Following the last 5 weeks slowing pace of decline of rig counts (with Wyoming and Pennsylvania regions actually adding marginal rigs), and the rise in crude prices, Baker Hughes reports the slowing pace of decline continues. Total rig count dropped 6 to 888 - the smallest decline since Decmber 5th. Texas' Eagle Ford region added 1 rig. Crude's initial reaction (after its v-shaped dump-and-pump this morning off $59.50 support again) was higher margionally but that quickly faded.
Bull markets don’t end all at once. Generally a few egregiously-overvalued sectors blow up first and are dismissed by most observers as aberrations. Instead, they turn out to be a sign of things to come. In the previous decade’s bubble it was subprime housing that led the way, while being initially characterized by experts as too small to matter. Click here for Ben Bernanke’s ongoing attempts to convince the world to relax and ignore housing’s problems. This time around we of course won’t know until after the fact which sector is the canary in the coal mine. But these epic fails in the bubbly social media/online marketplace region of tech certainly look like viable candidates.
- Bonds Extend Global Rout as Europe Stocks Slide, Dollar Weakens (BBG)
- Verizon Communications to Buy AOL for $4.4 Billion (BBG)
- Fresh Nepal earthquake kills dozens, triggers panic (Reuters)
- Sen. Shelby to Unveil Legislation Heightening Fed Scrutiny (WSJ)
- Bill Gross: The Amount of Money I'll Give Away 'Is Staggering, Even to Me' (BBG)
- U.S. rejects notion that Gulf rulers snubbing Obama summit (Reuters)... what about AIIB?
- In Asia, Debt Market Gets Tougher (WSJ)
- Iran’s Mahan airline defies sanctions in shadowy aircraft deal (FT)
Putting Uber's latest valuation in perspective, according to CapIq there were just 95 companies in the S&P500 with a market cap over $50 billion, suggesting Uber which did not exist when Lehman filed for bankruptcy, now has a market capitalization greater than 80% of the S&P. Specifically, at a $50 billion valuation, Uber is more "valuable" than FedEx, Marck, Deutsche Bank, General Dynamics, Nissan, Time Warner, Yahoo, Credit Suisse, Heineken and many other companies.
- Full picture of Clinton charities' foreign government funding remains elusive (Reuters)
- Greece Readies for Another Week of Deadlines (BBG)
- Greece says deal will be 'difficult' at Eurogroup meeting (Reuters)
- Saudi Arabia’s Rulers Snub Arab Summit, Clouding U.S. Bid for Iran Deal (WSJ)
- Saudi Aramco Said to Plan Spending $80 Billion Overseas (BBG)
- The $900 Billion Influx That’s Wreaking Havoc in U.S. Bills (BBG)
- Cameron rules out another Scottish independence vote (Reuters)
- Banks Prep Defense for Anti-Wall Street Campaigns (WSJ)
Peel back the layers of the TPP and you’ll find what some believe to be a “corporate Trojan horse.” Disguised as “free trade,” the TPP’s provisions and tactics undermine Constitutional safeguards and national sovereignty. But there’s also a silver lining. The TPP exposes who, in the marbled halls of political power, is working for whom. It forces politicians to put their cards on the table, and by their hands you will know them. Packaged as a gift to the American people that will renew industry and make us more competitive, the Trans-Pacific Partnership is a Trojan horse. It’s a coup by multinational corporations who want global subservience to their agenda. Buyer beware. Citizens beware.
In welfare state America its virtually certain that through one artifice or another taxes will go up and the national debt burden will rise to crushing heights in order to keep the baby boomers’ entitlements funded. While Keynesians and Wall Street stock peddlers are clueless about the implications of this - it actually doesn’t take too much common sense to get the drift. Namely, under a long-term path of fewer producers, higher taxes and more public debt, the prospects for rejuvenating the previous historically average rates of real output growth are somewhere between slim and none - to say nothing of the super-normal rates implied by the markets’ current bullish enthusiasm.
The system can certainly be given some sort of name, but a functioning democracy it’s not. If anything, a democracy is “A system of government in which power is vested in the people”. Makes us wonder how many clients of the 421 foodbanks and counting have voted Conservative and figured they were proudly doing their democratic duty.
As with everything in life, there are winners and losers, and the recent rout in the oil market is no different. The four flip sides below should be closely monitored in the coming months, for the oil market will be impacted by these factors – regardless of if they change their tune, or become a broken record.
Forget about Peak Oil, the new buzzword is Peak Demand. In short the oil market is a declining business over the next 50 years ....
"The War on Cash is the attempt by governments to phase cash out of their economies. Governments hate cash because they hate the financial privacy cash makes possible. And they prefer that you keep your money in a bank to help prop up an unsound fractional reserve banking system." As Ron Paul warned, “The cashless society is the IRS’s dream: total knowledge of, and control over, the finances of every single American.”
The world oil market is undergoing a fundamental structural change in response to expensive oil. Producers are trying to survive by limiting expenditures. While analysts have been focused on rig counts, deferred completions have emerged as the initial path to lower U.S. oil production. This unanticipated outcome suggests that others may follow. While everyone is waiting for higher oil prices and for things to return to normal, what we may be witnessing is the end of normal.
- Marchers protest police violence in Baltimore, New York (Reuters)
- Majority of Financial Pros Now Say Greece Is Headed for Euro Exit (BBG)
- Greece signals concessions in crunch talks with lenders (Reuters)
- Greece, Euro-Area Partners Target Deal by Sunday (BBG)
- Iglesias Says EU Risking Right-Wing Backlash With Greek Pressure (BBG)
- Student-Loan Surge Undercuts Millennials’ Place in U.S. Economy (BBG)
- Majors’ Quandary: Why Drill for Oil When They Can Buy Somebody Else’s? (WSJ)
- Maryland Governor Calls in National Guard to Control Baltimore Riots (BBG)
- Fed Seen Delaying Liftoff to September to Push Down Unemployment (BBG)
- Nepal PM says toll could rise to 10,000 (Reuters)
- China Readies Fresh Easing to Tackle Specter of Debt (WSJ)
- ‘Damned Lies’ Threaten to Overshadow U.K. GDP in Election Fight (BBG)
- Uncertainty Over Impact of a Default by Greece (NYT)
- Why the Cost of Hedging European Banks Stocks Has Soared (BBG)
- Carinthia cash crunch gives Austria its own mini-Greece (Reuters)
Following yesterday's early MNI rumor that a Chinese QE is being "considered" and which sent the Shanghai Composite surging 3% and led to an initial boost in US stock futures, overnight the PBOC scrambled to once again deny such speculation. Of course, going full "cold Turkey" on Chinese stimulus would be too much for the market to handle, so in a piece by the WSJ also released overnight, the author said the PBOC would pivot from outright QE to mere LTRO, which is also not new and was reported over a week ago here in "China Floats QE Trial Balloon, PBoC May Launch LTROs." In any event, for now at least, Asian stocks are not happy despite Apple's latest blockbuster results, and neither is Europe, with the Stoxx 600 down 1%, and even the E-mini is hugging 2100 unable to levitate on any imminent central bank intervention.