The world is awash in oil. But price is being kept afloat by an endless string of rumors and fantasies. Today, oil is up 5% after a rumor that OPEC will announce some kind of output-limiting agreement. Really? Even if there is an agreement, since when has OPEC been able to keep it. Not since the 1970s, is the answer. This one will be no different, especially since the Saudis’ ability to finance their deficits in the US will be crippled by lawsuits any day now, as Obama’s veto has been over-ridden by the Senate (97-1) and is highly likely to be over-ridden by the House.

And the other rumor that kept Europe on the upswing overnight was that Germany would bail out the criminal enterprise known as Deutsche Bank, which is finally facing some consequences for its insane behavior. Given the current administration, it seem unlikely that Germany would ignore the EU rules limiting such bailouts and anyway it would be political suicide for Merkel. Of course the German government denied any plan for a bailout, but such denials are as likely to be true as the original rumor so the net information content of the pair is zero.

What one can say with some confidence is that it would be wise to very, very carefully consider one’s net position with respect to DB.

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