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Oililocks: Why Obama Needs Crude "Just Right"

Tyler Durden's picture




 

The performance of CRB's sub-industrials relative to Oil has been a consistently useful indication of economic sentiment. Given the recent performance, Oil prices suggest a significant drop in US Manufacturing PMI - sub-40! This leaves President Obama with a dilemma: one the one hand he needs to pressure Oil down (SPR jawboning?) in order to maintain some semblance of economic growth and recovery (and perhaps jobs) but given the highly correlated (and QEternity-driven liquidity spillover) asset markets, a lower oil price fundamentally suggests lower global growth and technically drags risk-assets lower - which in turn moves stocks lower. Once again an encumbent tries to find the Goldilocks-level of Oil - too hot and growth slumps, too cold and markets slump, just right and get re-elected.

The relative performance of CRB's sub-industrials / Oil (i.e. when oil is outpeforming the blue line drops) implies - with a lag - that US Manufacturing PMI will be dramatically lower by election time...

 

Of course, one way around this 'correlation' is to bid up sub-industrials also... but perhaps this helps to explain the recent and sudden drop in crude prices...

It does suggest that TPTB will be trying to suppress Oil vol once it gets into its 'groove' but with event risks everywhere, that seems a lot of tail-risk to take on...

 

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Thu, 09/20/2012 - 14:01 | 2815616 slaughterer
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Tail risk: Israel nukes Iran.  Uh, let's see Obama find the "Goldilocks level" of that!

Thu, 09/20/2012 - 14:09 | 2815647 dracos_ghost
dracos_ghost's picture

I believe they would call it Goldilox.

Thu, 09/20/2012 - 17:26 | 2816088 BlackholeDivestment
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Slaughterer, the key to Rosemary's Baby ''Goldilocks level''  is, The 666 Washington MonuMENTAL (open for business) seal of the ''Devil's Tail'' defining the Israel and Iran nuke (event) dollar call spike up and the Golden BTFD Cup of Fornication pooring out of the wine of wrath, from the bottomless QE debt pit of Hell, from (FDR's) the war room

(where Rosemary's Baby gave his second Oath of Office out of public view, without Lincoln's Bible, in front of the Masonic architect Benjamin LaTrobe's picture)

                            ...so the

 http://www.youtube.com/watch?v=hmWT05B6HgE&feature=autoplay&list=PL2BBEF376D548EA40&playnext=2

            2012 Phoenix Bird rises in Aquarius

http://www.thegatewaypundit.com/2012/09/new-obama-flag-looks-eerily-like-bloody-handprints-at-benghazi-consulate/ 

...like the Angel in the Sun now upon our Israel Iran event horizon, timed with the open (goldilocks) gate of the Star, that scorched the Earth and marked the world through the (burnt) offering of temptation and the blood of debt that can never be paid, now sealed in agreement with the deceived and willful host upon the alter of the Earth. 

Man that some spooky stuff, lol.

The government ''gold(i)lock'' bounce is (padded) opened by the (Antichrist) dried up (Spring) waters (nations of people) of the (Middle East) Euphrates, having become the New Aquarian (Age) Generation (2013) beating the prophetic war drum, calling for (false) peace in agreement with the (Jerusalem) offer of the beast, the New World Order. 

http://www.silverdoctors.com/leap2020-global-economy-will-be-sucked-into-black-hole-in-october/

Thu, 09/20/2012 - 14:02 | 2815617 vast-dom
vast-dom's picture

re-elected for what exactly and what for?

Thu, 09/20/2012 - 14:04 | 2815626 slaughterer
slaughterer's picture

"re-elected" for feeding the 47% with EBT and the .01% with QEternity.   O is a shoe in.  

Thu, 09/20/2012 - 14:53 | 2815780 Hippocratic Oaf
Hippocratic Oaf's picture

Sad

True

Thu, 09/20/2012 - 14:06 | 2815632 scythian empire
scythian empire's picture

THE IDEA THAT THE MARKET AT LARGE ISN'T DETERMINING THE PRICE OF OIL IS PARANOIA

 

go ahead with fed / bb / inflation argument

Thu, 09/20/2012 - 14:08 | 2815637 Bunga Bunga
Bunga Bunga's picture

Oil is cornered by propaganda, to the downside by Israel's, to the upside by government's.

Thu, 09/20/2012 - 14:08 | 2815638 Jason T
Jason T's picture

ship is gonna hit the sand post this election

Thu, 09/20/2012 - 14:29 | 2815709 walküre
walküre's picture

Baltic Dry shot up over 10% since last week. The ships are flying over the sand?

Thu, 09/20/2012 - 15:33 | 2815935 takinthehighway
takinthehighway's picture

Time to restock Wally World for Christmas.

Thu, 09/20/2012 - 14:09 | 2815643 fonzannoon
fonzannoon's picture

Anyone see JPM and BAC retail sites get knocked offline? Some terrorist group claims credit for it. I don't know if there is any truth to it but of it is a dry run for knocking the ebt card system off line that is some scary shit to consider.

Thu, 09/20/2012 - 14:12 | 2815654 slaughterer
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Where is the BRent "groove" except at teh Saudi-pegged $100?  But, got to understand, OPEC curtailing refinery cap today and Saudis'gotta-make-a-living-to-keep-paying-the-Lisa-Falcone-size-bills-in-Abu-Dabi ain't so O friendly.   But, Saudis gotta keep "drill motherfuker drill" Mittens out of office for the "US must transition to green energy" energy-failure Obummer, where do we go?  WTI is a coin flip, until Simon Potter gets his SMS from BB "GET TO WORK!" and suppresses it full-frontal along with the ZH-cult "silver bitchez" (see ya below $30 before above $40--unfortunately).  Diagnosis of a bad, bad year for rational commodity investors a la Jim Rogers, Marc Faber (those guys are fuked as per our latest).  

Thu, 09/20/2012 - 14:43 | 2815751 RSBriggs
RSBriggs's picture

Let's see what the price of silver is versus the USD is in about 10 years - which is when I *might* be starting to think about selling some of my silver....

Thu, 09/20/2012 - 14:16 | 2815665 fonzannoon
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I don't know Slaughterer, Ben was first in line with QEinfinity. Twist ends in Dec and he will fill that void with more unsterilized LSAP. Plus the worse the numbers get the more he will blame Congress while wearing his scarlet letters CTRL-P to "fill the void" that fiscal policy will not. Even though the thought that fiscal policy could do anything other than trigger a massive depression still has not occured to anyone. So we print, eventually get downgraded and the USD starts falling hard, Precious metals get bid hard, as does oil. Blame flies around like monkeys throwing shit.

Thu, 09/20/2012 - 14:27 | 2815702 slaughterer
slaughterer's picture

fonzanoon, love you, drink a bottle FR sauv Blanc and 3 bottles San Diego IPA for lunch, pleeze to see things as I do.  Fiscal policy is just pointless party politics and Bohner's short account at Schwab.  It is sick, but that skum-bag politico from Ny (sSchumer) was right in saying the "Fed is the only game in town."  BB MUST print because fed politics in USSA is at a pathological stand-still via the trading accounts of such CONgresskritters swaying and sawing for private gain.  OK, stay in PMs and OIL (we are) but it will be MAX PAINFAUL till 'lection night (we cunt guarantee, given post-FOMC suppression action).  Commodity bulls really need a BIGGER black swan from the MIddle East than this Libya embasssy-cide, we need the Israel :we are so small and threatened by the Mid-East fascoids:nuke option.  and O. is perfectly paralyzed with regard to israel--hs anyone noticed?  O and Israel do not go together at all.   AWWWWWW.    

Thu, 09/20/2012 - 15:00 | 2815805 fonzannoon
fonzannoon's picture

tremendous reply

Thu, 09/20/2012 - 14:25 | 2815691 Cangaroo.TNT
Cangaroo.TNT's picture

It also helps if your opponent is a moron.  Let me rephrase that.  It also helps if your opponent is at least as big a moron as yourself.

Thu, 09/20/2012 - 14:32 | 2815719 ZerOhead
ZerOhead's picture

And I thought Obama was a muslim...

Thu, 09/20/2012 - 14:26 | 2815697 SDRII
SDRII's picture

Turkey borrowing Gold too...

In the face of tough economic times Turkish jewelers have launched a jewelry rental system for those facing financial difficulties making them unable or unwilling to invest in gold jewelry for weddings. The skyrocketing price of the yellow commodity has made it increasingly difficult for couples facing financial stress to tie the knot with traditional wedding parties, where giving golden coins or jewelry as a gift is traditional. The hiring or rental system has been in place for the last few years and gives couples the ability to hire gold jewelry for 10 percent of its total price for a week. The most sought after jewelry is 14 carat gold sets.

Thu, 09/20/2012 - 14:26 | 2815698 walküre
walküre's picture

Paper shuffling whether sterilized or unsterilized is not a substitute for DEMAND. Who would have known?

Price of oil could collapse more or take a moonshoot. Just depends on how the paper shufflers are placing their bets. Higher prices are unsustainable and profits are questionable. Lower prices could spur demand and help economic growth which in turn drives profits elsewhere.

It's their game to win. Rest assured. They never lose.

Thu, 09/20/2012 - 14:27 | 2815703 SDRII
SDRII's picture

Azerbaijan buys 10 tons of gold to diversify investment

Thu, 09/20/2012 - 14:32 | 2815707 Bam_Man
Bam_Man's picture

Don't worry, "Oil's Well That Ends Well"

http://www.youtube.com/watch?v=VKKsJ57OHPs

Thu, 09/20/2012 - 14:31 | 2815716 hannah
hannah's picture

obama needs to change the price of gas at the pump which is a completely different beast than a barrel of oil.

Thu, 09/20/2012 - 15:24 | 2815903 Papasmurf
Papasmurf's picture

$4 North of Bethesda Md, $4.99 9/10 in Bethesda for premium.

Obama will do okay in the erections with $5 gas because mittens has his dick in his mouth.  At this point, most of the 49% of folks know how mittens feels about them, more know he raped and pillaged companies and took FDIC insurance under duress, so the race has changed from "anyone but O' to anyone but Mittens".

Thu, 09/20/2012 - 15:28 | 2815918 walküre
walküre's picture

Reminds me of the '04 elections and how it was John Kerry's game to lose.

Thu, 09/20/2012 - 14:33 | 2815721 SelfGov
SelfGov's picture

Obama doesn't have as much control as some would like to believe.

 

Oil and gas prices have been highly volitile within a certain range.

 

That range has a ceiling which is slowly lowering combined with a rapidly lifting floor.

 

http://advisorperspectives.com/dshort/charts/inflation/gasoline-since-20...

 

I think I've heard of this being called a pennant.

Thu, 09/20/2012 - 14:39 | 2815734 RSBriggs
RSBriggs's picture

Which looks like it wants to break hard (in one direction or another) right around election time.

Thu, 09/20/2012 - 15:02 | 2815812 SelfGov
SelfGov's picture

Without QE3 it would have broken down, hard.

With QE3...? ouch...

Thu, 09/20/2012 - 14:48 | 2815765 slaughterer
slaughterer's picture

Pennants EXPLODE either HIGHER or LOWER?  Which side you on, PUNK?

Thu, 09/20/2012 - 14:56 | 2815795 fuu
fuu's picture

Have one for me.

Thu, 09/20/2012 - 15:01 | 2815807 SelfGov
SelfGov's picture

Both sides are the losing side.

Thu, 09/20/2012 - 14:48 | 2815768 Cult of Criminality
Cult of Criminality's picture

Thats ok,none of that oil stuff is going to matter this election.Obummer HQ Has just released a forty four button set of Obummer buttons so you can wear them proudly and show your support along with the vote of the sheeple.

Thu, 09/20/2012 - 14:49 | 2815770 slaughterer
slaughterer's picture

I am a capitalist PIGMAN, and I will vote for O as long as BB keeps on feeding me my QE> ETERNITY!

Thu, 09/20/2012 - 16:36 | 2816180 Everybodys All ...
Everybodys All American's picture

O is a socialist/fascist and is going to take your wealth one way or another.

Thu, 09/20/2012 - 14:49 | 2815772 Cult of Criminality
Cult of Criminality's picture

Or you can vote for Mittens with the sheeple

Thu, 09/20/2012 - 16:30 | 2816148 mr1963
mr1963's picture

Or "vote for Mittens with the sheeple?"

Yeah, cause only informed voters vote for O, right?

Thu, 09/20/2012 - 14:50 | 2815773 rosiescenario
rosiescenario's picture

The interesting news out on Monsanto today relating to the cancer potential of GMO corn, if proven correct, will directly affect Obama's reelection as he had a private, away from the WH, meeting with Monsanto about 10 days before the USDA gave Monsanto unrestricted approval for GMO alfalfa. Even MoveOnreported on this negative tie in between Monsanto and Obama. The USDA did not take into account all of the negative testimony on permitting GMO alfalfa and gave Monsanto an unrestricted green light to sell the product everywhere, despite the cross pollination issues.

 

Just another example of who actually runs the government, starting with our prez.

 

 

Thu, 09/20/2012 - 14:54 | 2815789 slaughterer
slaughterer's picture

All respect due, but MONSANTO is the most EVIL corporation in the worlld. It is the GS of ag.  Everybody knows this and hates MONSANTO. To think that our TOTUS would even speak to those skums, is hetesy.  

Fri, 09/21/2012 - 01:43 | 2817025 Freddie
Freddie's picture

Bill Ayers dad was on the board of directors of Searle which was bought by Monsanto/ Obama and also Rumsfeld was a CEO for Searle.

Thu, 09/20/2012 - 14:53 | 2815776 Squid Vicious
Squid Vicious's picture

election is in the bag unless he gets caught smoking crack with Marion Barry, then it would be a 50/50 shot...

Thu, 09/20/2012 - 14:56 | 2815796 slaughterer
slaughterer's picture

... Even if OBAMA regularly shot HEROIN with LIndsay Lohan he would get re-elected... LEt's hear from Reggie's minions.. aren't we an OBAMANATION at this point?   

Thu, 09/20/2012 - 15:20 | 2815889 walküre
walküre's picture

Why does this visual not even shock me? I must be really really jaded by now.

Fri, 09/21/2012 - 01:45 | 2817028 Freddie
Freddie's picture

Unless everything is rugged - Obama loses.

Thu, 09/20/2012 - 15:23 | 2815901 pods
pods's picture

Da bitch set me up!

Thu, 09/20/2012 - 14:54 | 2815788 Inthemix96
Inthemix96's picture

Well lets be honest folks,

Goldilocks obama is a cunt.  And how many of your comrades believe his shit?

Obombya is a genocidal maniac, but how many mericans follow him?

I take no pleasure saying, you lot are fucked. And so are us over in europe.

Thu, 09/20/2012 - 14:54 | 2815790 Cult of Criminality
Cult of Criminality's picture

I think France told Murdersanto to stick their corncob...

 Well you know ;>)

Thu, 09/20/2012 - 15:06 | 2815821 muppet_master
muppet_master's picture

a few days ago on foxbusiness:

some cftc regulator bart chilton

was blaming the "cheetah traders" for the initial drop in oil in few minutes....is that the best that kenyanomics can think of? a freaking cheetah? yes i know odummernomcs-dictatornomics has a carotid hold on every gov organization and tells then what to say.

the "regulator" said, see we need to regulate the cheetah traders...REALLY?

right @ QE3 i said sell everything ! including gold, OIL, eur and spx..and then on Fri = i said TOP for everything...If you had shorted oil @ $99 on Fri..and ROOOOOODE til now = $91...that's almost a week...at the pace of a snail !!! LOL !!! yes the snail beat the cheetah ! go figure !!! go figure @ the manipulation !!

"cheetah traders" = odummernomic's cronny INSIDER buddies. freaking hypocrisy you can believe in !!!

 


http://dealbook.nytimes.com/2011/10/04/regulator-proposes-oversight-of-high-speed-traders/

 

Thu, 09/20/2012 - 15:08 | 2815838 slaughterer
slaughterer's picture

Guess what, snail trader, WTI is going to $120 in OUR fuked-up-currently-losing view, "Cheetah traders" be damned.  

Thu, 09/20/2012 - 20:55 | 2816648 J 457
J 457's picture

Did you cover your oil/SLV short and go long?

Thu, 09/20/2012 - 15:11 | 2815847 lolmao500
lolmao500's picture

Israel will start a war and Obama will look like a tough guy and he'll win the election.

Thu, 09/20/2012 - 15:21 | 2815893 Cult of Criminality
Cult of Criminality's picture

"The Mormons are one of those cult systems that emphasize priestly authority,secret rituals and symbols"

From;

'Kingdom of the Cults  1965,  Author;Walter Martin

Thu, 09/20/2012 - 15:25 | 2815906 lolmao500
lolmao500's picture

Well Israel is campaigning for Romney in Florida.

http://www.politico.com/blogs/burns-haberman/2012/09/netanyahu-ad-to-deb...

Netanyahu ad to debut in Florida

Next up : China campaigning for Obama.

Thu, 09/20/2012 - 15:27 | 2815913 Cult of Criminality
Cult of Criminality's picture

Can`t we just drive a stake in the heart of the system ?

 

Thu, 09/20/2012 - 15:29 | 2815920 Cult of Criminality
Cult of Criminality's picture

Yea all those assholes have been coming around Gainesville pimping

thats way to close to home,makes me puke

Thu, 09/20/2012 - 15:50 | 2815978 q99x2
q99x2's picture

No mo jowbonee macaroni please.

Thu, 09/20/2012 - 17:19 | 2816299 HungrySeagull
HungrySeagull's picture

Follow the Venezuela Model.

 

Take Gas from 4.05 to .05 using QE money.

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