Obama says it's time to end the political circus. Well if there is a political circus in Washington that would, I guess, make him ringmaster Ned . Obama tried to shock, awe and shame Congress into passing his vision of taxing the rich to pay for 450 billion dollars more of government spending.
In a joint session of Congress he called the unemployment rate a national emergancy and an economic crisis that has left millions of our neighbors jobless, and a political crisis that's made things worse. He told Congress that America can't afford to wait. Well they had to wait for the President's vacation before he could come up with a plan but that's another issue. The President's fourth down Hail Mary Pass failed to impress the market. While some good ideas were proposed his dogmatic refrain of taxing the super rich and evil oil companies to pay for his plan. He also failed to motion that a lot of the uncertainty in the business world and the lack of hiring has been caused by his regulatory overreach and ill timed jumbled mess of a health care bill in the depths of an economic catastrophe. While he raised the point that Warren Buffet's secretary pays a higher percentage tax then he does, he had no qualms about giving GE's Jeff Immelt a VIP seat while GE paid no tax at all. Obama is looking to collect tax dollars away from oil company profits so he and GE can pursue their green energy money losing dreams.
The President says his plan, the American Jobs Act, should be passed by Congress right away and there should be nothing controversial about this piece of legislation. He claims everything in the plan is the kind of proposal that's been supported by both Democrats and Republicans -- including many who sat and listened to him last night. And everything in this bill will be paid for by oil companies and evil millionaires. I remember when Obama was mocking the opponents of his health care bill saying the bill passed and the sun still came up. Well the sun did not come up for many Americans who have lost their jobs or failed to find one because of all of the uncertainties this jumbled mess of health care legislation has done to the private sector. Still in all fairness to the President I should tell you that according to the Wall Street Journal, Mark Zandi, Chief Economist at Moody's, estimated that the plan would add 2 percentage points to real GDP growth and 1.9 million payroll jobs, while reducing the unemployment rate by a percentage point. So we get to 8% maybe?
The oil market shook off a very bullish draw in the Energy Information Agency status report. Oil Imports took a big hit as they fell by about one million barrels a day, mainly due to the wild, topical weather. The EIA reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.0 million barrels from the previous week putting them at 353.1 million barrels.
Yet the oil market seemed torn. The weekly jobs number was poor yet the trade balance numbers seemed to suggest a bottoming out of the manufacturing sector and perhaps even some signs of life. There was also some hope that Federal Reserve Chairman Ben Bernanke would hit us with some immediate stimulus. While the market will remain volatile I still believe that long term a bottom is in, perhaps for the rest of the year. In fact even the story by Gregg Myers from the Financial Times points out that exchange data revealed a surge of interest in options that convey the right to sell oil at $50 a barrel by December, almost $40 below current prices. Open interest has risen by 60 percent in the past month, making it the second most widely owned December crude put on the New York Mercantile Exchange and this does not waver me in my prediction. In fact it makes me even more bold in that prediction.
Once again we remember the attacks of September 11, 2001, a day freedom came under attack. Today the CME Group will observe the 10th anniversary of the attack on the World Trade Center. NYMEX/COMEX markets on the CME Globex will observe voluntary moments of silence at the following times.7:46 am CT/8:03 am CT/8:59 am CT/9:29 am Central Time /The CME requests that all electronic market participants refrain from trading NYMEX/COMEX products on CME Globex and CME ClearPort during these moments of silence. God Bless America.
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