Near the end of the article, Steve Kroft writes:
The oil bubble began to deflate early last fall when Congress threatened new regulations and federal agencies announced they were beginning major investigations. It finally popped with the bankruptcy of Lehman Brothers and the near collapse of AIG, who were both heavily invested in the oil markets. With hedge funds and investment houses facing margin calls, the speculators headed for the exits.So was there a vicious circle? Did a decline in the credit market cause LB, AIG and others to sell their oil futures, causing a decline in oil prices, so that their remaining oil holdings value declined, causing further ratio problems, making credit problems appear more severe?
That is, was there an oil bubble inside the credit bubble? How were the two problems linked?
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Perhaps cutting interest rates simply isn't enough to offset losses on oil futures.