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The market for oil field equipment is tight with 90% utilization, making it harder for larger oil producers to drill more oil wells for shale oil in the US. Large US shale oil producers reduced production when oil prices plunged and did not come back leaving smaller oil producers to increase production as prices went back up in 2021. Oil prices are now expected to reach $100 per barrel for the first time since 2014.  Saudis and Russia are not expected to increase production say experts. The possible Russian invasion of Ukraine and shortage of energy supplies is also a factor. Oil demand in the US and Europe has rebounded with milder covid-19 from Omicron variant and fewer lockdowns. Automobile use is also up in the US with November showing 12% increase in miles driven over the prior year, according to the Federal Highway Administration. Low inventories and resilient demand, and low spare capacity will keep prices surging to $100 from today's price of Brent crude oil at $89 in January 2022.   ...

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This article by General James Jones is the second from the highest ranks of the Obama administration, saying the entire Middle East policy of U.S. president Obama was flawed and could lead to dangerous consequences. Gen. Jones, former National Security Advisor to Obama 2009-2010, says the situation today is worse than in 1991 when the U.S. launched Operation Provide Comfort to protect Kurdish refugees in Northern Iraq from Saddam Hussein, with an engagement of about 5 years and 25,000 Allied troops. Jones says the crisis in Iraq and Syria is of an order several times worse than 1991 and at any time since the 2003 invasion, as it involves the setup of a terrorist ISIS state in the heart of the Middle East. What went wrong? Jones says all the warnings from other Middle East nations about Maliki's corrupt policy and sectarianism used to stay in power turned to be true. Even Maliki's own advisors and colleagues say in a separate report by Matt Bradley that Maliki battled not for the Iraqi state but only to preserve his own power. Jones calls the U.S. president's decision not to act in Syria when the "red line" of use of chemical weapons was crossed, the failure to maintain a limited military training presence in Iraq after 2011, and not insisting that Mr. Maliki arm the Kurds, as having gravely aggravated the problem in 2014. Jones calls for arming the Kurds directly with sufficient weaponry for defending their region and providing immediate expanded aid to the Abadi government, appointment of a special envoy to ensure direct and immediate communications with Baghdad and with Kurdish, Sunni and Shiite leaders. He calls also for close air support of Iraqi and Kurdish operations, and an aggressive diplomatic effort to unify the Middle Eastern nations to remove ISIS from the region. Jones says this is the right thing to do in the name of all the Iraqi people yearning for peace, for the U.S. service personnel who made sacrifices in Iraq for 23 years, and for U.S. national security....

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China's negotiator He Lifeng and China's strategy in negotiations with the US on trade.

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Two realities are affecting exchanges. One is that trading commodities and derivatives is a $600 trillion business worldwide and is more profitable than trading in corporate shares. This shows in the value of ICE and NYSE in the stock market. In April 2011 ICE was valued at $1.5 billion less than NYSE, in Dec 2012 ICE was valued at $4 billion more that NYSE as it makes its bid to merge with NYSE. The other is that the Dodd-Frank financial system overhaul in the U.S. after the 2008 financial crisis has created a new model for derivatives trading providing advantages to regulated electronic exchanges and clearinghouses that handle derivatives trades with transparency. Jeffrey Sprecher, CEO of ICE, the IntercontinentalExchange, which handles derivatives trading through its clearinghouse operations, says: "For the past decade, our solutions made our markets increasingly electronic and increasingly clear. Today, financial reform is imposing that vision on many markets through a rule-making process." Bart Chilton, a member of the CFTC which regulates derivatives trading says Dodd-Frank legislation supports the business model of derivatives exchanges. This is especially true for Mr Sprecher and ICE. Sprecher has a good relationship with regulators with whom he talks directly, and is supportive of CFTC efforts to close loopholes as he is confident he can make money as long as the rules are clear. His confidence stems from his model which is technology based from day one, with its own clearinghouse and technology based transparency of the ICE data vault, information it shares with regulators. Sprecher stumbled upon this opportunity. He is an executive in the power industry. Working on developing power plants Sprecher found it was difficult for power firms to hedge investments in energy with financial contracts because there was no well organized, clear and transparent market for such contracts. This he set out to do by buying a little know exchange in Atlanta for buying and selling electricity, later getting the the backing of BP, and investment banks such as Goldman Sachs and Morgan Stanley, to form ICE in 2000. Banks liked the idea of a having an organized clear place to buy and sell derivatives in oil and other commodities, and having an alternative to the Chicago Mercantile Exchange in futures trading. Swaps trading under Dodd Frank supervision is converting to old style futures contracts where there is less competition for ICE's futures trading creating new opportunity. ICE setup its own clearinghouse, and acquired the Clearing Corporation, which was the base for a derivative called credit-default swap. To make derivatives trading transparent and reduce systemic risk Dodd-Frank legislation required exchanges to provide information to data warehouses which would then share the information with regulators. ICE setup its own data warehouse to do this called ICE Trade Vault. Dood-Frank rules envisioned the formation of clearinghouses and exchange such a ICE to provide a clear process, transparency and reduce systemic risk in derivatives trading. ICE under Sprecher by making this vision its own and using technology has created new opportunity. ...

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Ajami points out the risks of the deal secularists and liberals in Egypt have made in calling on the military to upset the elected government of prime minister Morsi. The liberals and the Muslim Brotherhood were both equally opposed to the military and police intervention in politics in the period following Mubarak's ouster. The six decade rule of the military in Egypt has little to show for it in the modernization of Egypt and improving economic conditions. Egypt has seen this script before, says Ajami of the Hoover Institution- in 1952 the military stepped in after corruption in the political parties and political violence. The results were dismal extending throughout the period of modernization in Asia and Latin America. It has left Egypt frightfully behind in most dimensions of education, healthcare, and technological progess. The lack of training in parliamentary and democratic governance, and in the institutions of democracy are painfully evident- the poor roadmap for democracy laid out by the military, followed by the election, the decrees and authoritarian style critics describe of prime minister Morsi in failing to incorporate liberal opinion in policy, and the flawed secularist calls for the military to overturn the elected government with only one year in office. These institutions will take a long time to build and require patience, flexibility and the gift of wisdom on all sides....

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Pearlstein argues that the US and the Obama administration achieved most of its goals, even though the Europeans took the credit. On regulatory reform, Geithner's regulatory reform proposal he says, could well have been written at the French Finance Ministry, as at the US Treasury. And it gives Obama ammunition to prepare, as private equity, hedge funds, and banks try to water down his proposals for regulatory reform. By having member countries commit to adding $850 billion to the resources at the IMF, and regional development banks to provide help to countries in serious difficulties- and giving instructions that the money can be used not only for debt rollover, bank recapitalization and balance of payments support, but also for stimulus spending, infrastructure investment, trade finance and social support- the Obama adminstration has accomplished a great deal. It has succeeded in putting in place the necessary financial resources to support not only the financial systems of countries in Eastern Europe, Asia and Latin America that need help, but put emphasis on the need for resources to go for helping reduce job losses, create jobs, and provide some forms of income or support to people in these countries. This is a major step as it means the countries of Eastern Europe and other developing countries can deal with their crises in confidence. Mexico is taking loans from the IMF. Dominique Strauss Kahn had begun the policy of shifting IMF's focus to these social goals as significant parts of the recovery process in countries, but he faced the old mindset among the IMF staff, as when its reported staff wanted to increase interest rates in Pakistan by 10% instead of the 3% that was finally agreed to. That would have caused serious difficulty to the people of Pakistan, created chaotic situation and disturbed the social fabric of that country. See the link to this for S. Korea and for Pakistan. And as Gordon Brown put it the old conditionality that lay behind the IMF loans, is phased out. This makes it the new policy at the IMF backed by the G20 mandate. The Washington consensus which prescribed open borders, floating exchange rates and fiscal prudence is now ended. And to support this change the developing countries will have a bigger say in IMF policy and decisions. ...

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The political risk in China as the change of leadership takes place in 2012, and with the removal of Chongqing party chief Bo Xilai. The slowing of manufacturing activity and slowdown in growth expected in 2012-2014. Export growth declines to 6.8% from 14.2% in the fourth quarter of 2011. Quarterly surveys by the central bank shows demand for loans is dropping. And the HSBC purchasing managers index shows a reading of 48.1 in March, declining from 49.6% in February, showing shrinking manufacturing activity in China- anything less than 50 means contraction is taking place.

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For decades the auto companies lobbied vigorously against stricter fuel efficiency standards. NYT editorial points to this failure in policy of the Detroit automakers, and the failure of Congress to do more for fuel efficiency standards with lobbying from automakers even in the recently passed legislation. That target of 35mpg fleetwide for 2020, a low target with no stretch or imagination built into it should be revised and a higher target set. If the companies build smaller cars like Europe does they could reach a target of 50mmpg fleetwide by 2020. That would be a serious target with stretch built into it. Tough conditions have to be atttached to any rescue money. This includes firing top management, no payment of dividends, limits on executive pay, tougher fuel efficiency target, reopening labor agreements on pay and benefits to reflect the new realities. If taxpayers are going to take the risks Congress must insist on these changes or the money will be wasted says the NYT editorial. Some of these steps would be painful for workers but they are necessary....

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A chance to look at the birth of the universe 3.5 billion years ago. What was there before Brahma's thousand yugas and farther back in time to creation of the universe.  How are such images taken by the Webb telescope? What is a light year and what does it mean to say that the images shown here are 13 billion light years away. Hint: A light year is how long it takes for light to reach us from the vaccuum of space far out in the skies. Light travels at 186,000 miles per second. In one year it has travelled 6 trillion miles through the vacuum of space. For these most distant objects detected by the Webb telescope, the particles of light have traveled some 13 billion light years, traveling across space for 13 billion years. It tells what the distant objects were like 13 billion years ago.  The light of a thousand suns mentioned in the Bhagavad Gita is not just a metaphor. When on sees the immensity of space everything down here on earth looks insignificant before the Creator. ...

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Ben Gvir's Religious Zionism party sees a surge of support in Israeli elections to come in third place. Mr. Netanyahu's Likud bloc party leads with a majority of seats in parliament in Israeli elections.

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What does a second term for Ursula Von der Leyen mean for the European Union. DW.com looks at what this means for China, other parts of Europe, and the rest of the world.