Poorer oil-producing countries which took out loans to be repaid in oil when the price was higher are having to send three times as much to respect repayment schedules now prices have fallen. But while these already poor and corrupt OPEC nations were the biggest losers, one country was a huge winner, the country that provided the billions in virtually risk-free, oil-collateralized loans to any country that requested them. China.
French police used water cannons and tear gas to break up a picket that was blocking access to a large oil refinery in the southern port area of Marseille, as Prime Minister Manuel Valls told the unions that "enough is enough." Valls went on to say that if labor unions continue to picket and disrupt fuel supplies, that they would be dealt with "extremely firmly."
- Asian stocks near 11-week lows, dollar bounces on Fed rate view (Reuters)
- Poll Finds Lack of Enthusiasm for Clinton and Trump (WSJ)
- Oil falls for fifth day as focus returns to growing exports (Reuters)
- The Hedge Fund That Couldn't Stay Open Long Enough for a Big Payday (BBG)
- French police break up refinery blockade in anti-reform showdown (Reuters)
There will be no more discussion as to whether or not humans are contributing to climate change in the Portland, Oregan public school system, as the school board plans to ban all material that denies the existence of man-made climate change. Although the topic is still being heavily debated within the scientific community, young and impressionable students will now only receive the politically correct side of the issue. ‘Man is causing climate change, no questions asked.’
Earlier this week, Goldman unleashed the latest oil rally when it admitted that while the oil market will take far longer to rebalance due to rising low-cost oil production, it said that material supply disruptions are providing a boost to near-term prices. Goldman provided the following visualization of unplanned ongoing outages where it highlighted the recent stoppages in Canada, Nigeria and Libya as the most prominent. But in a surprising twist, it appears that virtually all three of the main disruptions choke points are being resolved far quicker than expected.
After yesterday's algo-driven mad dash to close the S&P green both for the day and for the year following Fed minutes that came in shocking hawkish, the selling has continued overnight, led by the commodity complex as rate hike fears have pushed oil back down some 2% from yesterday's 7 month highs, which in turn has dragged global stocks lower to a six-week low, while pushing bond yields higher across developed nations as the market suddenly reprices the probability of a June/July rate hike.
XOM is trading as a Bond in this yield chasing QE inspired Central Bank World, and FB is your classic momentum stock
Global stocks have started Friday the 13th on the wrong foot, with not only Hong Kong GDP unexpectedly tumbling by 0.4%, the worst print in years while retail sales fell for a thirteenth straight month in March, the longest stretch since 1999 as the Chinese hard landing spreads to the wealthy enclave, but also following a predicted collapse in Chinese new loan creation, which will reverberate not only in China but around the globe in the coming weeks. The latest overnight drop in the Yuan hinted that should the recent USD strength continue, China will have no choice but to repeat its devaluation from last summer and winter.
As Facebook nears the size of Exxon Mobil, Google has just topped Apple (for the first time since Dec 09) as the biggest company in America...
Wall Street’s cockeyed faith that another stock market bailout is on the way rests on the idea of a post-election return to fiscal stimulus - since even the casino punters now see that the jig is up on ZIRP, NIRP and QE. Here’s the problem. When General (Paul) Ryan gets together in the oval office with either Hillbama or the Donald next February the budget projections will already be deep in trillion dollar deficits under current policy. Therefore what will get stimulated, if anything, is a colossal political firestorm over who bankrupted the nation. There will not be another fiscal stimulus this go round. This time the frogs of Wall Street will be left to boil.
M. King Hubbert did more to raise awareness of the finite nature of global oil reserves than any other person, living or dead. He was a larger-than-life figure, who fought tirelessly to insert the limits of nature into the national dialog regarding the strategic use of resources. Yet surprisingly little has been publicly documented about the man, even though we are hurtling ever faster into a future shaped by the very limits he warned about.
Central bankers have the unchaperoned power to create the greatest fortunes ever known to mankind at will and to invest that money wherever they want. With trillions of dollars at their disposal and trillions more whenever they want to conjure it into existence, what is to stop them from controlling the oil market just as they have stocks and bonds?
Following yesterday's Yen surge in the aftermath of the disappointing BOJ announcement, the pain for USDJPY long continued, with the key carry pair tumbling as low as 106, the lowest level since October 2014 before stabilizing around 107, and is now headed for its biggest weekly gain since 2008, which in turn has pushed the US dollar to to its lowest close in almost a year as signs of slowing growth in the U.S. dimmed prospects for a Federal Reserve interest-rate increase. As a result, global stocks fell and commodities extended gains in their best month since 2010.
- Trump, Clinton press closer to general election showdown (AP)
- Acela primaries: Winners, losers (Hill)
- Trump Says He's `Presumptive Nominee' as Clinton Wins Four (BBG)
- In the battle for Hollywood endorsements - and cash - Clinton rules (Reuters)
- U.S. Oil Rises Above $45 a Barrel for First Time Since November (BBG)
- Spin: Near-Zero Growth Happens Often in Slow-Motion U.S. Economy (BBG)
For those who thought that the world's biggest company losing over $40 billion in market cap in an instant on disappointing Apple earnings, would have been sufficient to put a dent in US equity futures, we have some disappointing news: with just over 7 hours until the FOMC reveals its April statement, futures are practically unchanged, even though the Nasdaq appears set for an early bruising in the aftermath of what is becoming a disturbing quarter for tech companies. Instead of tech leading, however, the upside has once again come from the energy complex where moments ago WTI rose above $45 a barrel for the first time since November after yesterday's unexpected 1.07 million barrel API inventory drawdown.