What if...?

The US and European embargo of Iranian oil is one of the factors behind the stubbornly high price of crude, trumping the huge slump in petroleum demand in the US. Although Iranian oil exports are down 33%, Iran is on a course for its third largest oil-related earnings ever. Thus, the primary beneficiary of high oil prices is Iran. Rather than blame himself for the absurdity of the situation, president Obama blames oil speculators. High Oil Prices Shield Iran From Sanctions

I'D LIKE to express a bit of disagreement with my colleague's assessment of the European Central Bank's recent behaviour. He writes:

  Those EU leaders who have yet to be implicated in scandals are not faring much better than their more corrupt counterparts. In France, socialist Prime Minister Francois Hollande, has proven yet again that socialism doesn’t work by chasing after the wealthy and trying to grow France’s public sector… when the public sector already accounts for 56% of French employment.  

By Robert Guttmann, Professor of Economics at Hofstra University and a visiting Professor at University of Paris, Nord. Cross posted from Triple Crisis

While the market levitation courtesy of the Fed, BIS and BOJ continues unabated to give the impression that all is well, allowing empty momentum-chasing chatterboxes to say that Cyprus is not a big deal because... well, look at the market (and real traders the chance to quietly dump existing risk positions), the artificial, centrally-planned calm during the storm may be ending.

Over the last few months, Europe seemed to be proving its doubters wrong. Thanks to a timely intervention by European Central Bank President Mario Draghi in mid-2012, yields on Spanish and Italian bonds, which had been spiking towards levels that threatened to topple them into costly bailouts, had receded to more tolerable levels and calm was restored to jittery financial markets. The European Union crept towards the greater integration that is the only true route out of the debt crisis by agreeing to form a banking union in December.

Over the last few months, Europe seemed to be proving its doubters wrong. Thanks to a timely intervention by European Central Bank President Mario Draghi in mid-2012, yields on Spanish and Italian bonds, which had been spiking towards levels that threatened to topple them into costly bailouts, had receded to more tolerable levels and calm was restored to jittery financial markets. The European Union crept towards the greater integration that is the only true route out of the debt crisis by agreeing to form a banking union in December.

A collapse of the euro will not benefit any of the 17-member currency zone's members and struggling euro zone members must instead focus on getting their finances in order to restore stability, Austrian finance minister Maria Fekter told CNBC.