• 4 minutes "Natural Gas Trading Picks Up Considerably Amid High Volatility" by Charles Kennedy - ...And is U.S. NatGas Futures dramatically overbought at the $6.35 range?
  • 8 minutes How Far Have We Really Gotten With Alternative Energy
  • 12 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 45 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 hour Revisiting: "The U.S. Grid Isn’t Ready For A Major Shift To Renewables" from March 2021 by Irina Slav at OILPRICE
  • 6 days "The Calm Before The Storm In Oil Markets" by Tom Kool of OILPRICE and seen at YahooFinance
  • 2 days How cheap Chinese tires might explain Russia's 'stalled' 40-mile-long military convoy in Ukraine
  • 6 days "Russia will stop 'in a moment' if Ukraine meets terms - Kremlin" by Reuters via Yahoo News...but Reuters suddenly cut out the balanced part of the story.
  • 6 days Will Variants and Ill-Health Continue to Plague Economic Outlooks?
  • 6 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
Is China’s Digital Yuan The Death Knell For Crypto?

Is China’s Digital Yuan The Death Knell For Crypto?

China has just introduced another…

How Tesla Is Overcoming The Global Chip Shortage

How Tesla Is Overcoming The Global Chip Shortage

Automakers across the globe are…

New ESG Wave Hits Wall With Disinterested Investors

New ESG Wave Hits Wall With Disinterested Investors

Some funds have become obsessed…

Charles Hugh Smith

Charles Hugh Smith

Charles Hugh Smith has been an independent journalist for 22 years. His weblog, www.oftwominds.com, draws two million visits a year with unique analyses of global…

More Info

Premium Content

The Similarities Between Deepwater Horizon and Global Financial Meltdown

The explosion of Deepwater Horizon and the collapse of Lehman Brothers share similar characteristics of risk, denial and coverup.

My good friend G.F.B. recently observed that the Deepwater Horizon catastrophe uncannily mirrors the global financial meltdown that was triggered by the September, 2008 collapse of Lehman Brothers.

G.F.B. suggested that the Deepwater Horizon fiasco mirrored the global financial meltdown, almost as if it were a physical manifestation of the same hubris, denial of risk, manipulation and misinformation which collapsed the global financial house of cards.

Deepwater Horizon Explosion

How? Consider:

1. The extreme levels of inherent risk in each system were downplayed/misunderstood by those responsible for their management.

2. The unprecedented risk intrinsic to each system was masked by facsimiles of regulation and specialized expertise.

3. The initial warning signs were dismissed, downplayed or ignored.

4. Each system was on the outer edge of human engineering (mechanical and financial) but was treated by regulators and managers as entirely standard.

5. Once the system collapsed, nobody knew how to fix it.

6. As the full extent of the damage became apparent, those responsible sought to mask the true extent pf the damage.

7. The mainstream media and elected officials unskeptically accepted prevarications, mis-statements, misinformation and manufactured facades as representations of the truth.

8. As the true extent of the damage, distortion/manipulation and failure of responsible authorities became undeniable, public confidence in government, regulatory agencies and the market irrevocably eroded.

Here is a chart of the market with my notes. This basic pattern applies to Deepwater Horizon as well, only on a much shorter timescale.

Systemic Collapse

Didn't anyone notice that it is the height of insanity to be drilling down 18,000 feet down into a seabed which is 5,000 below the surface of the sea?

There's plenty of oil around, really; we're just drilling down 23,000 feet into marginal oil deposits just because we enjoy a challenge.

Didn't anyone notice that becoming entirely dependent on unprecedented levels of extreme leverage and trillions of dollars of derivatives for "economic growth" was an insane proposition doomed to eventual implosion?

Drilling Depths

First, walk 5,067 feet (roughly a mile or 1.5 kilometers). Then walk 18,360 feet (roughly 5.6 KM). You have traversed the depth of the well drilled by Deepwater Horizon.

Charles Hugh Smith has been an independent journalist for 22 years. His weblog, www.oftwominds.com, draws two million visits a year with unique analyses of global finance, stocks and political economy. He has written six novels and Weblogs & New Media: Marketing in Crisis and just released Survival+: Structuring Prosperity for Yourself and the Nation.


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News