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Hubbert Peak Theory of Oil Rock

Posted By Barry Ritholtz On November 13, 2009 @ 9:30 am In Really, really bad calls,Technical Analysis | Comments Disabled

Long standing readers of TBP know I like to try to slip in a lesson or two. The humor and money making market commentary is used as a device to keep you coming back and learning, despite yourself.

Today, I require no pretense for the edumacation. Instead, I will demonstrate one of my favorite peeves, the folly of Confusing Correlation with Causation, and I wll use but a single chart.

Courtesy of Overthinking It [1], those of you unfamiliar with the Correlation/Causation distinction will learn one of 2 things: Either the lack of really good modern rock songs recently is causing oil production to falter, or conversely, why peak oil has given us Boy Bands, Madonna, and Clearchannel Radio.

Those of you who understand causation can merely smile . . .

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Why We’re All Out of Good Songs
500-us-oil-production1 [2]

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You can see Crude Oil Production really took a dive after Dark Side of the Moon [3] . . .

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Source:
The Hubbert Peak Theory of Rock, or, Why We’re All Out of Good Songs [4]
Overthinking It, September 23rd, 2008

http://www.overthinkingit.com/2008/09/23/the-hubbert-peak-theory-of-rock-or-why-were-all-out-of-good-songs/


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2009/11/hubbert-peak-theory-of-oil-rock/

URLs in this post:

[1] Overthinking It: http://www.overthinkingit.com/2008/09/23/the-hubbert-peak-theory-of-rock-or-why-were-all-out-of-good-songs

[2] Image: http://www.ritholtz.com/blog/wp-content/uploads/2009/11/500-us-oil-production1.jpg

[3] Dark Side of the Moon: http://en.wikipedia.org/wiki/The_Dark_Side_of_the_Moon

[4] The Hubbert Peak Theory of Rock, or, Why We’re All Out of Good Songs: http://www.overthinkingit.com/2008/09/23/the-hubbert-peak-theory-of-rock-or-why-were-all-out-of-good-songs/

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