Archive - Apr 14, 2015 - Story

This is not a government of the people, for the people, by the people. It is a government that takes from the people. By any means necessary. And they grow bolder with each passing day.

To maintain its hegemony, the U.S. must by all means prevent the emergence of rival powers and impede possible current as well as future threats that could emanate from oil states. The ideal condition for enforcing its own goals at a low cost would be the fragmentation of antagonistic power centers through ethnic and religious strife, civil wars, chaos and deep-seated mistrust in the Middle East – always following the well-known premise of ‘divide and rule.’ In fact, we are currently experiencing tremendous changes towards such a chaotic state of affairs.

“The biggest worry of the buy side around the world is that there has been a dramatic decline in liquidity from the sell side for many fixed income products,” Prudential's David Hunt tells Bloomberg, echoing Jamie Dimon and confirming what we've been shouting about for years.

Neither Russia nor China is an imminent threat to the US, but a cataclysmic event is looming in the economic front, one which will forever change the perception of America by the rest of the world; or how we, Americans, perceive ourselves. It’s back to what that great cartoonist (and sociopolitical commentator), Walt Kelly, told us a half century ago as America struggled during the Vietnam War:

“We have met the enemy and he is us.” 

As the ongoing collapse in economic productivity continues in America, and Alan Greenspan's concerns grow, the call for an end to the diversion of corporate spending to instantly shareholder-friendly actions comes from an unusual source. Larry Fink - CEO of the largest asset manager in the world - has unleashed a letter to 500 CEOs around the world  - telling them that "the effects of the short-termist phenomenon are troubling both to those seeking to save for long-term goals such as retirement and for our broader economy,” bucking the dividend/buyback trend that investors are demanding. As NYTimes notes, the shortsightedness that pervades corporate America is just a symptom of a larger issue. "This is not just a corporate problem," Fink explains, "It's a societal problem, we’re currently living in a "gambling society."

If Intel had used its tax rate and share count from last quarter, it would have missed Wall Street consensus. Instead it beat by 1 cent. This is how it did it.

After last week's record inventory build, it is perhap sno surpriose that API reports a 2.6mm build (below expectationsfor a mere 3.5mm bbl build). If this is confirmed by DOE data tomorrow, this will be the 14th week in a row - the longest streak on record. More importantly, the Cushing inventory build rose more than last week (+1.3mm vs +1.2mm) -  this is the 18th week in a row of inventory builds at Cushing (which is now over 90% full - 70.8mm bbl capacity).

Congratulations Active Managers: thanks to the Federal Reserve, also known as the Chief Risk Officer of the S&P 500, which has made any market risk a thing of the past, your underperformance relative to benchmarks over the past decade is now a 1 in 130,000 years event.

Something is off: either US oil production is set to tumble, leading to another junk bond, and equity, rout among the energy companies (which as noted earlier are now trading at a near record high 32x forward PE), or oil production will continue rising and lead to another steep drop in prices, because without a dramatic pick up in demand, all this extra oil is merely piling up in Cushing and in various other storage hubs around the country, where it is merely awaiting for the tiniest increase in oil prices before hitting the market.

In just six short months, expectations for US economic growth in Q1 2015 has been slashed by more than half (from 'trend' 3% to a mere 1.4% growth this week). While consensus is still well above the Atlanta Fed's 0.1% forecast, the sell-side is rapidly being forced to admit it's not just the weather...

Water and energy have a symbiotic relationship. Energy is needed to move water to people and businesses. Water, in turn, is necessary to produce energy. But how much...

The Russian President tops TIME's 100 most influential people list even as 60% of voters were Americans. Guess where President Obama landed...

The EIA's annual energy outlook has something for everyone as it attempts to forecast energy markets out to 2040. For the bears, US crude oil production is expected to rise (even more than they had forecast last year - before the price collapse) as it seems, according to EIA the only thing more stimulative for oil production than high prices is low prices. For the bulls, EIA exuberantly forecasts prices soaring to over $240 by 2040 in a high growth environment. Crude prices are dipping modestly from their ramp highs.

Hillary rose to fame delivering an idealistic commencement address at the beginning of her career. But like the generation she represents, she has betrayed those grand ideals over a lifetime of compromise, expediency, self-promotion and complacent acquisition of power, wealth and fame. She doesn’t deserve another stint at the podium - let alone the bully pulpit.