Mike, I think that all that was needed was a psychological "block" to crude ascent. I think that most people know that there is no long term "shortage" of crude if it stays above $30, since at these prices, large additional "reserves" can be exploited. I believe the same is true with the intervention in "favor" of the Euro (except that longer term, I fear the Euro has not seen the bottom). Government should act to prevent market dislocations. They cannot prevent long term trends from asserting themselves, but if they can prevent panics, riots and civil disorder, they should act. Of course the election had a role, but even without an impending election, this was, IMHO, a good move. It is no different that the Fed pumping liquidity to avoid colapse of the financial market during periods of uncertainty like the Asian flu, the Y2K fears, or the LTCM debacle.
Zeev |
