From a technical viewpoint, if it pierces the green line, it will go much lower.  My expectation is that it will pierce the line and go lower, almost entirely because we pay too little for gas at the pump.

The oil industry is huge and hurting.  More importantly, the banks that lend to that industry now have loans of less value and will have to take write-offs.  Does that sound like the banks in 2008 that held mortgage-backed securities, which are actually nothing more than exotic loans?  A financial crisis comes through the banks, and we may be facing one.

Here’s what I don’t know:  (1) how does the proportion of energy loans today compare to the level of mortgage-backed securities in 2008, and (2) will this financial crisis cascade more slowly because it is more apparent that the last one?  Stay tuned . . .