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The Curious Case Of Post-QE Oil Hangovers

Tyler Durden's picture




 

In a strange centrally-planned 'see-it's-only-transitory' trick, crude oil prices have suffered a significant post-coital hangover each time the Fed has engaged its QE-warp drive. As the following chart shows, the current swing lower is ahead of pace compared to the previous two 'schemes' which stopped dropping after 10 days (QE2) and 20 days (QE1). It's almost as if someone wanted to prove that extreme monetary policy does indeed have no inflationary impact on the price of energy - or perhaps its just an over-crowded and obvious pre-QE trade coming undone in a hurry (like stocks?)

Pre- and Post-QE performance of WTI Crude (normalized to 100 on day of announcement)...

 

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Wed, 09/19/2012 - 14:27 | 2812119 Stackers
Stackers's picture

Oil is dropping, but last time I checked gasoline is still up at all time highs. Yep, still $4/gal

Wed, 09/19/2012 - 14:29 | 2812139 Chris Jusset
Chris Jusset's picture

Since Bernanke now controls a majority of the US economy, we should ask him what it all means?

Wed, 09/19/2012 - 14:42 | 2812179 CvlDobd
CvlDobd's picture

It just means he is very generous!

Truth - Something somehow discreditable to someone.
- Mencken

Wed, 09/19/2012 - 14:44 | 2812228 Hype Alert
Hype Alert's picture

It means he wants his new boss the same as his old boss.  And he wants to keep his job.

 

Too bad his role in the history books though.

Wed, 09/19/2012 - 14:55 | 2812281 mtkd
mtkd's picture

It will be 50 years or more before the history books can write about Ben with any context.

By then he could be seen as a hero for architecting viable soft landings after massive credit expansion periods.

Recessions of the future may come to be known as Ben Corrections.

Wed, 09/19/2012 - 15:16 | 2812390 icanhasbailout
icanhasbailout's picture

demand destruction, bitchez

Wed, 09/19/2012 - 17:17 | 2812910 Pure Evil
Pure Evil's picture

In 50 years nobody will give a crap because it will be the land of Dumb & Dumber.

Idiocracy, the movie, explains all.

Wed, 09/19/2012 - 14:55 | 2812285 GetZeeGold
GetZeeGold's picture

 

 

It means you'd better get short crude......we need $1.80 gas by election time.

 

Wed, 09/19/2012 - 16:47 | 2812584 LMAOLORI
LMAOLORI's picture

 

 

His role in the history books should be comparable to other failed Socialists he aided the implementation of a welfare state both at the top and the bottom of society.

Forbes: Richest 400 Americans' Net Worth Jumps 13 Percent to $1.7 Trillion

snip (more at link)

The net worth of the richest Americans grew by 13 percent in the past year to $1.7 trillion, Forbes magazine said on Wednesday, and a familiar cast of characters once again populated the top of the magazine's annual list of the U.S. uber-elite, including Bill Gates, Warren Buffett, Larry Ellison and the Koch brothers.

 

8,786,049: Yet Another Record for Americans Collecting Disability

 

Record 46 Million Americans Are on Food Stamps

 

USA Economic Freedom Ranking: From 3rd in the world to 18th in a decade

Political you betcha $$$$ 

Who's better for stocks: Obama or Romney?

 

 

 

 


Wed, 09/19/2012 - 15:30 | 2812456 trebuchet
trebuchet's picture

Tyler, 

Surely you are not suggesting the Oil market is manipulated????

NO WAY!!!!!

Its like saying the banks fix interest rates in the interbank lending market!

Things like that don't happen in a free market economy, especially when banks are allowed to trade for profit as well as on behalf of clients... they would kill each other to compete the profits away, right?

Wed, 09/19/2012 - 16:28 | 2812699 NewWorldOrange
NewWorldOrange's picture

It's ALL manipulated. "It's almost as if someone wanted to prove that extreme monetary policy does indeed have no inflationary impact on the price of energy"

That applies to almost every bit of economic news that's come out for at least months now. EXACTLY THE REVERSE of what normally happens and that reason would tell you should happen. Negative feedback mechanisms that restore balance and equilibrium to dampen excesses have been turned on their head.

Next up: Structural engineers, paid by the Fed, decide to design suspension bridges so that passing air currents increase dangerous swaying. Cuz we need more broken windows and broken bridges. Stimulates the economy. And makes for AWESOME footage!

http://www.youtube.com/watch?v=P0Fi1VcbpAI

Can there be any doubt TPTB would LOVE to start a bunch of major wars right now?

1) It's the opposite of what's rationale

2) It allows them to easily establish a TOTAL police state and save themselves from tar and feathers

3) Gives them an excuse and distraction for what they've done

4) Allows them to detain, kill, whatever, the people who know what's really happened and are telling it like it is

5) War "gets us out of a recession" (broken window fallacy.)

World War III is coming real soon.

"Billions and billions..."

Wed, 09/19/2012 - 15:32 | 2812465 geewhiz190
geewhiz190's picture

it means the refiners and marketers will make a fortune. now we know why Buffett bought phillips 66. i guess he got the word from the saudis a few months ago

Wed, 09/19/2012 - 16:48 | 2812732 LMAOLORI
LMAOLORI's picture

 

 

It pays really well being a crony capitalist like warren bailed out buffet or soro's they are speculating on the destruction of the dollar. As for the Saudi's nah they wouldn't interfere in our election to help obama would they? I am sure they are just concerned about Americans (sarc)

 

Saudis Offer Extra Oil to Control Prices

 

Wed, 09/19/2012 - 15:29 | 2812452 Hohum
Hohum's picture

Stackers,

You're proof positive of addiction to cheap gasoline.  If you go back to 1999, oil has increased 9X, gasoline maybe 5X--be happy.

Also, oil stockpiles high, gasoline and diesel not so much.  Finally, the drop happened over three days so far--be patient.

Wed, 09/19/2012 - 15:41 | 2812521 SeattleBruce
SeattleBruce's picture

Stackers - look for gasoline prices to drop in 3, 2, 1 - just before the election!  We've been saved by Obamney!

Wed, 09/19/2012 - 16:29 | 2812733 larz
larz's picture

I feel compelled to repeat that the gas station owners and operators do not benefit from that 'spread' they are the little people its politicians (taxes) and BP Amaco etal that are the criminals

Wed, 09/19/2012 - 14:28 | 2812129 Flakmeister
Flakmeister's picture

Buy the cash flows and forget the price

PBT, COSWF, SBR, etc....

Wed, 09/19/2012 - 14:28 | 2812131 agent default
agent default's picture

I think we are coming to the point where the market no longer responds to monetary policy, no matter how loose or silly it gets.  I am not sure what the implications of this could be.

Wed, 09/19/2012 - 15:32 | 2812466 Seer
Seer's picture

"the market no longer responds to monetary policy"

What They call the "market" does, but that's not the market now is it?

Nothing is REAL anymore.  The REAL has been hypothecated away, welcome to the world of the virtual; long live the VIRTUAL! (the man behind the curtain: Edward Bernays)

Wed, 09/19/2012 - 14:28 | 2812132 Deep79
Deep79's picture

Or maybe with all the QE priced in, we are slowly going back to fundamentals

Oil should be around 70 then

 

Wed, 09/19/2012 - 14:33 | 2812163 fonzannoon
fonzannoon's picture

how do u price in infinity?

Wed, 09/19/2012 - 14:44 | 2812227 Deep79
Deep79's picture

well its only 480 billion a year, not that much if you ask me. Ya I would have said are you crazy a few years ago, but we now throw trillions around like its nothing.

we will get back to actaully to focusing on data.

FED made huge mistake IMO, why now? when we are correcting 10-20%, then save it, now when we correct 10-20%, what are they gonna do. I am actually still in shock the FED did it.

 

Wed, 09/19/2012 - 14:46 | 2812232 fonzannoon
fonzannoon's picture

then u will be more shocked when the data gets worse and their response is to do more.

Wed, 09/19/2012 - 14:50 | 2812256 Deep79
Deep79's picture

typical ZH answer, no thought just say they gonna print more

They keep printing, the bond market crashes, then GAME OVER

 

Wed, 09/19/2012 - 14:54 | 2812279 PiratePawpaw
PiratePawpaw's picture

That would be a better retort if they didnt keep printing more. Just sayin.

Wed, 09/19/2012 - 14:55 | 2812291 gjp
gjp's picture

Why would the bond market crash?  They are the ones buying all the bonds?  What's to stop them from monetizing everything?  Clearly scruples won't do it.

The risk to endless printing is to the currency, not to the bonds.  And they don't seem to give a rat's ass about long-term risk to the currency.  Something about all being dead in the long-run.  But with this kind of recklessness, the long run may be a lot shorter than they think.

Wed, 09/19/2012 - 14:59 | 2812310 Deep79
Deep79's picture

We have massive creditors (CHINA)

You think they will let that happen, the FED will buy all the bonds, that is a ZH fantasy.

Yes, currency would collapse, as well as Bonds.

 

Wed, 09/19/2012 - 15:03 | 2812333 fonzannoon
fonzannoon's picture

China has been buying gold hand over fist. They will make through the other side of our bond market collapse. We will have some bigger issues. By the way that guy Gundlach even said TODAY he is planning on the fed owning 100% of treasuries. So lump him in with us? At least I am in with good company....

 

Wed, 09/19/2012 - 15:47 | 2812542 Urban Redneck
Urban Redneck's picture

China hasn't bought additional bonds with its increasing foreign currency reserves since hell froze over several years ago.  Just rolling the maturities doesn't help cover the debt of this year's budgetless spending orgy in Washington.

Wed, 09/19/2012 - 16:00 | 2812623 LMAOLORI
LMAOLORI's picture

 

 

China still lead buyer of U.S. securities

September 18, 2012

snip

Global demand for U.S. securities is still strong, with China remaining the largest foreign holder of U.S. debt, according to the Treasury Department's latest report on foreign holdings.

The U.S. government's top international creditor continued to add to its holdings, albeit modestly, according to the July Treasury International Capital report, which measures the flow of funds into and out of U.S. securities, including Treasuries, agency-backed securities, corporate debt and stocks, as well as banking capital flows.

In July, Chinese investors increased their holdings by $2.6 billion to $1.15 trillion.

more http://buzz.money.cnn.com/2012/09/18/china-us-debt-tic/?iid=HP_River

Wed, 09/19/2012 - 18:01 | 2813049 socalbeach
socalbeach's picture

That's about a 0.23% increase in their bond holdings in July lol.

100 * 2.6 / (1150-2.6)

Wed, 09/19/2012 - 18:37 | 2813180 Urban Redneck
Urban Redneck's picture

Propaganda for masses  vs.  Hard Numbers

 

September 2010 - Chinese UST Holdings 1151.9B

June 2012 (Most Recent Comp) -   Chinese UST Holdings 1147.0B

Net US Treasury Holding Change -0.4%

http://www.treasury.gov/resource-center/data-chart-center/tic/Pages/inde...

September 2010 - Chinese F/X Reserves (ex. gold) 24542.75B

June 2012 - Chinese F/X Reserves (ex. gold)  32400.05B

Net F/X Reserves Change  +32.0%

http://www.pbc.gov.cn/publish/html/2010s09.htm

http://www.pbc.gov.cn/publish/html/2012s09.htm

 

Wed, 09/19/2012 - 15:58 | 2812614 Panafrican Funk...
Panafrican Funktron Robot's picture

"You think they will let that happen, the FED will buy all the bonds, that is a ZH fantasy."

#1 buyer of US bonds:  The Fed.  This is an actual, present reality, good sir.

Wed, 09/19/2012 - 16:24 | 2812719 Seer
Seer's picture

This is Last Man Standing!

China WILL stop buying US Treasuries for sure: that which cannot continue forever won't- duh.  Growth is dead, in which case China WON'T have the bandwidth to continue this game.

How it is currently going down, if it's not already obvious, is the US is still winning by outlasting all the other plummeting nations.  The US is orchestrating a collapse of competing currencies (China's will never really get off the ground in this regard, not after we see its emperor is naked [refer to recent article about the missing collateral in China (iron)]).

Alas, being the best looking horse at the glue factory really isn't anything to brag about...

All stated, the reality is that the US, ignoring the paper stuff, has a greater array of physical (natural) resources than any other country.  If it all goes isolationist the US will be the best place to be (as long as people can adjust to a reduction in their outlandish levels of consumption).

Wed, 09/19/2012 - 14:58 | 2812306 fonzannoon
fonzannoon's picture

Dude have they proved the "typical zh answer" wrong yet? Someone is excercising a lack of thought here and it's not me.

It's not even deep thought it's pretty goddamn simple....

Have you considered what the fed is going to do when twist stops in December by the way? You think they won't fill that void with more LSAP?

Wed, 09/19/2012 - 15:03 | 2812331 Deep79
Deep79's picture

I have no idea, and ti claim that you do is wrong.

The mantra here is print, print, print,

I dont buy it. Bonds will colapse long before that.

 

Wed, 09/19/2012 - 15:05 | 2812342 fonzannoon
fonzannoon's picture

What is the mantra at the fed meetings? Maybe bonds do collapse long before that. I just checked my tax return and my carry forward losses remind me that I thought he bond market would have collapsed already....

Wed, 09/19/2012 - 15:11 | 2812371 Deep79
Deep79's picture

thats funny about tax return joke.

But I suspect FED knows we are going down hard, wheather they come in or not, they might have saved markets for a few months, and when debt ceiling talk heats up and fiscal cliff talk heats up, we go down hard and FED and everyone ele blaims congress.

FED is left in clear, saying they did everything they could, even QE3 in september, blame Congress

Wed, 09/19/2012 - 15:17 | 2812398 fonzannoon
fonzannoon's picture

the next move regarding the debt ceiling will be to finally eliminate it. just my opinion.

Wed, 09/19/2012 - 16:01 | 2812626 Panafrican Funk...
Panafrican Funktron Robot's picture

Financial repression is the entire game.  There is no other play for them.  Do you understand that a 10 year even touching 2% is a problem?

Wed, 09/19/2012 - 15:14 | 2812374 malikai
malikai's picture

Q: Why will they print?

A: Because the math doesn't give a shit about what any of us thinks they should do or what should happen.

I too did not expect it, but we all knew it would happen. Sooner or later.

Wed, 09/19/2012 - 16:37 | 2812766 Seer
Seer's picture

"I have no idea"

"ti [sic] claim that you do is wrong"

"Bonds will colapse long before that."

I'm confused, you say you have no idea yet you then give an idea...

You've got to base your "idea" on something.  Keep in mind that this isn't any "normal" going on here.

Wed, 09/19/2012 - 14:46 | 2812233 qussl3
qussl3's picture

Open ended != Infinity.

If its about the flow not stock then Infinity only matters when the purchases are open ended in size per time period.

Wed, 09/19/2012 - 15:21 | 2812400 JuliaS
JuliaS's picture

Titanic was open ended. The bottom end just opened right up when it hit the iceberg.

... to this day it sits in many open-ended pieces somewhere at the bottom of the ocean.

Wed, 09/19/2012 - 16:49 | 2812816 Seer
Seer's picture

The "End!"

Wed, 09/19/2012 - 15:35 | 2812489 trebuchet
trebuchet's picture

QEternity is a flow variable, so even if it is around forever, banks will just write more mortgages. 

Aset rotation in the great "Monetary Transmission Mechanisms" that the world economy has come to believe are the arteries of the modern economy.

Garbage in, Garbage out... doesnt matter if its all CB/banking accounting numbers shifting from one persons balance sheets to another, doesnt change the number of loaves you are gonna buy today or tomorrow, only at the margin, for the time being. 

Look beyond to the system, the world is still there. Last time i checked, the ~REAL economy was still getting by. 

 

 

 

Wed, 09/19/2012 - 16:34 | 2812754 MeelionDollerBogus
MeelionDollerBogus's picture

calculus, limits, integrals (volume, at times)

Wed, 09/19/2012 - 15:05 | 2812311 CrashisOptimistic
CrashisOptimistic's picture

"Or maybe with all the QE priced in, we are slowly going back to fundamentals

Oil should be around 70 then"

 

Old normal thinking.  So the process of slowly going back to fundamentals had, what, a few thousand all reach the same conclusion in 10 milliseconds on Monday and with 104 contracts traded in 30 seconds before the event, then had 14,200 contracts traded the next few seconds driving oil down $5-- because all those folks slowly got back to fundamentals and they all reached that decision in 2 seconds of time?

The correct thinking is oil's price is being lowered by decree.  There is no free market, and if there was one of a magnitude to oppose the decree, the relevant people would be arrested.

The world has changed.  It's not what we grew up in.  There is no capitalism.  There is no socialism.  The world teeters on oblivion and governments will stop at nothing, certainly not at oil market corruption, to keep the wheels turning.

Wed, 09/19/2012 - 16:03 | 2812477 JuliaS
JuliaS's picture

Inflation - prices rising faster than wages.

Deflation - wages falling faster than prices.

Unless you're a central bank, to you it's all the same. Heads - they win. Tails - you loose.

Oil has been getting more expensive even as it fell from the $147 peak. More people could afford it back then, when houses still functioned like giant ATM's than today, when it's hovers around $100/barrel. The whole reason the price fell was because fewer could afford to drive or had places to commute to. Oil's getting more expensive even on the way down.

Wed, 09/19/2012 - 16:03 | 2812642 Panafrican Funk...
Panafrican Funktron Robot's picture

This is an important point.  There is no good outcome for us plebs either way.  

Wed, 09/19/2012 - 17:42 | 2812992 CrashisOptimistic
CrashisOptimistic's picture

If you price a barrel of oil in the BTUs required to build a deep sea oil rig, fuel its engines to power itself to the drilling locale, then fuel the helicopters that transport the drilling crew to the platform (did you know the proposed Brazil drilling sites are so far out the helicopters have to do aerial refueling?) then you are spending closer and close the number of BTUs to get the barrel out of the ground as is in that barrel.

Believe it, folks, the BTU deficit unfolding is FAR more powerful in "affordability" than any monetary or fiscal realities.

Wed, 09/19/2012 - 16:58 | 2812848 Seer
Seer's picture

"More people could afford it back then"

Yup, that's the word I've been stressing for years, "affordability."  The numbers don't matter, whether "high" or "low," what matters is whether the number is affordable. (low number and out of work = not good; high number and marginally employed = not good)

Wed, 09/19/2012 - 17:11 | 2812880 JuliaS
JuliaS's picture

Numbers cease to be important when they quit reflecting reality. For that reason I like analysts such as Mike Maloney who structure systems in relative terms - pricing commodies against commodities, ignoring fiat all together. Although I disagree with some of Mike's picks and find self-contradictions in his theories, I do respect the methodology.

Wed, 09/19/2012 - 14:29 | 2812133 gjp
gjp's picture

Stocks did you say?  You mean the ones that just hit new post - QEternity highs?  Stocks never go down.  We know who's buying.  And who would sell?

Another beautiful day in bubbleland

Wed, 09/19/2012 - 14:29 | 2812134 slaughterer
slaughterer's picture

This time the Middle East is more volatile.  We do not expect the post-QE drop to last more than 5 days. 

Wed, 09/19/2012 - 15:05 | 2812344 RSBriggs
RSBriggs's picture

My prediction is that it will last until just about election day...

Wed, 09/19/2012 - 14:28 | 2812135 Big Corked Boots
Big Corked Boots's picture

Having gained much practice manipulating silver and gold, the next commodity has clearly been targeted...

Wed, 09/19/2012 - 14:29 | 2812141 roadsnbridges
roadsnbridges's picture

If it moves, jump it.

Seems all those exited from oil jumped S.

Look at that little monkey run!

Wed, 09/19/2012 - 14:35 | 2812150 Jlmadyson
Jlmadyson's picture

It should be down 20 cents easily at the pump going by RBOB in the last week.

Let's see how long that takes.....

Something very weird is going on in these markets right now.

Wed, 09/19/2012 - 14:42 | 2812209 Dr. Engali
Dr. Engali's picture

It's already down .15 here in Indiana. prior to Qe infinity it was 3.999 for two weeks straight, then the day of QE it dropped th 3.859.

Wed, 09/19/2012 - 14:59 | 2812278 Jlmadyson
Jlmadyson's picture

It hasn't even moved 5c here yet.

And going by gbuddy trends it has been sideways nationwide with some very small moves down.

Wed, 09/19/2012 - 14:33 | 2812164 surf0766
surf0766's picture

This is the bottom.  All up from here.

Wed, 09/19/2012 - 14:33 | 2812166 Grand Supercycle
Grand Supercycle's picture

Due to QE3 and short covering spikes, all these daily charts are extremely overextended & significant correction expected very soon ~ SPX, NZDUSD, GBPUSD, AUDUSD, COPPER, CRUDE, GOLD, SILVER.

http://www.zerohedge.com/news/2012-12-24/market-analysis
http://trader618.com

Wed, 09/19/2012 - 14:39 | 2812199 Unbezahlbar
Unbezahlbar's picture

Don't worry. Check in with me in 10 days when oil regresses to market reality at $100 per barrel.  Manipulators are fickle.

Wed, 09/19/2012 - 14:42 | 2812211 GoldbugVariation
GoldbugVariation's picture

Great charts.  So oil falls between 5% and 20%, then from T+20 it rises.

Sell the news.  Then BTFD!

Any equivalent chart for equity prices?

Wed, 09/19/2012 - 14:57 | 2812284 Neo
Neo's picture

It would seem to me that the only way the manipulators (banks/hedgefunds/CBs) can continue to maintain control is to constantly change the game. Relying on past patterns to trade anything seems like a sure fire way to loose your ass.

When they control the gameboard, pieces, and the rules, there just is no way to beat them, except not to play.

We may be looking at the moment when "they" decide to move on from Oil to something else.

 

Wed, 09/19/2012 - 14:43 | 2812217 Spastica Rex
Spastica Rex's picture

Manipulation, BFD (big fuckin' deal).

Wed, 09/19/2012 - 14:43 | 2812219 disabledvet
disabledvet's picture

The problem with impeding information flow...which by definition QE does on STEROIDS means a loss of liquidity to ALL markets. This is the inverse of "efficient market theory" and IT HAS CONSEQUENCES. The irony that equities rally on such a condition should be lost on no one...but of course it is lost on EVERYONE instead. Hmmm. Fee-fi-foo-fum I smell the rat of EGO-dumb.

Wed, 09/19/2012 - 14:43 | 2812222 Squid Vicious
Squid Vicious's picture

welcome to Zimbabwe writ large, bitches...I guess Jeremy Siegel was right about Dow 36,000 for all the wrong reasons...

Wed, 09/19/2012 - 14:50 | 2812249 caimen garou
caimen garou's picture

finger pressing monkeys,nothing exciting. that is all..

Wed, 09/19/2012 - 14:50 | 2812252 lolmao500
lolmao500's picture

This is gonna be useful when Israel bombs Iran.

Wed, 09/19/2012 - 14:51 | 2812262 the not so migh...
the not so mighty maximiza's picture

Within 10 days

Wed, 09/19/2012 - 15:26 | 2812433 lolmao500
lolmao500's picture

Yep. More precisely : YOM KIPPUR.

Wed, 09/19/2012 - 15:15 | 2812388 cbxer55
cbxer55's picture

Iran's nuclear facilities were attacked today. Someone or something blew up the electric lines that keep the centrifuges running.

Hmmmm!

http://news.yahoo.com/sabotaging-iran-nukes-084500157--politics.html

Wed, 09/19/2012 - 17:08 | 2812876 Seer
Seer's picture

Sigh of relief... China-Japan tensions were starting to get too much to handle, needed something else! </sarc>

Wed, 09/19/2012 - 14:52 | 2812265 sangell
sangell's picture

The tarbucket in the White House will have to kneel next time he is summoned by the Saudi King.

Wed, 09/19/2012 - 15:28 | 2812303 t0mmyBerg
t0mmyBerg's picture

OK I will say what is implied but unstated.  The 3 day plunge right after QE is a politically directed sell program.  The Directors are the same who decided upon QEInf, Obama and Bernanke/Dudley/Yellen.  Only somehow they have been well prepared as they have also enlisted the support of the Saudis.  Kissing the ring and the ass of those Wahhabist fucks is paying dividends in spades for Obama now as they help him out.  So he gets a risk asset ramp AND he gets energy prices lower.  Brilliant!  Can anyone say impeachment? 

Wed, 09/19/2012 - 14:58 | 2812308 Dr. Gonzo
Dr. Gonzo's picture

10 oz salted tungsten bars curiously found immediately after QE(infinity) as well. Just cover your nuts after they wreak monetary havic. They are going to try to punish as many people who refuse the stock market and Treasury market in as many clever ways as they can.

Wed, 09/19/2012 - 14:59 | 2812314 Remington IV
Remington IV's picture

CPI , x-CPI ???

Wed, 09/19/2012 - 15:00 | 2812320 JPMorgan
JPMorgan's picture

Black (peak) gold bitchez!

Wed, 09/19/2012 - 15:10 | 2812332 Cult_of_Reason
Cult_of_Reason's picture

Re: "It's almost as if someone wanted to prove that extreme monetary policy does indeed have no inflationary impact on the price of energy..."

Hmm... Who is that "someone" could be?

Maybe the one who makes statements during his congressional testimonies that QE money printing has nothing to do with price of crude?

Or maybe the one who wants people to think they are better off today than four years ago?

Or maybe it is just weak global economy and lower demand?

Or maybe this:

Commodity prices could come under severe pressure if the U.S. Internal Revenue Service (IRS) decides to revoke previous rulings that have allowed mutual funds to pour over $50 billion into commodity derivatives through subsidiaries in the Cayman Islands and structured notes while remaining exempt from corporate income tax.

http://www.reuters.com/article/2012/09/14/us-column-kemp-commodities-taxruling-idUSBRE88D0I420120914

 

Wed, 09/19/2012 - 15:32 | 2812469 Meesohaawnee
Meesohaawnee's picture

the concept of free markets is a grand illusion

Wed, 09/19/2012 - 15:48 | 2812556 spanish inquisition
spanish inquisition's picture

I am selling oil and buying MBS based on the 4 month out list Ben gave me.

Wed, 09/19/2012 - 15:53 | 2812574 adr
adr's picture

The market wants Obama back in. He loses with gasoline higher that $4.00. Oil at $85 gives him the victory and then it's off to the races again. Also setting up one hell of a position for those in the know to get long right at the exact time the bottom hits. Which would be shortly after the electoral college meets to cast their votes for Obama.

By New Year's day you can expect crude to hit $150 a barrel.

Hope i'm wrong.

Wed, 09/19/2012 - 16:46 | 2812799 Grey-Ghost
Grey-Ghost's picture

The market wants...

If "the market wants" out of its free will, than the corporations are people indeed. Only that I request my gay corporation would be allowed to marry a corporation it loves...

Wed, 09/19/2012 - 16:05 | 2812648 NRGIsFree
NRGIsFree's picture


If you are suggesting the markets may be in some way manipulated I would ask that you peddle your conspiracy theorizing elsewhere. This is a free country with free markets and if you don't like it go somewhere else. (Said the American ignorantly defending tyranny.)

Wed, 09/19/2012 - 16:05 | 2812650 NRGIsFree
NRGIsFree's picture


If you are suggesting the markets may be in some way manipulated I would ask that you peddle your conspiracy theorizing elsewhere. This is a free country with free markets and if you don't like it go somewhere else. (Said the American ignorantly defending tyranny.)

Wed, 09/19/2012 - 17:54 | 2813029 falak pema
falak pema's picture

thats what I like about Oil : its a PREORDAINED free market; now that is true godliness! 

from time to time God readjusts the preordainment to ENSURE the free market stays 'free AND prordained'.

Wed, 09/19/2012 - 18:41 | 2813191 max2205
max2205's picture

No manipulation here.

Wed, 09/19/2012 - 19:27 | 2813299 TWSceptic
TWSceptic's picture

How conventient, QE3 and lower crude pre-election. Couldn't have turned out better for Obama. Thanks Bernanke & Co for pimping my ride.

Wed, 09/19/2012 - 20:26 | 2813430 Venerability
Venerability's picture

I'm beginning to think it is something more serious: another MF Global/Peregrine situation, this time possibly involving a hedge fund in London, which may trade within the JPM Nexus - everything old is new again, part zillion.

Why do I say so? I just posted this at Seeking Alpha in a Silver thread:

Simon Lack, who gifted SA with various anti-CDE stories in rapid succession when the stock was languishing at its annual lows, just came out with a story at Business Insider tonight called - I kid you not - "The Tragedy of CDE," in which he makes the same "arguments" he did when the stock was at 15.

For anyone not familiar with the facts, Mr. Lack is a former high-ranking JPM executive who currenly manages hedge funds - one surmises from the Short side - which trade through JPM in London, home of the Whales.

There was much talk at Zero Hedge and elsewhere a few weeks ago that JPM could simply not stand it if the Silver price were to reach 34 again.

Silver has just reached 34, and we hear once again from Mr. Lack.

The above was the Seeking Alpha post.

Since Short-oriented Hedgies tend not to be Short just one commodity, and those in London are known to use even more leverage than most, follow the dotted lines.

Isn't it a bit strange, to say the least, that semi-official media protectors of the Alpha Bank, Business Insider, would suddenly publish anti-Silver propaganda from a Blythe Masters crony, immediately following a contract turnover takedown of BRENT - much more unusual than the same ole, same ole WTI takedowns that typically occur on loud Saudi propaganda pushes?

So far, like most of you, I've just rolled my eyes and shaken my head at the Oil events of the past three days. And then we hear from good ole Simon Lack again . . .

 

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