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Contrary To The IMF's Lies, The IEA Finds That Surging Oil Price Actually Will Be A "Threat To The Recovery"
Can they please at least keep their lies straight? While two months ago the IMF said that "Oil price rise not threat to global recovery", we now get an FT article with the following title: "Oil price ‘threat to recovery’" based on a quote from the IEA." H.M.M.M.M. we wonder whose opinion is more accurate: an organization run by idiots (who subsequently matriculate into modestly coherent people whose only job is to bash their former employer), whose only purpose is to destroy economies under mountains of debt (or is that the World Bank?) and to bail out insolvent PIIGS... or the International Energy Agency? We'll have to get back to you on that.
And while we contemplate this seemingly impossible task, here is what the FT says, which incidentally is alongside our views that every dollar increase in the price of oil means a couple basis points have to be removed from the 2011 GDP forecast.
High oil prices threaten to derail the fragile economic recovery among developed nations this year, the leading energy watchdog has warned, putting pressure on the Opec oil cartel to increase production.
Over the past year the oil import costs for the 34 mostly rich countries that make up the Organisation for Economic Co-operation and Development have soared by $200bn to $790bn at the end of 2010, according to an analysis by the International Energy Agency.
The increase, due to high crude prices, is equal to a loss of income of about 0.5 per cent of OECD gross domestic product, according to the IEA.
We wonder why it was barely mentioned that alongside gold it was actually crude that recorded the biggest slide today. Although in the grand scheme of things, the Fed now needs to do everything in its power to hold both of these commodities as low as possible, or else Jan Hatzius may be forced to just revise his economic forecast yet again (and start calling loudly for that elusive QE3 once more).
“Oil prices are entering a dangerous zone for the global economy,” said Fatih Birol, the IEA’s chief economist. “The oil import bills are becoming a threat to the economic recovery. This is a wake-up call to the oil consuming countries and to the oil producers.”
Oil prices have edged closer to $100 a barrel in recent weeks and Brent crude hit $95 a barrel for the first time in 27 months on Monday as the economic recovery has gathered pace.
And here's the kicker: somehow a cartel is suddenly expected to behave altruistically. So inspite of record liquidity which means speulators can push oil easily to $100+, producers are supposed to forego profits and to hike production to levels that actually result in a plunge in price, and drown the world in yet another glut of oil.
In the very short term, therefore, “it may not be a bad idea that the producers are ready to increase production and show their understanding that these high prices are not good for the global economy,” he added.
Oil consuming nations, meanwhile, need to accelerate their efforts to reduce their reliance on oil, especially for transportation, he said. According to the IEA’s analysis, the European Union has seen its import bill rise by $70bn during 2010, equal to the combined budget deficits of Greece and Portugal.
On top of the high crude prices, Europe is still to feel the full impact of higher gas prices as 75 per cent of its gas contracts are linked to oil prices. The weak euro against the US dollar will also amplify the cost.
Good luck with that. In the meantime, things are getting ugly:
The ratio of countries’ oil import bills to GDP, a key measure of the cost of oil prices on economies, is close to levels last seen during the financial crisis in 2008, Mr Birol warned.
If oil prices remain above $90/barrel for the rest of this year then the ratio for the European Union will be 2.1 per cent – close to the 2.2 per cent level it reached in 2008.
“It is a very telling story. 2010 rang the first alarm bells and 2011 price levels could bring us to the same financial crisis times that we saw in 2008,” said Mr Birol.
And the funny thing here is that according to Goldman there is a record amount of excess slack in the economy. So it must be all those Fed "asset swaps" that have no impact on inflation, and are just confusing speculators that $100 oil makes perfect sense.
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Is this the Maxine Waters thread? Saw lies....
No fucking shit. Hence the orchestrated take-down today.
Does it even matter anymore? We all know what the net result will be, regardless of their blatant SEC-approved manipulation.
orchestrated take down. Well congrats on being one of the sheeple that woke up.
I only woke up about a year ago, but I am glad I did.
Alot of people think we are doomed, but there are still great ways to make money.
I subscribe to the guy from australia and his FFT economic newsletter at http://www.forecastfortomorrow.com that guy has called many big events before they have happend, including the stock market crash in 2008 and the current financial collapse of the US. (currently happening) I found him from a friend last year, and he has some important work.
His oil calls are insane, and I have been making good money with them. He is well worth a look, if you want to keep two steps ahead of the sheeple out there.
I am worried about my financial future. Is anyone else nervous out there?
No worries. Oil is constantly made by melting of the earth's crust so we'll never run out and Bernanke can stop inflation in 15 minutes if he has too. I've never slept so well knowing all is well and good in the world.
Gold and silver are constantly made by the spewing of volcanos, ocassionally diamonds are barfed up. I don't get yer point, other than volcanoes don't bring up oil.
But getting Squirells out of office makes getting oil easier.
No shit? I'm going to Hawaii with a titanium butterfly net and get me some!
Yeah, totally. Carbon chains are constantly formed on basis of... uh...
http://mistupid.com/geology/earthcrust.htm
Oxygen 46.6%
Silicon 27.8%
Aluminum 8.1%
Iron 5.0%
Calcium 3.6%
Sodium 2.8%
Potassium 2.6%
Magnesium 2.0%
others 1.6%
FU, just cuz.
http://www.youtube.com/watch?v=6rirMIpU308&feature=related
If this keyboard would cooperate, I'd give the 3-page equation that shows you don't exist in string theory.
Here's Johnny Bravo's favourite song. You might like it
http://www.youtube.com/watch?v=VLnWf1sQkjY
Let me jizz you, baby! LOL!
I thought rising oil prices were the result of a Goldman Sucks carry trade...
Thinking out weighs miminc-ing.
http://www.youtube.com/watch?v=oyC-Ho4V_hQ&NR=1
Hasn't anyone heard? Oil producers, food producers, etc, can't take profits or else it will hurt the "economic recovery".
For some to succeed, others have to be sacrificed. Of course, this does not point to the existence of zerosum games in economy for capital assets like oil.
That is the wonderful world of the economy as thought by the US.
You people make me:
http://www.youtube.com/watch?v=cETrNUB9Aog
It's good that Tyler Durden is reading the oil threads now, and spent some time on Oil and Gas Journal as well.
This is civilization's alpha asset. There is no getting away from that and it is . . . I'll use the word forever because "forever" is not going to be much longer for civilization as a functioning entity.
Oil is in the process of taking it all down. Oil closed Dec 31, 1999 at $26.10. Think real carefully about that.
But while I mention that, I'll also point out that price is not particularly informative about oil because of the non public bilateral Chinese contracts, but oil had better damn sight get on every one's radar screen because matters associated with it will be the likely eventual cause of death of almost everyone reading these words.
And no, this is not a conservation agenda talking. If you're American, I want you to get out and burn all you can. Every drop you burn denies China a chance to catch up before the wars start.
Soon.
These comments fascinate me. Perhaps they hold truth, perhaps they do not.
Cooter
reduced delay discounting is associated with immediate rewards. usually characteristic of of people with low working memory capacity, there are in fact benefits.
finite resources are a limitation of the physical world.
housing bubbles press forward finite resource use locally.
who cares if you run out of gas after you cross the finish line?
he has a deep, albeit partially valid (timing is everything... and humanity is not there yet), point.
Standing, Clapping.... Excellent
Energy and Human Evolution
1995
http://dieoff.org/page137.htm
As if the US needed to change course. It's been a while since the US has taken the path of depletion of resources.
That's absolutely no idea of sustainability in the US ideology. No tomorrows. The big game of consumption where finite resources have to be burned to prevent others from consuming. That's the perfect US capitalistic allocation of resources.
So bored with the lack of eruditation here:
http://www.youtube.com/watch?v=ZfVJSLC3lO8
Don't spank me, Mommy, for that sp error, please!
This is one of these really weird stories that resonates with...............................................I have no idea? Those of us who are mere mortals, who pump our own gas, already know about the damage being done to our already damaged economy. I, for one, do not need Joe Batapaglia to tell me that dollars flowing into oil companies for the mundane privilege of keeping the car moving...WILL HURT RETAIL SALES. It is a funny thing about me that I do not wait for the Blow Horn [CNBC] to tell me these things. I, for example, know that the Street is selling as of today...at least in part to the oil conundrum.
But these facts create opportunity, of course....to short oil and the world's largest petroshrimp maker [while members of the criminal syndicate known as Wall Street bend over backwards with reasons to buy the petroshrimp maker for reasons that are truly lost on me]...plus get all giddy with joy on the Blow Horn talking about how great $100 oil is.
So let me recommend that everyone struggling with these issues just go ahead and eat a common sense pill already...and short oil because it is priced for stupid [in this case meaning it is priced in an economy that cannot support it...which means it will fall.]
Duh.
http://www.youtube.com/watch?v=WANNqr-vcx0
Fucking loser junks my ass? Well, junk you, mofo!
Grace Slick hater!
It was meant as a piece offering, but I see now you are just a troll.
I post my bs trades, what do you do? Sit back in your mommas chair and critique?
Loser.
You seem to have some sort of fetish for female vocalists. Try this on for size, if you think you can "handle" it.
http://www.youtube.com/watch?v=nlZkUUX7rCE&feature=related
And the next time you post a Blondie video, try one from CBGB.
http://www.youtube.com/watch?v=Nid_Ou9N0bk&feature=related
Fukker can't post, just junk.
This is it, mofos:
http://www.youtube.com/watch?v=f5UgimK3vrI
>>
In the very short term, therefore, “it may not be a bad idea that the producers are ready to increase production and show their understanding that these high prices are not good for the global economy,” he added.
>>
The perpetual mindset again on display.
Suppose those producers are ready to increase oil production -- and discover they can't. Or already know they can't. It's such an easy thing to envision, but it's so terrifying that no one in the organizations will ever dare say it.
Maybe. Just maybe, Saudi Arabia is pumping flat out right now.
"Maybe. Just maybe, Saudi Arabia is pumping flat out right now."
Maybe It Died
Ghawar Is Dying
http://www.newcolonist.com/ghawar.html
we wouldn't be drilling 13,000' down if KSA had significant slack capacity. PBR wouldn't care about a reserve under 2 miles of ocean and 3 miles of rock if there were a crude glut.
Nobody would be doing any of this
You know, Trav, I think I see an invasion of Venezuela in our not too distant future.
if someone else breaks our stranglehold on refining capacity for that taffy shit they call "crude," then quite possibly.
Additional refining is fine so long as there is a supply glut of this stuff and we have a bottleneck, but once it comes to a choice between shipping it to China or to us, we're going to have to remind them who has a blue water navy and which hemisphere we are in. VEN isn't even on their ocean, shipping lanes to China for this are indefensible.
Walked away for a few hours and I see people below babbling their usual crap about new currencies and even some bright guys noting that higher price just shuts down demand -- AS IF THAT IS A GOOD THING WHEN THAT DEMAND FEEDS THEM.
The API rating on Orinoco taffy -- well, no point in discussing it. That oil goes to Texas where it can be refined. Let's make sure folks understand this. You don't take crude oil and pour it in your gas tank. It has to be refined and crude oil comes in flavors from thick to thin, from low sulphur to high. Not all refineries can handle all types.
Suncor up in Canada turns tarsands (they want it called oilsands but meh)into proper product for use by the transportation infrastructure and they do it at about 300K barrels per day (with more production coming).
That ain't happening in Venezuela. Not now. Not soon. And that is the equation sports fans, because if it's not soon, it's not ever. Time is running out. This is why all the hand waving about solutions and alternative energy fails. That stuff needs decades. We don't have decades before we run short. (Not out. Short. Short kills.)
Wars are coming over this stuff. My favorite off the radar screen place to watch is the Senkaku Islands. Japan firmly believes they got nuked because their oddball geology blessed them with NO COAL, NO OIL and NO NATGAS. Now that it looks like they finally have something, China is trying to take it.
The whole world has underestimated Japanese rage over this. They WILL go to war over that, and the US won't make them go alone and get rolled over.
Japan is not going to start any wars. They are in a very weak position and they have no nukes. To go to war with China, you need to have nukes pointed right at them.
Haven't you heard? Japan is the largest importer of Chinese rare earths. It it essential to their economy. Without Chinese rare earths, the Toyota Prius wouldn't exist.
Oh we will have a war with China over oil. But Japan wouldn't be in the picture. When oil trades at $200 a barrel in a few years, and the economy tanks for the second time, it will not be pretty. We will ELECT a president that will have the balls to launch the ICMBs in our submarines and wipe out most of China's coastal cities within 15 minutes.
George Orwell
Lets take a step back in time.
Global Credit and the IMF Short-term Liquidity Plan - 2008
http://www.istockanalyst.com/article/viewarticle/articleid/2758331
IMF and Fed plan bailouts for emerging markets -2008 http://www.risk.net/risk-magazine/news/1517979/imf-fed-plan-bailouts-emerging-marketshttp://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2106/
This is the Big Picture folks
Bring on $150/bl oil prices so we can begin coining our own currency by the termination of the Federal Reserve.
If you ...
(1) have the money to burn for a book
(2) find consise, accurate reference material fascinating
(3) can't enumerate in more than 20 ways how oil defines your existence versus 100 years ago
... then get a copy of "Oil 101" by Downey. Skim it and read the things of interest. More importantly, use it as reference when folks talk shit on ZH.
Modern society depends on oil, but the how matters more.
Cooter
Oops, forgot this link. Pick your poison to review.
Slides from IMF-World bank-26 may 2010-Telafi.ppt
http://www.slidefinder.net/I/IMF_World_20bank_20may_202010/22312391
i ♥ peak oil
That's right. They Can't print it into existence.
“it may not be a bad idea that the producers are ready to increase production and show their understanding that these high prices are not good for the global economy,”
And a collective silence spread as they shuffled their feet, wrung their hands, and looked around at each other....
How the proles are conditioned thru special interest published studies and illegal substances used during contrived writings.
Part 2: Macroeconomic Impacts
1. Trade Balance
2. Capital Expenditures
3. Employment
4. Health and Environment
5. Greenhouse Gas Emissions
6. Government Policy
Electric vehicles in the United States: A new model with forecasts to 2030
Just keep watching Dancing with the Stars. If you have been a wandering fool, you need to wake up. Buy get-a-way land. Think survival for your family. Gold, Silver is great , but place to avoid the Riff-Raff is a must. A good survival Blog.
http://www.survival-spot.com/survival-blog/how-to-clean-a-squirrel-skinn...
be smart...
I have been in the energy business for many years, and the idea that higher energy prices could benefit anyone besides energy companies is absurd.
Do you mean that all the talk about hard work, innovation, deflative growth brought up by the capitalists was just that, talks?
Oil was used to bring us where we are, a massively polarized world, with near free energy for some and horrendously expensive/unavailable for others.
Oil is the drug in the IV line for the supply side. It is also the drug in the IV line for the war machine.
It's pricing and availability can be "claimed" by .gov in the name of national interest long before Au/Ag meet the same fate.
They can and will take it to 140-150, squeeze the middle into a deeper begging bowl position wrt to .gov dependence and then it won't matter anymore.
If you cannot see the three letter word a-coming, I suggest you take off your rose coloured glasses.
There are, fortunately, alternatives and I'm not talking about the Prius or the leaf or heaven help us, the Volt.
ORI
http://aadivaahan.wordpress.com/2010/12/31/a-big-part-of-what-this-here-...
With the meaningful addendum that some have to increase their consumption just for the sake of furthering the polarization.
True.
How will Arabia majikaly ramp production? Do they have an oil genie? What if production has peaked? Can we all fly on magic carpets yet?
From theoildrum.com
Oil production has been flat for a decade, check out this:
http://www.theoildrum.com/files/Oil%20production%20vs%20price%20v3.png
Oil going up is big. If oil unhinges from the USD it's tits up
One barrel of oil is the equivalent of 2500 work hours of one human being. Just contemplate that for a moment. Oil is all that matters in the industrialized world. Net energy guys, we are screwed.
based on what? food production?
too many variables
justify that number.
the man brings up a real point -- you are the ignorant one. justify yourself first.
Is that how it works ther Doc? You pronounce a judgment from on high and all supplicants must prove the validity of their question. Perhaps a change of avatar is in the offing?
Maybe on the definition of work. Who knows?
Actually its 25000 hours http://europe.theoildrum.com/node/4315
This has been argued and debated often on TOD, mainly in response to some of my own quotes in media about 1 barrel equating to 25,000 hours of human labour (12.5 years at 40 hours per week). Ultimately the answer to this question depends highly on assumptions - but we can arrive at a good approximation. 1 barrel equates to 6.1 Gigajoules (5.8 million BTUs). Depending on the 'job', humans use roughly 100-700 Kilocalories per hour (Computer work requires an estimated 119.3 Kcals/hr). 1 kilocalorie (Kcal) = 4,184 joules. So 1 barrel of oil has 6.1 billion/4,184 = 1,454,459 kcals. Using a range of 100-700 kcals per human hour of work then results in a range 2078 and 14544 hours per barrel of oil. At 2000 hours per year (40*50), this is would then be 1.0-7.25 years per barrel. This was discussed in the comment thread here.
Good god! Be careful or you will confuse the cornucopians here with this kind of analysis!
Yes, it is a tricky calculation. I like to conservatively use ~$27,000 per barrel in human labor equivalent at the prevailing US minimum wage. Even at a wage of $0.25 per hour, it corresponds to value of at least $500 per barrel. This is the reason why emerging economies will be able to bid for oil at high prices because they are still levering that value into real economic gain and not just motoring to Walmart in oversized SUVs.
As much as it may or may not hurt us it has to be putting a crimp on the PIIGS. Along with all the other reasons, a lot of tax revenue is based on gas taxes.
yoyo dr dre in the house. the original peak oil gansta - that is pog to you. My bro matty simmons called it - a cup of gas can pull a family of 4 and a 2-ton SUV for about a mile. Thats a lot of calories. The energy density of oil is off the charts. The bad news is its everywhere - shipping, plastics, etc. As it gets mad-pricey our existence will start to become hyper-inflationary until we hit breakpoints and get into alternatives. the alternatives dont have the energy density but will be affordable. money to be made before the end of the world though. happy trading my bros.
With a $500 billion investment in Solar and Wind and new power grid infrastructure as well as heavy incentives to go battery tech, we could eradicate most of the need to pay the Arabs, the Venezuelans, the Iranians (indirect) etc etc.
Problem is that we have corrupt losers in Washington controlled by you guessed it...again a few thousand CEOs and lobbyists... how pathetic.
(Don't take it from the military, they're really busy...got to make them porn movies you see)
Solar voltaic is made from petroleum products, we do not have the technology to produce battery power sufficient to mitigate oil. Washington may be inept, but it is not because of any lack of investment.
Stop talking sense.
You may want to read this and reconsider "the intent" of your statement, there are other ways to store power than using batteries.
http://en.wikipedia.org/wiki/Flywheel_energy_storage
There are several large projects in the commissioning phase, they still need a little more time to see if the "tech is truly mature" for "prime time"... but it looks good.
Madhouse, you are missing the point, look up net energy or eroei, that is what matters. Furthermore we, europeans, are fucked because we have huge taxes on energy, so the chinese will be able to aford it even at 150$ barrel of oil, for us it will be 300$ due to high taxes, vat, road tax, fuck you tax, piigs tax, merkel tax, etc.
And its not just solar panels that are made using oil, its fertilizer, plastics, drugs, computer chips, evertything has oil in it even if it doesnt per se.
If peak oil is real, which it looks like, the implications are huge
Sure. Let's just keep paying for 16 year old Saudi princes' Ferarris while their fathers write checks to their favorite radical terror groups, Houston parties and the country is blanketed in mercury ridden coal dust. Sure, any one else want to take that up their ass for the rest of their lives ?
Meanwhile the technology is either there or just around the corner with a few smart Manhattan projects.
http://blogs.reuters.com/environment/2010/12/28/chinas-trina-solar-launches-800-million-expansion-as-spectrawatt-sputters/
Point being that the loser mentality is deeply ingrained in the U.S. We waste at least half of our defense budget and it can be going to investments similar to those that the Chinese are making in their economy. Take energy consumption and divide it by the cost of per watt alternative generation and yoo will get close to the $500 billion mark.
Funny how we can piss that that amount of money away to bail the banks and on insane wars in a couple of years... but any talk of real change is immediately dismissed...
Gas will be near $5 this year as most secretly fear. So now the Prince will get a Bentley too. How wonderful. Petroleum for manufacturing etc will continue to be satisfied by domestic and friendly country imports. I am talking about the lions share... and do it ASAP.
Just venting here.... it will never happen of course.. but not because it couldn't... it is simply the gravity of the spiral of destruction..
Shit, was it 41 years ago that we put men on the moon.... fading....
That sir, is the way oil takes it all down.
Everything is defunded because food transport requires all the money and focus and commitment the human race can muster.
And that means mankind's pinnacle achievements are likely behind us.
Forever.
Wait until Chinas heavily invested new refineries in Venezuela come online this year or next...currently only US refineries can process their heavy crude. Then venezuela will shift exports from the US to China. Venezuela is one of biggest US suppliers. China will be in a position to outbid us for oil (they already are) To exacerbate the problem, US will print more money thus driving up the price of oil further.China has a no strings attached attitude when it comes to procurement of resources...its seen everywhere from Africa to Latin america. Interesting times indeed.
their refineries just give VEN another customer - they won't be able to refine all of the taffy coming out of VEN.
If this comes to problems, those refineries will get Stux'd
It feels sooooo good shorting gold.
Cash money has never been so simple.
The powers that be want lower PM's...short it.
the last consolidation phase lasted some 6 months...people would be wise to avoid expecting perpetual one-way price action
it's a good thing that the ME is doing such great things with their oil bounty. You know, like we did, inventing nearly everything single thing people use in the world.
Oh wait, no, the Saudis just bang out children and pray to their rock god
Hard for them to perform such a trick when they can not reserve their resources for themselves and have to deliver to people in charge of innovating in the US.
Sheer luck the world does not breed more of the US type inventors whose only capability is to add to the pool of consumption.
The slope is already sleep down. More US innovation style and that is a free fall.
plus ça change
http://www.elitetrader.com/vb/showthread.php?threadid=171421
http://oilgeopolitics.net/Financial_Tsunami/Oil_Speculation_II/oil_speculation_ii.html
The real cartel for price inflation, like back in 2008, is not in production but in the Squidplex’ speculator's pit...How much of each barrel sold ends up in their tentacles? 25%? 30%?
http://www.huffingtonpost.com/raymond-j-learsy/oil-over-90barrel--time-t_b_801451.html
[snip]:
All of which sounds very impressive. But, then again, not if you turn back the clock. Mr. Gensler has had much more than 145 days to deal with this issue. On July 27, 2009, the Wall Street Journal blazoned a headline that, "Traders Blamed For Oil Spike," advising that the CFTC was to issue a report next month "suggesting speculators played a significant role in driving wild price swings in oil prices." We are still waiting.
Also in July 2009, the CFTC announced it was considering volume limits on energy futures by financial/proprietary traders and tougher information requirements. That wasn't 148 days ago, that was nearly 500 days ago, and now they want even more time. Or to quote Gensler once again, "It's just appropriate to let this one ripen a little more," and all the while "it" is ripening we are paying through the nose.
And who has access to the CFTC while the issue is "ripening a little more"? A plethora of industry lobbyists such as the CME Group Inc., the world's largest futures/derivatives trading platform pushing the CFTC to defer setting limits, and Gensler's professional alma mater, Goldman Sachs. A Forbes article on April 13, 2009, "Did Goldman Goose Oil?" hypothesized that Goldman played a key role in the massive short squeeze on Semgroup Holdings, whose oil positions amounted to 20 percent of the nation's crude oil inventories. The squeeze itself was deemed to have a dramatic impact on the price of oil leading up to the $147/barrel on July 12, 2008. Semgroup Holdings filed for bankruptcy on July 22, 2008. And the likes of the Vitol Group, the oil trading behemoth that in August 2008 held oil contracts equal to 57.7 million barrels, according to the CFTC. At the time, according to the Washington Post ("A Few Speculators Dominate Vast Market For Oil Trading") the CFTC also determined that a massive amount of oil trading activity was concentrated with a handful of speculators, and at that time alone 81 percent of the NYMEX was held by financial firms speculating for their clients or for their own account -- seemingly not enough to light a fire under Mr. Gensler nor the CFTC to do the needful, setting trading limits in place post haste. Clearly letting themselves be stonewalled by industry lobbyists was a greater priority than bringing transparency and constructive limits to what by then had clearly become a trading racket, leaving the nation's consumers to stake the chips of the financial casino high rollers.
Meanwhile the economy staggers under indefensibly high prices while our CFTC Commissioners delays and delays, running out the clock to a gullible Congress and Department of Energy. Two commissioners, Scott O'Malia and Michael Dunn, have already advised that though they are "voting in favor of publishing the rule for public comment that they may not ultimately support imposing position limits." We need more public servants like that?
There seems to be but one forthright voice on the Commission -- Mr. Bart Chilton, who earlier this month, stated that the CFTC is "facing pressure from inside and outside the agency" to find a way around the implementation deadlines. "First we have no legal authority to do so. Second that is exactly the type of dancing on the head of a legal pin Washington-speak that folks in the country are tired of -- and they should be."
Was it Chilton's announcement today that could send oil down precipitously if the Squid's positions are forced to unwind?
http://www.zerohedge.com/article/bart-chilton-suddenly-board-cftcs-posit...
Anyone care to speculate? lol
Today was the Central bank coordinated response to biflation.
The heat in the kitchen was getting too hot. Despite all their numbers showing there's 'no signs of inflation' and 'diminished risk of deflation' the notion that everything you own and earn is deflating and everything you need is inflating has gone viral. And throughout the world the inflation genie is coming out of the bottle. Boards throughout the world have espoused these terms despite the hand wringing that 'this isn't supposed to happen!!!' We here at ZH started the wave.
The first attempt was Ben's blatant PR move on 60-Minutes. He was unconvincing. But it revealed that he realized there was a problem. Today was an attempt to thread the needle: a coordinated takedown to prick the commodities run up and yet a clear message via the FOMC minutes that the punch bowl is not being taken away.
So this gives them at best a temporary reprieve. They're caught in a Catch 22, the zone that exists between the pit of man's fears and the summit of his imagination. This is an area known as The Twilight Zone. They can't raise, yet they can't cut. They can stoke inflation, yet costs can't be passed on to a depressed consumer, killing corporate margins. They can't stand still either or risk proving that the downturn was indeed not cyclical, but a structural downsizing. They want to pump the stock market yet the side effect is speculation. This and many more conundrums make up the current lay of the land. And that, friends, shows the inherent vulnerability of the situation: another shock could come in the form of the economy heating up with incipient inflation, or it could come if the real economy (not the paper one) doesn't pick up enough and provokes a top in the business cycle.
Brave Ben must navigate the treacherous waters that make this his own personal Odyssey.
Good old "American Exceptionalism" ... if you can't buy it then steal it.
The US has grown in the best extorter of the weak, the best farmer of the poor in man's history...