Mexico

The colonel "got away", and now his "partner" is out of jail...

Saudi Arabia’s competitors from the Gulf cut their prices last month, forcing the largest OPEC producer to follow suit. Although there was little expectation of a shift in strategy, the price cut highlights Saudi Arabia’s determination to continue to pursue market share by keeping production volumes elevated. On top of that, October could be a crucial month for struggling drillers. With drillers undergoing credit redeterminations, October could see a wave of debt restructuring and cuts to credit lines, potentially forcing deeper cuts in the shale patch.

We have just witnessed one of the most significant steps toward a one world economic system that we have ever seen.  Negotiations for the Trans-Pacific Partnership have been completed, and if approved it will create the largest trading bloc on the planet.  In this treaty, Barack Obama has thrown in all sorts of things that he never would have been able to get through Congress otherwise.  And once this treaty is approved, it will be exceedingly difficult to ever make changes to it.  So essentially what is happening is that the Obama agenda is being permanently locked in for 40 percent of the global economy.

• Asian shares rise on fading Fed rate views (Reuters)
• U.S. Equity Futures Fall, Risking S&P 500 Rally as Copper Slides (BBG)
• More biotech pain, this time from the WSJ: For Prescription Drug Makers, Price Increases Drive Revenue (WSJ)
• VW Will Delay or Cancel Non-Essential Investments Due to Scandal (BBG)
• Russia Rejects No-Fly Zone Over Syria as Clerics Urge Reprisals (BBG)
• Historic Pacific trade deal faces skeptics in U.S. Congress (Reuters)
• German Factory Orders Unexpectedly Fall Amid Economic Risks (BBG)

Unfortunately, we are used to politicians saying whatever they think they need to say to be elected president, and falling way short of their campaign promises on the job. Even scarier would be the notion of selling America to the craftiest bidder. The election may be more than a year away, but isn’t it time to dig beneath the carefully crafted persona that is Trump and unearth the person and the full spectrum of his business dealings? To see the real Donald Trump is to plunge into all the conflicts of interest he denies, the financial tricks he dispenses, the crucial details he obfuscates, and the flimflam he offers up day in, day out.

The scandal swirling around Germany's largest listed company had its beginnings in an attempt to crack the U.S. market, the missing link in VW's global footprint. But, as Handelsblatt details, what began as expansion ended in deception (piecing together the events that led up to the scandal, based on the facts as they are currently known).

The signs of deflation are now flashing all over the globe and the possibility of an associated financial crisis is now dangerously high over the next few months. Our preferred model for how things are going to unfold follows the Ka-Poom! Theory, which states that this epic debt bubble will ultimately burst first by deflation (the "Ka!") before then exploding (the "Poom!") in hyperinflation due to additional massive money printing efforts by frightened global central bankers acting in unison. First an inwards collapse, then an outwards explosion.

Bill Richardson could teach Donald Trump something about the art of the deal. He has done a lot of them. At present Richardson sees one of his deals in jeopardy, and he was in Washington last week to raise the alarm, meeting privately with former colleagues and appearing at a press conference at the National Press Club. The deal in jeopardy involves a commitment he made, when he was secretary of Energy in the Clinton administration, with the Russians to dispose of weapons-grade plutonium, the long-lived ingredient in nuclear weapons.

Arctic Drilling in the U.S. is dead. After more than eight years of planning and drilling, costing more than $7 billion, Royal Dutch Shell announced that it is shutting down its plans to drill for oil in the Arctic. The bombshell announcement dooms any chance of offshore oil development in the U.S. Arctic for years.

• Commodities in crisis as Asian shares tumble and shipper files for bankruptcy (Reuters)
• Global Rout Eases as S&P 500 Futures Advance With Oil, Glencore (BBG)
• Chinese Stocks Decline Most in a Month in Hong Kong on Economy (BBG)
• India cuts interest rates by more than expected (BBC)
• Glencore Rebounds as $50 Billion Plunge Is Seen as Excessive (BBG)
• How Congress May Have Saved Goldman Sachs From Itself (BBG)

We are a scant 40 years away from the futuristic world that science fiction author Philip K. Dick envisioned for Minority Report in which the government is all-seeing, all-knowing and all-powerful, and if you dare to step out of line, dark-clad police SWAT teams will crack a few skulls to bring the populace under control. Increasingly, the world around us resembles Dick’s dystopian police state in which the police combine widespread surveillance, behavior prediction technologies, data mining and precognitive technology to capture would-be criminals before they can do any damage. In other words, the government’s goal is to prevent crimes before they happen: precrime.

Fed credibility questioned and Yellen sick - Palladium surges 8% - Russia and central banks buy gold - Smart money rebalancing and selling overvalued assets to buy depressed assets especially silver

Francis will be the first pope ever to address Congress, and as NY Times reports, a milestone in the journey of the Catholic Church in the United States. Mr. Boehner, a proud Catholic, has invited three popes over 20 years to come to Capitol Hill, with this being his first success. The papal address to the Republican-controlled Congress may make some squirm as Francis isn’t shy about tackling controversial topics or upending conventional orthodoxies about Catholics and politics — a prospect that makes U.S. conservatives especially nervous, given Francis’ insistence on raising concerns about issues such as economic justice, climate change and immigration.

In many ways, the overnight market has so far been a reversal of yesterday, when a stable Asia session (with China stocks rising) gave way to a European tumble which in turn dragged the US lower.

• Pressure builds on Volkswagen CEO as emissions-cheating probe spreads (Reuters)
• Volkswagen Emissions Scandal Relates to 11 Million Cars (WSJ)
• Volkswagen Emissions Investigations Should Widen to Entire Auto Industry, Officials Say (WSJ)
• Germany's Bosch makes VW's U.S. diesel components (Reuters)
• Volkswagen scandal will have personnel consequences - state economy minister (Reuters)
• Glencore Falls to Record as Mining Shares Lead Stock Losses (BBG)
• Despite Slump, China’s Xi Jinping Pledges Economic Reforms (WSJ)