Here Comes The Double Dip Pt. 3

[Arthur75]

and China and India are so far ignoring the US embargo.

Yes, and Obama isn't really doing anything about it, as to the world market doing without Iran oil, most probably it couldn't, the question would be how much does this embargo takes out of the market (it can also lower Iran revenues for the same amount they "produce", and make Irn oil cheaper for China and India)

[Plantagenet]

and China and India are so far ignoring the US embargo.

Yes, and Obama isn't really doing anything about it

Yes he is:

WASHINGTON — President Barack Obama said Friday he was plowing ahead with potential sanctions against countries that keep buying oil from Iran, including allies of the United States, in a deepening campaign to starve Iran of money for its disputed nuclear program.

The world oil market is tight but deep enough to keep the squeeze on Iran, Obama ruled.

The sanctions aim to further isolate Iran's central bank, which processes nearly all of the Iran's oil purchases, from the global economy. Obama's move clears the way for the U.S. to penalize foreign financial institutions that do oil business with Iran by barring them from having a U.S.-based affiliate or doing business here.

Obama's goal is to tighten the pressure on Iran, not allies, and already the administration exempted 10 European Union countries and Japan from the threat of sanctions because they cut their oil purchases from Iran. Other nations have about three months to significantly reduce such imports before sanctions would kick in.

...administration officials said that Obama is ready to slap sanctions on U.S. partners and that his action on Friday was another signal.

---from the Huffington Post

--------------

But according to the White House there are no worries about a spike in oil prices hurting the economy or anything like that---the Obama white house says we can get plenty of oil from our friends the Saudis to replace the 3 million barrels/day of Iranian exports.

[TheAntiDoomer]

You know things are getting crazy when PlantedAgent decides to side with the Iranians! and ignores the fact that it is his people the REPUBLICANS that want to bomb bomb bomb bomb Iran! (which would lead to FAR higher oil prices than sanctions!)

[Plantagenet]

.... bomb bomb bomb bomb Iran! (which would lead to FAR higher oil prices than sanctions!)

Your fantasies about "bomb bomb bomb bomb Iran" aren't whats going on, Anti.

Why not face facts: Obama's new global sanctions are producing higher global oil prices which the US doesn't need right now. Job growth is already slowing, and the overall economy may stall as well if oil prices go much higher.

[TheAntiDoomer]

sigh, this cartoon is far ore accurate:

[Plantagenet]

Hi anti:

Try to keep up---You are years behind the times. The recession ended three years ago. This thread is about the ongoing weak recovery and the possibility that we may go back into recession now.

I'm suggesting that increasing oil prices happing right now caused by Obama's global sanctions regime against iranian exports going into effect now are responsible for the drop in hiring seen in the March jobs data----and still further increases in oil prices may cause higher gas prices and more economic pain in the US this summer.

[joewp]

Wow, don't you dudes know it's not "Obama" or the "Republicans" but the banks and corporations that are doing this? All these guys are at least members of the Council on Foreign Relations, one of the bankers' methods of controlling the government. Campaign financing, lobbying, employment deals upon leaving office, all these are methods to control the politicians.

Obama may be rattling the sabres at Iran to cover for the run-up in oil prices (which are currently "down"), but so did Bush and so will the next president, whoever he might be. ]

[Plantagenet]

Obama may be rattling the sabres at Iran to cover for the run-up in oil prices (which are currently "down"), but so did Bush and so will the next president, whoever he might be. ]

1. Oil prices aren't down---they are up. Oil prices have more than doubled since 2009 and are at record highs in europe and near record highs in the USA.

2. The problem we are looking at now isn't that obama is "rattling the sabres at iran" or that Bush rattled sabers eight years ago. If anything, Obama is trying to damp down war talk and stop the Israelis from bombing Iran. The problem is that the policy that Obama has chosen to implement instead----sanctioning any bank in any country in the world that imports iranian oil--- is designed to take 3 million barrels/day of Iranian oil off the global export market.

IMHO thats very stupid policy and a wrong-headed approach. Obama's plan to block Iranian oil exports will inevitably drive energy prices even higher and inflict damage on the US economy and the global economy.

[Arthur75]

Maybe reducing Iran exports 600 to 700 000 barrels a day and providing cheaper oil to China and India according to below :
http://www.bloomberg.com/news/2012-03-2 ... -oil-.html
indeed quite a risky move ...

[Plantagenet]

JP Morgan says the new US sanctions will result in maybe a million barrels a day of Iranian oil being blocked from getting into the global market right away, and thats assuming Iran doesn't respond in any way. Even if we get through the next couple of months OK, in a few months the US sanctions will come into full force with the goal of cutting off all 3 million barrels of Iranian oil exports.

J.P. Morgan Chase & Co. warned Thursday that even before the embargo kicks in fully, existing sanctions on Iranian banks will make it impossible for many refiners in Europe and elsewhere to pay Tehran for crude. That could take a million barrels per day of Iranian oil off the market, it said.

Iran has threatened to retaliate by closing the Strait of Hormuz—a chokepoint used by tankers carrying more than one-fifth of the world's oil output.

[OilFinder2]

Chicago Fed: Midwest Manufacturing Is Booming

The Chicago Federal Reserve reported today that its Midwest Manufacturing Index increased 1.0% in February, to a three and-a-half year high of 90.1 (2007 = 100), following a revised 2.1% monthly gain in January. Here are some highlights of manufacturing activity in the 7th Federal Reserve district covering Illinois, Indiana, Iowa, Michigan, and Wisconsin:

1. Manufacturing output in the Midwest region rose 10.1% from a year earlier in February, almost twice the 4.7% increase in national manufacturing output over the same period (see chart).

2. Regional machinery output in February gained 10.9% from its year-earlier level, compared to a 4.8% increase in machinery output at the national level.

3. Regional steel output improved 13.9% from its February 2010 level, compared to an 9.8% increase in national steel output over that period.

4. The Midwest’s automotive output increased 18.7% in February from its year-ago level, compared to a 12.9% gain in national automotive output.

[...]

[dolanbaker]

http://www.bbc.co.uk/news/business-17661198
Ben Bernanke has said the US economy is yet to fully recover from the impact of the global financial crisis and warned of new risks to the money markets.

Mr Bernanke said that more regulatory action was needed to ensure the stability of the financial markets.

However, he warned that as these procedures are put in place, new risks may emerge.

Mr Bernanke's comments come amid calls for a tighter control of the sector to avoid a repeat of the financial crisis.

"Even as we make progress on known vulnerabilities, we must be mindful that our financial system is constantly evolving and that unanticipated risks will develop over time," Mr Bernanke said.

[Lore]

What to do about Iran is a real conundrum. Embargo, let Isreal do it's thing, or sit there and wait till matters get out of hand on their own Chamberlain style. There are really no good alternatives. Had we taken the bit in our mouths forty years ago and reduced our dependence on oil, we might not of cared much how a ruckus in the Middleast would affect our economy.

Meanwhile as predicted the EU is coming apart at the seams and the US investor is just praying that we can decouple ourselves enough from the pending implosion to prevent the next world wide depression.

[dolanbaker]

Well, one trillion Euros of "glue" was shoved into the system a few months ago, it'll be the Chinese who decide when to drop the western economies, not the US, they'll drop them as well.

[dsula]

IMHO thats very stupid policy and a wrong-headed approach. Obama's plan to block Iranian oil exports will inevitably drive energy prices even higher and inflict damage on the US economy and the global economy.

Anything that makes oil go higher is good policy. Or how else did you guys think the oil age will end? With cheap oil available?

[SeaGypsy]

Paradoxically the most expensive oil to get at is currently by far the cheapest, WTI lagging a solid $20+ all year behind more freely available Tapis & Brent. While I agree the price needs to go up, the way it's doing so is weird and not helpful.

[Lore]

Paradoxically the most expensive oil to get at is currently by far the cheapest, WTI lagging a solid $20+ all year behind more freely available Tapis & Brent. While I agree the price needs to go up, the way it's doing so is weird and not helpful.

Not really too strange, since a lot of the WTI is landlocked which is why there is a push on by big oil to build out all those proposed export pipelines. The gap will narrow once these are completed.

[Pops]

Obama may be rattling the sabres at Iran to cover for the run-up in oil prices (which are currently "down"), but so did Bush and so will the next president, whoever he might be. ]

1. Oil prices aren't down---they are up. Oil prices have more than doubled since 2009 and are at record highs in europe and near record highs in the USA....

really

Come on Plant, you've appeared so reasonable lately. Gauging the price of oil from the bottom of the Bush recession trough and pretending the rise is O's fault probably goes over big on FOX.com or PimpMyTEAParty.com but it doesn't hold any more water on po.com than saying O is responsible for the increase in US production and 30% drop in price since the Great Oil Peak of '08 .

[TheAntiDoomer]

since the Great Oil Peak of '08 .

LOL. You mean that great peak that has already been surpassed in 2012?

Meanwhile back at the ranch........

Jobs growth didn't slow down in March

http://scottgrannis.blogspot.com/2012/0 ... march.html

Did private non farm employment grow in March by only 121K (per the establishment survey), or by a very impressive 318K (per the household survey)? In the 30+ years during which I have been following these two monthly surveys, there have been many times when they have diverged. Over time they tell the same story, but over shorter periods of a few months or even a few years, they can tell different stories. One shorthand way of resolving the problem of a divergence is to simply split the difference, since the truth is likely to be somewhere in the middle. Doing that for March gives you a private sector payroll gain of 225K, which is right around where expectations were, and which is also consistent with what we've seen in the past few months. I don't see any reason to think that the unexpected slowdown in jobs growth that surfaced in the establishment number reflects any actual slowdown in the economy; the economy never turns on a dime without there being a number of indicators suggesting that something big is going on.

[Plantagenet]

Jobs growth didn't slow down in March

Really?