Friday, February 25, 2011

Goldman Sachs expects the price of Brent crude to decline to $103.50 per barrel by the end of
2011 from the current spot price of $114.39.

$4 at the pump coincides with about $140/barrel. For Brent that’s about a 23% rise from here and for
WTI that’s about a 46% rise.

Crude margin requirements move higher – both on the CME + ICE – 1) the CME said it would
raise margin requirement on light and sweet crude oil contracts for the first time since Mar ’09; 2) ICE
said it would raise crude and gas contracts for the second time this week.
China monetary policy – Daiwa Securities says that China may slow the pace of tightening
“significantly” in the coming months – Bloomberg
Government shutdown – the White House doesn’t think a shutdown makes for good politics and
could harm the economic recovery – Politico
Several articles downplay the chances of a near-term $20B mortgage servicing settlement.
Noting that there are many players that have to sign off on a pact and all the big principles are still not
near a consensus. The WSJ says that banks have been critical of the proposed plan. – WSJ
Wisconsin - The Assembly in Madison early today voted 51-17 to pass governor Walker’s limits
on collective-bargaining power for government workers. The measure still must be considered in the
Senate, which has been unable to muster a quorum since last week after its 14 Democrats fled –
Bloomberg
Wisconsin – the governor has dispatched state troopers to help find the missing senators but so
far they have come up empty – WSJ
European bailout fund – a group of German academics that was formed last year to examine the
possibility of having the EFSF buying Eurozone sovereign debt has come out against the idea. The group
plans on rejecting the idea. – Bloomberg