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Blame the US Federal Reserve for this one.

Since the Fed lowered interest rates to near zero during the financial crisis, the world has been flooded with cheap money. Emerging market companies, banks and governments have responded by taking out dollar-denominated loans. Now that US interest rates are rising again and the dollar is strengthening, those debts are becoming a lot more expensive to pay back.

If you were thinking about taking an early retirement and living off the fat of your financial market investments, think again.

Wall Street is having its worst start to a year ever, with the S&P 500 falling more than 8 percent in less than three weeks. The losses have spread like a bad flu to other regions — China and Japan have tumbled into bear markets and London’s FTSE 100 looks set to join them. (The technical definition of a bear market is a fall of 20 percent or more from a recent high). European markets are deep in negative territory, too.

Global oil prices have plunged in the past 18 months and key benchmarks have begun trading below $30 a barrel, the lowest level in more than a decade, as a global glut and China growth fears weigh on demand. The International Energy Agency warned Tuesday the oil market could “drown in oversupply.” Sounds scary, right? It is.

The latest data show China’s economy grew at its slowest pace in 25 years in 2015, confirming fears that the world’s growth engine is losing steam. It expanded by 6.9 percent last year, compared with 7.3 percent in 2014.

This is how Hillary Clinton loses: How a market slowdown could become a recession — and put Donald Trump in the White House

www.salon.com|Conor Lynch

Seven years ago, as the economy was spiraling out of control after many years of debt-induced mania and Wall Street speculation, the George W. Bush administration and its lax regulatory policies were widely blamed — as they deserved to be — for contributing to the worst financial crisis in eight decades. Bush had overseen years of financial deregulation and tax cuts for the wealthy, while his chairman of the Federal Reserve, Alan Greenspan, had sustained the housing bubble with easy credit. But the irresponsible behavior that led to the financial crisis had been going on for many years before Bush, and both Republican and Democratic presidents — including Bill Clinton, Ronald Reagan, and even Jimmy Carter — had started the deregulatory madness with a drunken optimism, motivated by ideological economists, political think-tanks, and corporate lobbying. The financial liberalization movement, along with the rapid globalization of the world economy, laid the groundwork for the pre-crisis bubble and the 2007-08 crash. Policymakers and regulators deserved a lot of the blame, but the system itself deserved even more. 

Is the next recession on the way? Here’s everything you need to know about the market’s oil collapse

www.salon.com|David Dayen

Given how the first few weeks of January have played out, I feel sorry for anyone who chose as a New Year’s resolution to check their retirement accounts more assiduously. Stocks hit a 15-month low last Friday. Analysts cite a number of factors in the slowdown – China’s economic woes, the strong dollar – but the biggest culprit appears to be the dip in the price of oil, from a high of $100 a barrel in mid-2014 to under $29 a barrel, which is over three times cheaper than the price of the barrel itself. By the way, the Iranian nuclear deal, which will allow the major oil producer to return to global markets, makes future price prospects worse, not better.

There will be chaos: Big Oil’s collapse and the birth of a new world order

www.salon.com|Michael Klare

As 2015 drew to a close, many in the global energy industry were praying that the price of oil would bounce back from the abyss, restoring the petroleum-centric world of the past half-century.  All evidence, however, points to a continuing depression in oil prices in 2016 — one that may, in fact, stretch into the 2020s and beyond.  Given the centrality of oil (and oil revenues) in the global power equation, this is bound to translate into a profound shakeup in the political order, with petroleum-producing states from Saudi Arabia to Russia losing both prominence and geopolitical clout.

To put things in perspective, it was not so long ago — in June 2014, to be exact — that Brent crude, the global benchmark for oil, was selling at $115 per barrel.  Energy analysts then generally assumed that the price of oil would remain well over $100 deep into the future, and might gradually rise to even more stratospheric levels.  Such predictions inspired the giant energy companies to invest hundreds of billions of dollars in what were then termed “unconventional” reserves: Arctic oil, Canadian tar sands, deep offshore reserves, and dense shale formations. It seemed obvious then that whatever the problems with, and the cost of extracting, such energy reserves, sooner or later handsome profits would be made. It mattered little that the cost of exploiting such reserves might reach $50 or more a barrel.

Oil, money, politics and evil: Our leading Middle East ally is the worst country imaginable

www.salon.com|Andrew O'Hehir

American foreign policy is full of things we can’t see and things we don’t talk about. The drone war of the Obama years; the “extraordinary rendition” and “enhanced interrogation” of the George W. Bush years. Nixon and Kissinger’s secret bombing campaign in Cambodia. The overthrow of democratic governments we didn’t like: Mohammad Mossadegh in Iran in 1953, Patrice Lumumba in the Congo in 1961, Salvador Allende in Chile in 1973. Once you get started with this stuff it’s hard to stop, and pretty soon your friends are giving you that look, like they’re wondering at what point you’ll start talking about your stormy personal relationship with Richard Helms, or the microchips implanted in your dental work.

But even by those standards, the case of Saudi Arabia is special. We love Saudi Arabia so much! The Bush family loves Saudi Arabia; the Clinton family loves Saudi Arabia. You and I are frequently told that we love Saudi Arabia, even if we aren’t exactly sure why. 

The House GOP’s under-the-radar oil coup: The dangerous domestic bailout that they’re almost certain to win

www.salon.com|David Dayen

Here are some questions for you to ponder today: What if the first major piece of legislation after the historic international climate agreement in Paris gives domestic oil companies lucrative financial incentives to spew more carbon into the atmosphere? What if the first item the President signs into law after the climate accords assures the very spike in drilling that scientists believe we cannot afford within our carbon budget?

That appears to be the likely result of an end-of-the-year deal in Congress. Republican insistence and Democratic acquiescence has paved the way for Washington to lift a 40 year-old ban on oil exports, which will not only aid a hurting domestic oil industry, but which would increase carbon pollution in the United States, and probably around the world.

Fracking is still not the answer: Gas will not solve the climate-warming problem

www.salon.com|Tim Flannery

Until the plunging oil price distracted analysts, the debate about gas played out endlessly in the financial pages of the world’s newspapers. The extraordinary boom in the shale gas industry, beginning around 2000, seemed to open endless possibilities. Will gas replace coal? Will oil from shale gas extend the fossil fuel era for transport? And will cheap gas delay the adoption of renewables in energy generation? Shale gas already accounts for 40 per cent of US natural gas production and 29 per cent of oil. As of 2014, most shale gas reserves were being drilled in the US. The sale of condensates alone provides a profit when the resource is exploited, so the gas can then be sold for next to nothing. This cheap gas has not only driven coal from the market, but helped rejuvenate the American economy, laying the basis for energy independence and the return to the US of large-scale chemical and manufacturing industries that had been moving offshore for decades. But the question of how big the future of gas might be remains.

Blood for oil: U.S. State Dept. calls Bahrain’s tyrannical monarchy a “close, valued partner,” thanks it for oil

www.salon.com|Ben Norton

“It is very good to be in Bahrain—a close, valued, and longstanding partner of the United States,” remarked Deputy Secretary of State Antony Blinken in Bahraini capital Manama on Oct. 31.

Although a “close” U.S. ally, Bahrain is a tyrannical monarchy. It brutally represses pro-democracy activists and imprisons peaceful political opponents. Amnesty International reports the Bahraini government has for years continued to “stifle and punish dissent and to curtail freedoms of expression, association, and assembly.” The human rights organization furthermore notes that Bahraini authorities maintain “a large degree of impunity amid continuing reports of torture of detainees and the use of excessive force against protesters.”

Human Rights Watch has documented the same widespread violations of human rights, and warned that “American silence on the subject” makes political change “less likely, to the detriment of Bahraini citizens, global norms against torture, and American credibility as an advocate of human rights.”

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The executives at the helms of the 30 biggest oil, gas and coal companies in the United States took home a collective $6 billion in compensation over the past five years, a new report from the Institute for Policy Studies found.

That’s twice the money, just to drive the point home, that the U.S. pledged to help developing nations adapt to the impacts of climate change, by which they are expected to be disproportionately affected.

Spurred by the advent of fracking and other high-tech ways of getting at North America’s fossil fuel reserves, the oil and gas industry has, for the past decade, been drilling at an astounding rate of 50,000 wells per year. This may be a large continent, but their impact on the landscape is nonetheless enormous. The industry’s total operations, say researchers at the University of Montana, Missoula in a new study, occupy land area three times the size of Yellowstone National Park, “transforming millions of hectares of the Great Plains into industrialized landscapes” that are rarely converted back after the drillers have gone on.

In just a three week period earlier this year, three oil trains careened off the tracks and burst into flames, burning for days in West Virginia, rural Illinois and Ontario. They caused no deaths and few injuries, but the West Virginia explosion occurred near enough to a town that one home was destroyed and hundreds were forced to evacuate; they were best characterized, perhaps, as disruptions. The same situation in Jersey City, federal officials say, could be an unprecedented disaster.

The Gulf of Mexico is rebounding from the 2010 BP oil spill, BP is pleased to announce. “The science is showing that most of the environmental impact occurred immediately after the accident — during the spring and summer 2010 — in areas near the wellhead and along oiled beaches and marshes,” the company concluded in a report released Monday. “Areas that were affected are recovering, and data BP has collected and analyzed to date do not indicate a significant long-term impact to the population of any Gulf species.”

Many reasons have been provided for the dramatic plunge in the price of oil to about $60 per barrel (nearly half of what it was a year ago): slowing demand due to global economic stagnation; overproduction at shale fields in the United States; the decision of the Saudis and other Middle Eastern OPEC producers to maintain output at current levels (presumably to punish higher-cost producers in the U.S. and elsewhere); and the increased value of the dollar relative to other currencies. There is, however, one reason that’s not being discussed, and yet it could be the most important of all: the complete collapse of Big Oil’s production-maximizing business model.

It’s a good bet that someplace in North America is on fire right now, raging so out of control that officials have to let it burn itself out. And it happened because highly flammable oil was placed on a train for shipping, and something went drastically wrong. Because so much oil is transported by rail these days, the probabilities of catastrophe have elevated significantly. We haven’t ruined a major population center yet only through dumb luck; and we haven’t cracked down on this treacherous practice only because of the enormous power of the industry.