Toyota

What The Oil And Gas Industry Is Not Telling Investors

There are very real threats to the business models of oil companies, threats that need to be explained to investors, according to a new report by Carbon Tracker. Right now, those threats are not being taken seriously.

Frontrunning: October 27

  • Hilsenrath - The Fed Strives for a Clear Signal on Interest Rates (WSJ)
  • Tentative Budget Deal Reached, Raising Debt Limit (WSJ)
  • China Calls U.S. Challenge Over Island Threat to Regional Peace (BBG)
  • UK economy slows more than expected in third quarter (Reuters)
  • In China’s Alleyways, Underground Banks Move Money (WSJ)
  • Inside the Secretive Circle That Rules a $14 Trillion Market (BBG)
  • A Frustrated Koch Brother Decides It’s Time to ‘Spout Off’ (WSJ)

Stop Blaming OPEC For Low Prices

OPEC altered the course of the oil markets last year when it decided to cast aside its traditional role of maintaining balance through production cuts. Instead it pursued a strategy of fighting for market share, contributing to an immediate rout in oil prices. WTI and Brent then went on to dive below $50 in the weeks following OPEC’s decision. OPEC is widely expected to continue its current strategy at its next meeting, and as such, no rebound in oil prices is expected, at least not because of the results of the group’s meeting in Vienna. But that raises a question about what the world of oil expects from OPEC: Why is it that the responsibility for balancing the market falls on OPEC? Why should OPEC be the one to fix the imbalances in the global crude oil trade?

Frontrunning: October 26

  • European shares slip as easing expectations fade (Reuters)
  • Valeant and Pharmacy More Intertwined Than Thought (WSJ)
  • The Pawn Isolated: Valeant, Philidor and the Annals of Fraud (WSJ)
  • Strongest Afghan Quake Since 1949 Triggers Search for Survivors (BBG)
  • EU Agrees To Tighten Border Controls And Slow Migrant Arrival (AP)
  • Volkswagen Suspends More Employees (WSJ)
  • Volkswagen Loses Global Sales Lead to Toyota Amid Diesel Scandal (BBG)

Futures Fizzle, Europe Red As Markets Ask: "What Do Central Banks Do Now?"

In our Chinese stock market wrap following Friday's unexpected rate cut, which saw the Shanghai Composite storm out of the gate, we said that "we would not be surprised to see China's stocks sliding back into the red very shortly as "sell the news" concerns return, and as the increasingly more addicted "markets" demand even more liquidity from central banks just to stay unchanged, let alone rise to new all time highs." Sure enough, with just minutes to go before the close, the SHCOMP wiped out all its daily gains and was set for a red close had it not been for the "national team" miraculous last minute intervention which was inevitable after Friday's PBOC rate cut, and which lifted the composite 0.5% into the green as the euphoria was rapidly evaporating.

World's Largest Leveraged ETF Halts Orders, Citing "Liquidity Constraints"

First The Bank of Japan destroyed the Japanese bond market, and then, back in May we warned that The Bank of Japan had 'broken' the stock market. Now, it appears the all too obvious consequences of being the sole provider of buying power in an antirely false market are coming home to roost as Nomura reports the "temporary suspension" of new orders for 3 leveraged ETFs - the largest in the world - citing "liquidity of the underlying Nikkei 225 futures market."

Volkswagen: A Decade Of Deception - Full Chronology

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).

Bailout World: Volkswagen "Cheating" Fine Is 20 Times Higher Than GM's For 'Killing 174 People'

When bailout-darling GM 'fessed up to an intentional ignition-switch defect, tied to at least 174 deaths, The Justice Department fined them $900 million (and no employees faced criminal charges). So, in this consequence-less world in which we live, when Volkswagen admits to literally cheating emissions-standards tests, it faces up to $18 billion in fines from The EPA, one has to wonder whether "we" have our priorities right?

Does Capitalism Cause Poverty?

The world’s poorest countries are not characterized by naive trust in capitalism, but by utter distrust, which leads to heavy government intervention and regulation of business. Under such conditions, capitalism does not thrive and economies remain poor. Pope Francis is right to focus attention on the plight of the world’s poorest. Their misery, however, is not the consequence of unbridled capitalism, but of a capitalism that has been bridled in just the wrong way.

Chinese Stock Short Squeeze Stalls After IMF Delays Decision On Yuan SDR Inclusion

Yesterday afternoon's meltup short-squeeze in China - after regulators announced their latest restrictions on short-selling - has stalled in the early trading tonight following The IMF's decision to delay inclusion of Yuan in the SDR pending a review in September 2016. Though this will be a disappointment to the Chinese, the door is still open though given waringse from BMW and Toyota over "normalizing" auto sales, the market problems may be morphing quickly into economic problems.

Frontrunning: July 29

  • Fed expected to push ahead with rate hike plan (Reuters)
  • Upbeat earnings lift European stocks ahead of Fed (Reuters)
  • Chevron to Cut 1,500 Jobs (Rigzone)
  • Can Windows 10 Revive PC Sales? (WSJ)
  • U.S. Junk-Bond Buyers Left in Dark as Private Deals Become Norm (BBG)
  • Jeb Bush Drawing Big Bucks From GOP Establishment (WSJ)
  • Myriad of Greek Risks Means Money Managers in No Hurry to Return (BBG)
  • Gas production at Gazprom set to hit post-Soviet low (FT)