"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey
Oil prices spiked this morning (and probably over the past few months as well) on rumors that Israel was planning an attack on Iran. How much of this is true is anyone's guess. Rumor mongers now control the markets without fear from regulation.
No one can be completely sure of Iran's nuclear intentions. Clearly if their purpose is to destroy others, the matter needs to be dealt with. Since China and Russia have close ties to Tehran, I can't believe they would turn the other cheek if Iran had intentions of nuking Israel.
Oddly, China and Israel have been defendants in the court of public opinion after news broke that both countries employed spies who were accused of stealing high level secrets from the US military- Israeli Spying in America/ Fox News. For some reason, we continue to traded with China, and continue defending Israel from Middle East Muslims. I just don't get it.
Chinese Spying in US/ USA Today
Geopolitical problems in the Middle East are responsible for some of the rise in oil prices. The original problem began with supply and demand, but the supply and demand issue alone does not warrant $100++ oil at this stage of the game.
As I have said many times before, the epicenter of many economic problems begins and end with Wall Street. They were at the center of the Dotcom bubble, they are at the center of the current financial crisis, and now they are in the middle of the speculative rise in oil. Just like undisciplined kids, they just jump from one thing to the next leaving a path of destruction in their wake.
The universal sentiment on oil has turned increasingly bullish. Oddly, oil stocks are not reacting to the bullish sentiment. Near term, I am an oil bear. The headwinds at $140++ oil are strong- reduced demand, global economic slowdown, and the loud cries for smaller cars and alternatives.
As a contrarian, "Too Many People Bullish on Oil" and....To Many People are Bearish on the Financials".
