">That is a mouthful, so let&#8217;s break it into bite-sized chunks.<\/span><br style=\"padding: 0px; margin: 0px;\" \/><span style=\"font-family: Verdana, sans-serif; padding: 0px; margin: 0px;\"><br style=\"padding: 0px; margin: 0px;\" \/><\/span><\/div>\n<div style=\"background-color: white; padding: 0px; margin: 0px;\"><b style=\"padding: 0px; margin: 0px;\"><span style=\"font-family: Verdana, sans-serif; padding: 0px; margin: 0px;\">Home mortgages are a good example of how financialization increases financial profits by jacking up risk and distributing it to suckers who don&#8217;t recognize the potential for collapse and staggering losses.<\/span><\/b><\/div>\n<div style=\"background-color: white; padding: 0px; margin: 0px;\">&#8230;click on the above link to read the rest of the article&#8230;<\/div>\n","protected":false},"excerpt":{"rendered":"<p>oftwominds-Charles Hugh Smith: The Oil-Drenched Black Swan, Part 2: The Financialization of Oil. All the analysts chortling over the &#8220;equivalent of a tax break&#8221; for consumers are about to be buried by an avalanche of defaults and crushing losses as the chickens of financializing oil come home to roost. The pundits crowing about the stimulus [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[3],"tags":[63,195,1573,588],"class_list":["post-2330","post","type-post","status-publish","format-standard","hentry","category-energy-2","tag-banks","tag-debt","tag-financialization","tag-oil"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/2330","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2330"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/2330\/revisions"}],"predecessor-version":[{"id":2331,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/2330\/revisions\/2331"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}