Market Madness : A Century of Oil Panics, Crises, and Crashes

[ Market Madness: A Century of Oil Panics, Crises, and Crashes By ( Author ) Feb-2015 Hardcover In Market Madness, Dr. Blake Clayton, A Wall Street Stock Analyst And Former Oxford Researcher, Draws On A Century's Worth Of Statistical Data To Offer A Revolutionary New Look The History Of Oil And Future Of Energy. The Culmination Of A Multi-year Study, He Shows How Generational Fears About An Imminent, Irreversible Shortage Of Oil Punctuate The History Of Oil Since Its Earliest Days. He Explores The Conditions In Which Oil Supply Fears Arise, Gain Popularity, And Eventually Wane, And Shows How Important Such Stories Can Be In Affecting Financial Markets. He Links These Episodes To The Behavioral Concept Of Irrational Exuberance And New Era Economic Thinking, First Popularized By Nobel Laureate Yale Economist Robert Shiller, To Show How Unfounded Pessimism Affects The Market For Oil And Other Exhaustible Resources. Acknowledging The Significant Geological And Structural Changes The Oil Market Has Undergone Over The Last Century, The Book Does Not Dismiss Today's Shortage Fears Out Of Hand, But Asks What They Reveal About How Commodity Markets Function And What That Means For Investors And Public Officials. Clayton Argues That The Lessons To Be Learned From This History Are The Need For Quality Data About Us And Global Oil Reserves, The Importance Of Clear Communication From Public Officials About Energy Markets And Resources, And The Value Of Transparency In Commodities Markets. While These Measures Will Not Eliminate Volatility And Unpredictability In Energy Markets, He Writes, They Would Mitigate Unnecessary Price Spikes And Improve Investor And Government Decision-making. The Book Addresses Popular Debates In Economics And Finance On How Mass Beliefs Affect Financial Markets While Also Offering A Colorful Narrative History For General Readers About The Dramatic Booms And Busts Of The American Oil Industry-- Blake Clayton Uses Four Historical Case Studies To Document Claims About The Future Of The U.s. Oil Supply And Discuss Their Impact On The Market And Policymaking-- Machine Generated Contents Note: -- Chapter 1 -- Introduction -- Chapter 2 -- A National Crisis Of The First Magnitude -- The United States Geological Survey In An Era Of Booming Demand, 1909-1927 -- Chapter 3 -- A New Era Of Scarcity And Higher Prices -- Wartime Demand And The End Of American Self-reliance In Oil, 1940-1949 -- Chapter 4 -- A Problem Unprecedented In Our History -- American Anxiety In The Age Of Opec, 1970-1986 -- Chapter 5 -- A Permanent Radical Rise In Oil Prices -- Peak Oil Takes Wall Street, 1998-2013 -- Chapter 6 -- Conclusion. Blake C. Clayton. Includes Bibliographical References And Index. Stock market booms are cause for celebration. But when oil prices soar because supplies are failing to keep up with demand, the response is nearly always apocalyptic. Predictions of the end of oil can create anxiety on Wall Street and in Washington, stoking fears that production has hit a ceiling and prices will rise in perpetuity. Yet these dire visions have always proven wrong.Market Madness is the story of four waves of American anxiety over the last 100 years about a looming end to oil reserves. Their sweeping pattern-as large price increases lead to widespread shortage fears that eventually dissipate when oil production rises again and prices moderate-has defined the wild price swings in the oil market down to the present day.Blake Clayton, a Wall Street stock analyst and adjunct fellow at the Council on Foreign Relations, makes the case for the need for better information, communication and transparency. While these measures will not eliminate volatility and unpredictability completely, they would mitigate unnecessary price spikes and improve both investor and government decision-making.Market Madness is the first study to employ Nobel Laureate economist Robert Shiller's "new era economics" beyond the markets to which he famously applied it-the 1990s dot-com equity market and the mid-2000s housing market-in order to better understand the dynamics of speculative bubbles and irrationality in the commodities markets. In so doing, it breaks new ground in illuminating how mass beliefs about the future of a vital asset like oil take shape and what the future of energy may hold. Stock market booms are cause for celebration. But when oil prices soar because supplies are failing to keep up with demand, the response is nearly always apocalyptic. Predictions of the end of oil can create anxiety on Wall Street and in Washington, stoking fears that production has hit a ceiling and prices will rise in perpetuity. Yet these dire visions have always proven wrong. Market Madness is the story of four waves of American anxiety over the last 100 years about a looming end to oil reserves. Their sweeping pattern-as large price increases lead to widespread shortage fears that eventually dissipate when oil production rises again and prices moderate-has defined the wild price swings in the oil market down to the present day. Blake Clayton, a Wall Street stock analyst and adjunct fellow at the Council on Foreign Relations, makes the case for the need for better information, communication and transparency. While these measures will not eliminate volatility and unpredictability completely, they would mitigate unnecessary price spikes and improve both investor and government decision-making. Market Madness is the first study to employ Nobel Laureate economist Robert Shiller's "new era economics" beyond the markets to which he famously applied it-the 1990s dot-com equity market and the mid-2000s housing market-in order to better understand the dynamics of speculative bubbles and irrationality in the commodities markets. In so doing, it breaks new ground in illuminating how mass beliefs about the future of a vital asset like oil take shape and what the future of energy may hold.