Archive - Jun 16, 2015 - Story

In short, we have yet to see evidence that we are nearing a peak in oil production. On the contrary, agencies like EIA and IEA have predicted a stable increase in crude oil production for the next few years at least. But supplies may not be the only, or even the most important factor when analyzing the end of the oil era. The world is making progress at moving beyond oil. So instead of discussing Peak Oil in terms of supply, perhaps it is now more useful to analyze ‘Peak Demand’.

The Chinese foreign ministry is out with a statement indicating the country has nearly completed its construction projects in the South China Sea. While this could be viewed as a sign that China has effectively backed down, albeit on its own terms and at its discretion, that will likely come as no consolation to the US and its allies because even as China signaled an end to its dredging activities, it also implicitly admitted that it will continue to build military facilities on the islands.

What difference does it make? In yet another gross exposure of Hillary hypocrisy, The Guardian reports that the great savior of "everyday Americans", promising to fight for fairness for working Americans; She who proclaims $15 per hour minimum wage is fair for all, is in the midst of a 'hiring freeze' of paid organizing positions, forcing experienced grassroots campaign workers to offer their services for free, unpaid internships.  Perhaps, a rephrasing of the campaign slogan should be "do as I say, not as I do."

It’s a common assumption that governments exist in order to serve the people of a country and that in order to do so, they must be accorded the necessary evils of power and taxation. In fact, we believe the opposite is true: that in the perception of those who rule, power and the ability to exact tax are the very purpose of government, and service to the people is merely a justification for that pursuit. This condition is perennial. The world’s tax havens therefore are the economic Alamo - the last holdout against world economic domination.

The bigger they are the harder they will eventually fail... and the more taxpayer funds will be confiscated to fix them!

Presented with no comment...

Crude oil jumped (algorithmically) and then dumped (humanistically) after API reported a 2.9 million barrel inventory draw. This drawdown is notably lower than the 6.7 million barrel draw last week...

Hope may be an investing strategy in the short-term, but it is not a driver of economic growth...

Just 2 years after we first noted it, the mainstream media has become fascinated with the performance of stocks in the last 30 minutes of the US cash session - the 330 Ramp! But, as with anything that becomes widely known (apart from "never start a land war in Asia" and "stocks are always cheap"), the exuberant last 30 minute ramp has been superseded by another... Welcome to The 2am Europe Open Ramp. As Nanex's Eric Scott Hunsader notes, a stunning 22% of all S&P 500 futures gains have occurred between 2am ET and 3am ET.

"Learn about the Grexit early, kids, and don't be like those Greeks or the bogeyman will get you..."

Greek 10Y yields are breaking back above 13%, bonds ar trading at 50 cents on the dollar, Greek stocks are near multi-decade lows, and Greek bank bonds have collapsed amid the ever-more-likely Grexit (or at least redenomination amid capital controls). But, there are some very smart chaps who must know something Tsipras, Merkel, and the rest of the world does not... because they are spending "Other People's Money" to buy the dip in Greek stocks and bonds. From Allianz and PIMCO (the world's lagest Greek bondholder ex-ECB) to Putnam and Wilbur Ross, it seems more than a few American investors will be impacted should Greece really implode.

"While most are focused on the risks around a withdrawal of liquidity, we believe the biggest hit to confidence could be the opposite: if another round of US QE is necessary to prop up the economy," BofAML says, suggesting the Fed is now cornered as raising rates risks destabilizing markets and QE4 risks betraying the futility of successive central bank interventions.

Just a few months ago, we warned Brazil's economy was on the verge of collapse as the fiscal situation was deteriorating rapidly. It appears, judging by the most recent data from the oil-rich nation, that we were right. Broad retail sales have now declined for five consecutive months with the seasonally adjusted broad retail sales index now at the same level as early 2012. Core retail sales declined 3.5% YoY during April (weakest print since Aug 2003) and broad retail sales declined by an even larger 8.5% YoY (lowest on record), and as Goldman warns, the outlook for private consumption and retail sales in the near term remains very weak.