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Through Q2 08 GDP was muddling through with modestly positive numbers.
Then it hit the wall in July as crude oil and the commodities in general broke down courtesy of Mike Masters and Joe Lieberman.
Soon afterward the main street credit crunch intensified.
What I now suspect happened is that the US energy/commodity industry got the rug pulled out from under it as the transfer of nominal wealth from pension funds to passive commodity strategies to energy and commodity producers fell?
The straw that broke the camel’s back?
This sector had been holding up well with the higher prices, and energy producing regions had been doing reasonably well.
Domestically, the US produces about 8 million bpd of crude plus a lot of natural gas and other commodities that fell in price.
While the fall in prices benefited consumers, they were/are slow to react with more spending.