- Hirschhorn: Greed...or Fear
- Schork Oil Outlook: Some New Hope For Nat Gas Bulls
- Insights for Growing the Economy: the State of Entrepreneurship
- Tamminen: California Is At It Again
- Dorn: Trading Secrets and Serendipity
- Schork Oil Outlook: Falling Demand and Falling Production—The Race is On
- Busch: Ron Paul Fed Day
- Geithner Tells Banks To Make More Risky Loans?
- Farr: It Can Go Higher
- Jon Henes: Evolution From Trader to Owner - The Making of the Private Equity Hedge Fund
MOST SHARED
- How Stock Investors Can Play Holiday Travel
- Time Lapse World Series Is A Great Play
- Hirschhorn: Greed...or Fear
- My Top 10 Tech Toys for the Holidays
- iPhone a Better Gaming Platform Than Android?
- May Day For Dendreon
- 100% Mortgage Financing From USDA
- Holiday Tipping: Who And How Much
- Deep Discounts Should Make It a Very Tech-y Holiday
- Health Care Bill Nears Test Vote
- Thanksgiving Week Stuffed With Economic News
- Black Friday Deals May Not Signal Retail Comeback
- Victoria's Secret Hopes to Rekindle Desire for Lingerie
- UPS Sets New Rates For 2010
- Wall Street Jobs Slow to Return Despite Record Profits
- Investors to Goldman: Be Less Greedy
- Senate Panel to Mull Bernanke Nomination On Dec. 3
- $6M Verdict Upheld in McDonald's Strip Search Case
RSS FEED
CNBC Guest Blog
Text Size 
If Barrack Obama wins the presidency, the price of oil could fall by $40 per barrel. The financial markets will discount the possibility before hand, at least partially. There are three ways in which this could happen:
1) As was the case during the Clinton administration, Obama might be more inclined to intervene in the foreign exchange market to support the value of the dollar. The U.S. has not intervened in the FX market since Treasury Secretary Robert Rubin did so in September 2000 when the Treasury sought to support the Euro, then costing about 80 cents per dollar (yes, the cost has almost doubled since then). Intervention or the threat of intervention could shave $20 off the price, based on the divergence in price between oil quoted in dollars versus that of other currencies.
2) Obama will speak in a more concilatory tone toward nations in the Middle East. If he does, some of the risk premium would likely be extracted from the oil price.
3) Energy conservation and investment in energy infrastructure are likely to increase if Obama wins, as it will be part of his mandate. Announcements of a nationwide effort to both decrease consumption and increase the supply of energy would have an announcement effect on the energy markets, lowering energy prices and burning speculators.
Points 2 and 3 are probably the most bankable ideas, but the mere threat of point 1 is still enough to impact the markets.
More: Click for Latest Economic coverage ...
__________
Tony Crescenzi is the Chief Bond Market Strategist at Miller Tabak + Co., LLC where he advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. Crescenzi makes regular appearances on financial television stations such as CNBC and Bloomberg, and is frequently quoted across the news media. He is also the co-author of the just-revised "The Money Market" and "The Strategic Bond Investor."
Data is a real-time snapshot *Data is delayed at least 15 minutes