OPEC is doing its best to drive oil back to the $80-$100 range
In keeping with the fascinating dichotomy of quoted opinion from leaders of EU nations, French President Sarkozy stated today that several EU nations had prepared a bailout package for Greece though he did not expect this to be necessary. Now did this statement drive the credit default swap spread tighter on the riskiest corporate offerings in the EU? Did everyone just forget the statements from France’s counterpart in Germany at the end of last week? The DAX is up nicely on the open today? Perhaps France is carrying some risk though obviously to a lesser degree than Spain or Portugal. Fascinating how the stronger economies in the EU are not interested in a bailout of Greece while the riskier economies claim a bailout is eminent though not probable. Just noting the ongoing discrepancies for later analysis though we all invest in the stock market because of its short term memory that a weekend can facilitate. We are well on our way to DOW 12,000.
This being said, of course OPEC is doing its best to drive oil back to the $80-$100 range. Of course, according to Libya’s OPEC representative, this will not affect the global recovery. Now this statement might be slightly biased as OPEC clearly will benefit from higher oil prices. Much of the world is quite close to considerable inflation concerns. China says it may be willing to exit its special exchange rate policy when world economic conditions are right and the Yuan is undervalued on low local reserves. The reverse requirement hikes are not indicative of a tightening money supply. Generally, I think if you write the exact opposite of what is printed and look at it next to the printed headlines, the truth comes out between the lines. China is heavily leveraged though they are playing their cards so wisely.
