This article was published by The McAlvany Intelligence Advisor on Wednesday, February 17, 2016:
The art of jawboning has gotten such a bad reputation that even the Securities and Exchange Commission website decries it:
We deride “jawboning” as (a) government wagging a finger at business and labor to act with restraint, while government acts without restraint; or (b) government asking labor and business to do what is against their self-interest and in the public interest, which is usually ineffective, and when it works it rewards the greedy and penalizes the patriotic.
It used to work by issuing an implicit threat to accomplish a desired end. And on Tuesday, in the first few minutes of trading, traders of both stocks and oil bought the threat, causing prices to bounce higher at the open but then fade afterwards.
The threat was this, issued by the Russian Ministry of Energy following a brief meeting of worthies from Russia, Saudi Arabia, Qatar, and Venezuela: