Historians always look to Roman Empire as an example of how at one point in history you can be the most powerful country on the face of the earth only to crumble shortly thereafter into the dustbin of history. It appears that Obama’s appointments at the Environmental Protection Agency seem to repeat the same mistake that brought down the once great empire.
As reported by CNS NEWS, Sen. James Inhofe (R-OK) on the Senate floor drew attention to a video of a top EPA official saying the EPA’s “philosophy” is to “crucify” and “make examples” of oil and gas companies, "just as the Romans crucified random citizens in areas they conquered to ensure obedience." In the video, Administrator Armendariz says: “I was in a meeting once and I gave an analogy to my staff about my philosophy of enforcement, and I think it was probably a little crude and maybe not appropriate for the meeting, but I’ll go ahead and tell you what I said: “It was kind of like how the Romans used to, you know, conquer villages in the Mediterranean. They’d go in to a little Turkish town somewhere, they’d find the first five guys they saw and they’d crucify them."
This is the same attitude the administration has taken with oil speculators. Accuse them of manipulating the market without any proof and spend more money so the government can better seek out a few to crucify to send a message that the President is in charge. Hang them high for all to see but just make sure you hold off the announcement until the President has a chance to give a speech about the evils of the free market.
At the same time have the guy that has done more damage to the reputation of the commodity industry, John Corzine, who was in charge of MF Global at the time of perhaps the greatest commodity fraud in history, actively raise money for your re-election bid. It makes you wonder if the administration applauds Mr. Corzine contributions to the futures industry.
Oil seems to be getting a bit of a downgrade after Spain did, yet more Japanese stimulus could help support prices. S&P stated the obvious. Dow-Jones reported that, "Spanish government bonds fell sharply in early Friday trading, erasing the gains of the past week, after Standard & Poor's Ratings Services downgraded Spain's credit rating. The move by S&P has soured sentiment in the euro-zone periphery, and pulled Italian bonds lower ahead of Italy's month-end bond auction, seen as a critical test of demand for lower-rated debt. The euro also came under pressure after the downgrade, which was announced late in the U.S. session Thursday. The Spanish 10-year bond yield climbed by 16 basis points to 5.94%, while the yield on the corresponding Italian bond was 13 basis points higher at 5.74%. Spanish yields had fallen this week after a solid Dutch bond auction eased Eurozone tensions, but Friday's sharp increase has reversed that decline. S&P lowered its rating on Spain by two notches to triple-B-plus, highlighting the risks posed to the country's efforts to bring its budget deficit under control, and bringing it into line with the firm's view on Italy."
Japan is worried about deflation and went to the printing presses. Reuters reported that, "The Bank of Japan boosted its asset-buying scheme by a further 10 trillion yen ($124 billion) on Friday and pledged to buy longer-term government bonds in a move seen aimed at convincing both impatient politicians and investors of its resolve to pull the economy out of deflation. The central bank also kept expectations of more stimulus alive as it pledged to "pursue powerful monetary easing" to reach its 1% inflation target, even as it nudged up its growth and price forecasts for the coming years. The policy easing came at the top of an expected 5-10 trillion yen range and initially impressed markets, pushing the yen lower. The central bank's decision to buy more exchange-traded funds (ETFs) and real-estate linked funds also helped lift Tokyo shares. But the yen later crept back up and stocks slipped as some market players saw the BOJ's decision to give itself more time to hit the bond-buying goal as a sign that central bankers themselves had doubts about how much good their action would do for the struggling economy." Or because it offset the downgrade of Spain and news out of China.
The Wall Street Journal reported that, "The Chinese central bank guided the yuan to a fresh record high for the second straight day Friday, amid renewed pressure from Washington for Beijing to let its currency appreciate more and as a high-level Sino-U.S. economic dialogue approaches. The authorities' aggressive move came despite growing consensus among investors that the days of fast yuan appreciation are over after Chinese leaders repeatedly described the currency as nearing fair value in recent weeks. A stable, if not weaker, outlook for the yuan is also supported by data showing a slowing China economy and shrinking current account surpluses for the exporting powerhouse. The People's Bank of China set the dollar/yuan central parity rate at 6.2787, the lowest level since China depegged its currency from the dollar in 2005 and down from Thursday's 6.2829. The reference exchange rate is also lower than Thursday's close at 6.3060 in over-the-counter trading."
For oil we'll be watching the dollar.