Wall Street Journal
Free Corzine!!! Hasn't he already served enough time?
Daniel Yergin and other experts say that U.S. tight oil is the swing oil producer of the world. They are wrong. It is preposterous to say that the world’s largest oil importer is also its swing producer. There are two types of oil producers in the world: those who have the will and the means to affect market prices, and those who react to them. In other words, the swing producer and everyone else.
We don’t have a dog in this fight. San Bernardino doesn’t change the calculation. ISIS will eventually collapse under its own homicidal and parasitical weight, probably with the help of one or more of its neighbors, whose inactivity and divisiveness we currently underwrite. Then ISIS will be replaced by something better... or worse... it is impossible to know in this region. In the interim, we and our European friends should focus our efforts on isolating ourselves from the madness. And we certainly should not go out of our way to draw further fire.
Before we go into details of the overnight carnage, this is where we stand currently: S&P futures now down 33 points or 1.63% while 2Y Treasury rallies pushing its yield back below 1% as EU stocks extend their drop after China weakened its currency, North Korea says it tested a hydrogen bomb; Brent crude falls to lowest level since 2004.
Turkey’s shoot-down of a Russian jet and the Saudi execution of a revered Shiite cleric, who threatened no one in prison, should cause the United States to undertake a cost-benefit analysis of the alliances and war guarantees we have outstanding, many of them dating back half a century. Do all, do any, still serve U.S. vital national interests?
"The Saudis are preparing for Iran’s return," said Mohamed Sadegh Memarian, who recently retired as the head of petroleum market analysis at Iran’s oil ministry, as they sharply cut the prices they charge for crude oil in Europe (to the biggest discount since Feb 2009). The move that will likely undercut Iran happens as sectarian tensions escalate between the rival Middle Eastern nations.
Though "another Lehman Brothers" isn't likely to happen with banks, it is very likely to happen with commodity firms and countries that depend directly or indirectly on commodity prices.
Main Street is vulnerable to leveraged trading algorithms and Brazilian bonds because it’s not just exotica that is overleveraged. Risk-off, in short, is no longer just a temporary swing of the pendulum, guaranteed to reverse in a year or two. As amazing as this sounds, we’ve borrowed so much money that as hedge funds go, so goes the world.
Ever since it started making complicated bets against some leveraged ETFs, Miller’s Catalyst Macro Strategies Funds has since grown from $500,000 in assets at the start of the year to about $170 million. It achieved a more than 50 percent return this year, placing it far ahead of its competitors.
Important pillars of the bull case evaporated throughout 2015. Global price pressures weakened, the global Credit backdrop deteriorated and the global economy decelerated. The huge bets on central bank policies left markets at high risk for abrupt reversals and trade unwinds – 2015 The Year of the Erratic Crowded Trade. Indeed, a global bear market commenced yet most remain bullish. Serious and objective analysts would view this ominously.
"If the president’s announced sanctions ultimately aren’t executed, it would demonstrate a level of fecklessness that even the president hasn’t shown before."
The unfolding correction of the visible excesses of the credit inflation - such as overinvestment and malinvestment - will destroy incomes and profits; the Great Unwind of the less visible effects, such as the sovereign wealth fund liquidations, are a giant pin aimed squarely at the monumental worldwide bubbles in stock, bonds and real estate.
The S&P 500 closed at 2052 on November 18,2014. That was 405 days ago, and despite the rips and dips in the interim the broad market average has gone nowhere.
The aristocracy’s control over all the mainstream ‘news’ is ironclad - and this includes the political magazines as well as ‘intellectual’ magazines. American ‘news’ media stifle democracy in America; they’re not part of democracy, in America. They’re like poison that’s presented as being ‘medicine’ instead. Suckers don’t just swallow it; they come back for more of that propaganda. A press like this makes it impossible for there to be intelligent, informed, rather than misinformed and/or stupid, voting in national political elections in the United States.
Market-based Credit is unstable. This remains the fundamental issue – the harsh reality – that no one dares confront. Long-term stability in a Capitalistic system requires sound money and Credit (hopelessly archaic, we admit). Over the years, we've tried to differentiate traditional finance from unfettered “New Age” finance. The former, bank lending-dominated Credit, was generally contained by various mechanisms (including the gold standard, effective currency regimes, bank capital and reserve requirements, etc.). This is in stark contrast to the current-day securities market-based global financial “system” uniquely operating without restraints on either the quantity or quality of Credit created. There’s no precedence for such a globalized monetary fiasco, though there are a number of historical episodes that provide valuable insight.