The rise and fall of great powers and their imperial domains has been a central fact of history for centuries. It’s been a sensible, repeatedly validated framework for thinking about the fate of the planet. So it’s hardly surprising, when faced with a country once regularly labeled the “sole superpower,” “the last superpower,” or even the global “hyperpower” and now, curiously, called nothing whatsoever, that the “decline” question should come up. Is the U.S. or isn’t it? Might it or might it not now be on the downhill side of imperial greatness?
The news from the recent St. Petersburg Economic Forum, which took place from June 18 to 20, inspired a torrent of speculation on the future direction of energy prices. But the real buzz at the conference was the unexpected but much publicized visit of the Saudi Deputy Crown Prince, as an emissary of the King. The unusually high level delegation from a long-time ally and protectorate of the U.S., like Saudi Arabia, visiting a Russian sponsored economic conference, in a country sanctioned by the U.S. was news enough but could be the first sign of an emerging partnership between the two greatest global oil producers.
- Chinese stocks tumble again, ignoring Beijing's blandishments (Reuters)
- Plight of Greek pensioners heaps pressure on Tsipras (Reuters)
- Cash Crunch Hits Everyday Life in Greece (WSJ)
- Souvlakis Tell a Story Well Beyond Today's Greek Crisis (BBG)
- Greek Referendum on Bailout Too Close to Call, Poll Shows (BBG)
- Move Over Greece: For Treasuries Traders, Today Is About the Fed (BBG)
- ECB adds corporate names to QE-eligible bonds (FT)
- Special Report: How Greece went bust (Reuters)
- Puerto Rico’s Pain Is Tied to U.S. Wages (WSJ)
If it was Greece's intention to crush the Chinese stock market instead of Europe's, well - it succeeded. Because despite the PBOC and politburo throwing everything but QE at the stock market, China stocks closed down sharply on Thursday after another wild trading day as investors shrugged off regulators' intensified efforts to put a floor under the sliding market, by cutting trading fees and easing margin rules, which has now crashed 25% in about two weeks wiping out $2.5 trillion of the peak $10 trillion in Chinese stock market cap as of June 14. This ultimately resulted with the Shanghai Composite closing under 4000 for the first time since April.
A Short History: The Neocon "Clean Break" Grand Design & The "Regime Change" Disasters It Has FosteredSubmitted by Tyler Durden on 07/01/2015 22:30 -0400
To understand today’s crises in Iraq, Syria, Iran, and elsewhere, one must grasp their shared Lebanese connection. This assertion may seem odd. After all, what is the big deal about Lebanon? That little country hasn’t had top headlines since Israel deigned to bomb and invade it in 2006. Yet, to a large extent, the roots of the bloody tangle now enmeshing the Middle East lie in Lebanon: or to be more precise, in the Lebanon policy of Israel.
Despite the fact that even the U.S. government itself has admitted that it was funding terrorists– directly and indirectly through Saudi Arabia, the suggestion was met with disbelief, ridicule, or either entirely ignored. Now, however, the United States government has admitted that it funds terrorists on the ground in Syria yet again, this time placing an individual dollar amount on the assistance provided.
Beginning July 1, drivers in Idaho, Georgia, Maryland, Rhode Island, Nebraska and Vermont will be charged more at the pump as a result of laws taking effect at the start states' new fiscal year.
As we recently noted, Russia and Saudi Arabia appear oddly allied in recent weeks. What happens when two nations, that together account for more than fourth quarter of global oil production, begin collaborating on future energy projects?
We have argued that as economic ties between China and Russia deepen Beijing could increasingly look to Moscow to meet China’s energy needs. This would of course only serve to further de-dollarize the global energy trade, dealing yet another blow to the petrodollar system. Sure enough, Russia has, for the first time in history, overtaken Saudi Arabia as China’s top oil supplier.
Before taking a look at Europe, an update on China. Just a few short hours ago, when looking at the bursting of the Chinese bubble where stocks were down between 3% and 5% across the board in the first post-holiday trading session after the worst week in 7 years, we said that "without assistance (levitation) from the same PBOC that just clamped down on liquidity, the China bubble has burst." And then as if by request, minutes later we got, drumroll, levitation and the stickiest stick-save by the PBOC seen in months, when the Shanghai Composite staged an unprecedented 7% surge from the lows to close 2.2% higher after tumbling as much as 5% earlier in the session. And just like that, faith in the "wealth effect" is preserved.
In principle, there could not be a more spectacular game-changer-in-waiting. A royal Saudi caravan offering tribute, in the form of incense, gold and myrrh (or higher oil prices)? No one knows, yet, how this will play out in the New Great Game in Eurasia, of which a major spin-off is Cold War 2.0 between the US and Russia. Putin and King Salman – very discreetly — had been in touch over the phone for weeks. The King’s son invited Putin to Riyadh. Accepted. Putin invited the King to Moscow. Accepted. But is this real life? Or smoke and mirrors? Who's allied with whom?
On Monday, Saudi Arabia celebrated the beheading of its 100th prisoner this year. The story was nowhere to be seen on Arab media despite the story's circulation on wire services. Even international media was relatively mute about this milestone compared to what it might have been if it had concerned a different country. How does a story like this go unnoticed? Today's release of the WikiLeaks "Saudi Cables" from the Saudi Ministry of Foreign Affairs show how it's done.
"Both the US and China have a vital interest in reaching an understanding because the alternative is so unpalatable," Soros wrote in an article for the New York Review of Books, with the danger imminent if Chinese economic reforms fail forcing President Xi Jinping to "foster some external conflicts to keep the country united and maintain himself in power." These "conflicts" would present themselves in the form of a Sino-Russo alliance which could draw the entire world into war.
The world is on the brink of the longest-lasting oil glut in at least three decades and OPEC’s quest for market share makes it almost unavoidable. Oil supply has exceeded demand globally for the past five quarters, already the most enduring glut since the 1997 Asian economic crisis, International Energy Agency data show. But as WolfStreet.com's Wolf Richter warns, if Iran and world powers reach an accord on the Islamic Republic’s nuclear program by their June 30 deadline, we’ll be watching the most magnificent oil glut ever building up into next year.