en "Mysterious" Fire Hits Argentine Ministry Of Finance, Destroys Years Of Prior Regime's Files <p>&quot;If you play with fire, you get burned,&quot; apart from if you are an official in the Argentine government it would appear. <strong><a href="">Just days after Argentina threw out the Peronists</a></strong>, who have ruled almost non-stop in the three decades since the end of military rule, <a href=""><strong>The Ministry of Finance suffered a mysterious fire</strong></a> in its computer center, <strong><em>catastrophically (and coincidentally) destroying the prior-regime&#39;s files</em></strong>.</p> <p>&nbsp;</p> <p><a href=""><img height="208" src="" width="383" /></a></p> <p><a href=""><em>As Perfil reports (via Google Translate)</em></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>The weekend came a mysterious fire at the Ministry of Economy , in the area of data center located on the fourth floor of the Economy Ministry. </strong></p> <p>&nbsp;</p> <p>The fire began on Sunday afternoon at the site containing the <strong>computers on which cost control files of the ministry. </strong></p> <p>&nbsp;</p> <p>The fire, reported Clarín , led to a police report .</p> <p>&nbsp;</p> <p><strong>On the fourth floor lies the entire operational area of Juan Carlos Pezoa, the head of the Ministry of Finance. It was in a small office on this floor, </strong>although far from the clerk&#39;s office, located in the Directorate General Information Systems Financial Management to the entrance of Balcarce 186, where the incident occurred.</p> <p>&nbsp;</p> <p>According to the official version, which led to the fire was a short circuit in one of the air conditioners that refrigerate the room.</p> <p>&nbsp;</p> <p>However, he noticed that the complaint was filed at the police station second day after the loss occurred by the head of the area, Maria Eva Sanchez.&nbsp;</p> <p>&nbsp;</p> <p><u><strong>According to ministry employees, all computers that burned were in the room where it is kept cost control portfolio dependent commands Pezoa the secretariat. </strong></u></p> <p>&nbsp;</p> <p><u><strong>This runs counter to the official version which speaks of &quot;the ignition of the fire in the live-testing are of software developments.&quot;</strong></u></p> </blockquote> <p><span style="text-decoration: underline;"><strong>This is not the first time a fire has destroyed government records - or second, or third, or even fourth...</strong></span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>With this new fire, and <strong>this year there are four key areas in the state</strong>.</p> <p>&nbsp;</p> <p>In February, there were fires in the Pink House and Senate and last month in the Libertador Building.</p> </blockquote> <p><strong><a href="">And then there was last February&#39;s deadly fire </a>which destroyed the central bank&#39;s records just days after a planned crackdown on the banking system.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>While we are sure it is a very sad coincidence, on the day when Argentina decrees limits on the FX positions banks can hold and the Argentine Central Bank&#39;s reserves accounting is questioned publically, a massive fire - killing 9 people - has <strong>destroyed a warehouse archiving banking system documents</strong>.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p><a href=""><img src="" style="width: 576px; height: 376px;" /></a></p> <p>&nbsp;</p> <p>As <a href="">The Washington Post reports</a>, the fire at the Iron Mountain warehouse <em>(which purportedly had multiple protections against fire, including advanced systems that can detect and quench flames without damaging important documents)</em> took hours to control and the sprawling building appeared to be ruined. The cause of the fire wasn&rsquo;t immediately clear - <em>though we suggest smelling Kirchner&#39;s hands...</em></p> </blockquote> <p>*&nbsp; *&nbsp; *<br />The bottom line is simple - <em><strong>where there&#39;s 5 fires in government offices in 18 months, there is smoke and mirrors and the lies and corruption of Kirchner and her operatives will hopefully one day be exposed.</strong></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="383" height="208" alt="" src="" /> </div> </div> </div> Corruption Google Fri, 27 Nov 2015 23:30:00 +0000 Tyler Durden 517152 at China's Plunge Protection Team Now Owns 6% Of The Entire Chinese Stock Market <p>Two weeks ago, in “<a href="">The Cost Of China's ‘Manipulated Market Stability’ May Be Too High, BofAML Warns</a>,” we revisited Beijing’s plunge protection national team, which during Q3 bought an astounding CNY1.5 trillion in stocks.&nbsp;</p> <p>For those who might have forgotten exactly how this worked, the PBoC effectively transformed CSF into a giant, state-run, margin lending, prop desk and before you knew it, the government was stepping in just prior to the close on a near daily basis to keep the bottom from falling out. Every time CSRC attempted to step out of the market, chaos ensued. Indeed, even rumors that the government was preparing to scale back the plunge protection were enough to spook investors as we saw in late July when futures sank after a Caijing reporter suggested that the national team was set to rein in its purchases (that reporter was later arrested and charged with causing “panic and disorder”).&nbsp;</p> <p>As August wore on, the cost of propping up the market (which desperately wanted to fall further as legions of semi-literate Chinese day traders who three months earlier had been willing to buy any and all dips suddenly had a mind to sell any and all rips in a frantic attempt to salvage their severely depleted life savings) simply became unbearable and so, Beijing decided to just start arresting anyone who was suspected of being a “malicious” seller. The crackdown - named “kill the chicken to scare the monkey” after a Chinese proverb - was designed to essentially make market participants believe that selling or worse, shorting, could land you in jail.&nbsp;</p> <p>Subsequently, the market stabilized but by the time the waters calmed, China was left with an enormous stock portfolio, <strong>nearly a quarter of which was purchased at multiples above 40X.&nbsp;</strong></p> <p><a href="" style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 13.3333px; line-height: 17.3333px;"><img src="" width="600" height="208" style="max-width: 100%; height: auto;" /></a></p> <p>Here's a look at the paper losses the government had incurred by the end of September (note that most of the CNY224 billion hit had been recouped as of mid-November):</p> <p><a href="" style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 13.3333px; line-height: 17.3333px;"><img src="" width="600" height="232" style="max-width: 100%; height: auto;" /></a></p> <p>BofAML's conclusion was that given concerns about what incessant stock buying might convey about both the future course of the yuan and about China's commitment to liberalizing capital markets, the PBoC may not be inclined to remain active in the market going forward.&nbsp;</p> <p>Indeed, when the SHCOMP <a href="">plunged on Friday</a> in the aftermath of a new round of broker probes, a poor read on industrial profits, and the revelation that two more companies are set to default, the national team appeared to have stayed on the sidelines and maybe that's a good thing because as FT reports, the government now owns 6% of the entire mainland stock market.&nbsp;</p> <p>"China’s 'national team' owns at least 6 per cent of the mainland stock market as a result of the massive state-sponsored rescue effort this year to prop up share prices following the summer equity market crash," <a href="">FT wrote on Thursday</a>, adding that "China Securities Finance Corp, the main conduit for the injection of government funds,<strong> owned 742 different stocks at the end of September, up from only two at the end of June." </strong>Here's more:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>The figures are compiled from quarterly financial statements of listed companies, which are required to disclose their 10 largest shareholders. <strong>The actual size of national team holdings is probably larger, given that some likely hold stakes that are too small to rank among the top 10.</strong></em></p> <p>&nbsp;</p> <p><em>The estimate of the shareholdings of the national team covers positions held by CSF, which is the state-owned margin lender, and by Central Huijin Investment, the holding company for shares in state-owned financial institutions and a subsidiary of China’s sovereign wealth fund.</em></p> <p>&nbsp;</p> <p><em><strong>The market value of CSF’s holdings increased from only Rmb692m ($108m) at the end of June to Rmb616bn three months later.</strong> However, the market value of Huijin’s holdings fell by Rmb167bn in the third quarter to Rmb2tn, mostly reflecting mark-to-market losses on shares it previously held. This fall came despite Huijin’s additional share purchases in the period.</em></p> <p>&nbsp;</p> <p><em><a href=""><img src="" width="600" height="382" /></a><br /></em></p> <p>&nbsp;</p> <p><em>The significant role of the national team in propping up the market has raised concerns about the sustainability of the recent share rally, and about <strong>what would happen if the government unwound its holdings.</strong></em></p> </blockquote> <p>Yes, "what <em>would</em> happen if the government unwound its holdings?" That's difficult to say, but it might very well be that the psychological effect national team selling would have on market participants would end up doing more damage than the selling itself. </p> <p>As we discussed earlier today, it looks like China may be trying to offset a rollback of the draconian measures imposed on markets over the summer by throwing more people in jail. That is, in an effort to dispel the idea that the Politburo controls what goes on in markets, Beijing is lifting some restrictions. But that means losing control and so, officials hope a renewal of the "malicious" market manipulator witch hunt will be able to keep things in check. Here's an example of what we mean:&nbsp;<span style="font-size: 1em; line-height: 1.3em;">just days ago, Beijing lifted selling restrictions on brokerages' prop desks, but simultaneously, authorities launched investigations into at least three brokerage houses for alleged "rules violations." As we put it earlier: s</span>o you can technically be a net seller again, it's just that you might end up being arrested for it if the Party thinks your selling was particularly malicious or otherwise ill-timed.&nbsp;</p> <p>This all comes as the country is facing its "Minsky Moment" wherein heavily indebted corporates will no longer be able to borrow money to pay interest on money they borrowed in the past. Once that threshold is crossed, the defaults begin.&nbsp;</p> <p>Throw in rapidly decelerating growth and an acute over capacity problem and there's the very real potential for concurrent crashes in stocks, bonds, and the overall economy.&nbsp;</p> <p>So time will tell whether Beijing will ultimately be satisfied with 6% of the equity market if things start to go south again as they did today and whether, when missed principal and interest payments are happening six times per week instead of six times per year, Xi will be able to keep his cool and refrain from bailing out the entire commodities and industrial complex at the expense of China's international reputation. &nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="602" height="348" alt="" src="" /> </div> </div> </div> Caijing Capital Markets China default Market Crash Yuan Fri, 27 Nov 2015 23:00:26 +0000 Tyler Durden 517155 at The Videos Are In: US Shoppers Go Wild, Beat Each Other Up To Celebrate Black Friday Sales <p>It's Black Friday which means the US is flooded with videos of its favorite pastime: <em><strong>mauls in the malls, </strong></em>as vicious brawls and fights break out among total strangers across across America's countless retail outlets.</p> <p>The first videos trickle in:</p> <p> <iframe src="" width="560" height="315" frameborder="0"></iframe></p> <p> <iframe src="" width="560" height="315" frameborder="0"></iframe></p> <p>&nbsp;</p> <p>And yet, this year there may be a shift. </p> <p>Moments ago IBM Watson Trend released the latest Thanksgiving online sales which rose 26% from 2014, with mobile traffic reaching nearly 60% of all online traffic, an increase of 14.8% over 2014. According to IBM, consumers spent $123.45/order with 40% of all online sales came from mobile devices, an increase of 24% over Thanksgiving 2014.</p> <p>Some other notable findings:</p> <ul> <li>Smartphones accounted for 47% of all Thanksgiving online traffic vs tablets at 13.7%; smartphones also surpassed tablets in sales, driving 24% of online sales vs tablets at 16%</li> <li>IBM Watson predicts Black Friday online sales up more than 14.5% y/y</li> <li>Consumers indicate top products incl. Apple Watch, Samsung, Sony, LG TVs, Microsoft Surface Pro 4</li> </ul> <p>And while this is good news for the Amazons of the world as consumers continue to migrate to online shopping platforms, this is bad news for traditional brick-and-mortar retailers for whom today was supposed to be the one day when sales are solidly in the "black." </p> <p>As <a href="">Bloomberg summarizes</a>, the online rush comes as Wal-Mart Stores Inc., Macy’s Inc. and other chains roll out their Black Friday specials, aiming to get more shoppers into stores. About 135.8 million Americans are expected to shop in stores or online over the four-day weekend, according to the National Retail Federation, the largest U.S. retail trade organization. The amount they’ve spent has declined over the past two years, dropping 11 percent to $50.9 billion in 2014.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Though consumers are benefiting from lower fuel prices and unemployment rates, retailers have their challenges. Mall traffic is in the midst of a long-term slowdown, and shoppers are spending more on experiences and less on stuff. More recently, a warm autumn has curtailed sales of seasonal merchandise, leaving stores with excess inventory. All those factors point to a need for heavy discounting -- good for consumers, but not so great for retailers’ profits.</p> <p>&nbsp;</p> <p>“<strong>From the perspective of the amount of discounting that’s going on, the over-inventory situation, it seems like there are going to be a lot of great deals in the next 45 days,” </strong>said Bob Drbul, a retail analyst at Nomura Securities International.</p> </blockquote> <p>The NRF’s traffic forecast represents a 1.6 percent increase from last year although in a zero-sum market, "there’s a risk that fewer shoppers than expected may show up." Last year, the NRF had forecast 140.1 million consumers would hit stores and e-commerce sites, <strong>4.8 percent more than actually turned out, </strong>according to its post-weekend shopping survey. Expect more of the same as the transition to online shopping accelerates. </p> <p>Furthermore increasingly more stores are pulling back on their Thanksgiving weekend hours this year and electing to spread more of their specials throughout the month. Wal-Mart said it expects record crowds on Friday, even though it’s putting most of its discounts online first. </p> <p>So videos of the occasional brawl the best evidence of the demise of traditional retailer comes from in person "channel checks" such as what&nbsp; TheStreet's correspondent Brian Sozzi has been doing all night. Here are some of his "ghost town" findings.</p> <blockquote class="twitter-tweet" lang="en"><p dir="ltr" lang="en">Even the <a href="">#StarWars</a> plush dolls and bedding not selling <a href="">@JeffMacke</a> <a href=""></a></p> <p>— Brian Sozzi (@BrianSozzi) <a href="">November 27, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="en">Star Wars toys not flying off shelves today, lots of stuff bought on "Force Friday" in September <a href="">#BlackFriday</a> <a href=";src=ctag">$HAS</a> <a href=""></a></p> <p>— Brian Sozzi (@BrianSozzi) <a href="">November 27, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="en">1 thing very clear being up over 24 hours in stores:</p> <p>Star Wars fatigue has set in. Stuff not selling <a href="">#BlackFriday</a> <a href=""></a></p> <p>— Brian Sozzi (@BrianSozzi) <a href="">November 27, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="en">It's a quiet morning so far here at Target in jersey city! <a href="">@MorganLBrennan</a> has more 6am <a href="">@SquawkCNBC</a> <a href=""></a></p> <p>— Amanda Weindel (@AmandaWeindel) <a href="">November 27, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="en">To unload its weak fall styles, Gap offers people free totes with a purchase on <a href="">#BlackFriday</a> <a href=""></a></p> <p>— Brian Sozzi (@BrianSozzi) <a href="">November 27, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="en">Good job on <a href="">#BlackFriday</a> Sears friends... <a href=""></a></p> <p>— Brian Sozzi (@BrianSozzi) <a href="">November 27, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="en">Kohl's lines looking weak, unsurprising given how strong JC Penney has started <a href="">#BlackFriday</a> <a href=";src=ctag">$JCP</a> <a href=";src=ctag">$KSS</a> <a href=""></a></p> <p>— Brian Sozzi (@BrianSozzi) <a href="">November 27, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="en">I did not do this JC Penney <a href="">#BlackFriday</a> <a href=""></a></p> <p>— Brian Sozzi (@BrianSozzi) <a href="">November 27, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="en">Best Buy store manager: "We still have both sizes of the Apple Watch in stock."</p> <p>Store opened 6 hours ago...</p> <p><a href=";src=ctag">$AAPL</a> <a href="">#BlackFriday</a></p> <p>— Brian Sozzi (@BrianSozzi) <a href="">November 27, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="en">New store, more GoPro stuff collecting dust <a href=";src=ctag">$GPRO</a> <a href="">#BlackFriday</a> <a href=""></a></p> <p>— Brian Sozzi (@BrianSozzi) <a href="">November 27, 2015</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet" lang="en"> <p dir="ltr" lang="en">JC Penney women's shoe department </p> <p><a href="">#Thanksgiving</a> vs. <a href="">#BlackFriday</a> <a href=""></a></p> <p>— Brian Sozzi (@BrianSozzi) <a href="">November 27, 2015</a></p></blockquote> <script src="//"></script> Apple Best Buy Black Friday JC Penney Nomura NRF Sears Twitter Twitter Unemployment Fri, 27 Nov 2015 22:43:29 +0000 Tyler Durden 517125 at How The Scots Welcome 'Visitors' <p>William Wallace would be proud...</p> <p><strong>Larkhall is a town in South Lanarkshire, Scotland </strong>and is around 14 miles southeast of Glasgow. Traditionally a mining, weaving and textile area, most of Larkhall's traditional industries have now shut, including the Lanarkshire iron and steel works... <em><strong>and now they have a message for the new invaders...</strong></em></p> <p><a href=""><img src="" width="558" height="772" /></a></p> Fri, 27 Nov 2015 22:30:00 +0000 Tyler Durden 517148 at The Death Of Damascus: Images From Syria's War-Torn Capital <p>Last month, as the IRGC and Hezbollah rallied their ground troops to prepare for an assault on Aleppo, we brought you a <a href="">series of stark images</a> from a city deciminated by years of &nbsp;war. A week later, <a href="">we highlighted</a> new, high-def drone footage of Syria’s eerily desolate urban landscapes rendered barren by mortar fire, barrel bombs, and airstrikes.&nbsp;</p> <p>If you follow the war closely, it’s easy to get swept up in the World War III, global conflict hysteria. After all, what’s more intriguing from a geopolitical perspective than the distinct possibility that Moscow and NATO may be headed for an armed conflict after Turkey became the first alliance member to engage a Russian or Soviet aircraft in some six decades. Throw in the fact that at the center of it all is a wealthy, brazen terrorist organization funded by Saudi Arabia and Qatar, whose mission is to rid the Arabian Peninsula of Iranian influence and you have the recipe not only for a renewal of Cold War hostilities, but also for an explosive sectarian conflict.&nbsp;</p> <p>Lost in all of this is the human toll that five years of civil war has exerted upon Syria’s beleaguered populace. To be sure, the mass exodus from the Mid-East and subsequent flow of migrants into Germany, France, Sweden, and Austria (to name but a few) is representative of the struggle, but in the minds of many Europeans, the Paris attacks have served to turn a humanitarian crisis into a symbol of a dangerous and imminent Islamization of Western Europe. That, in turn, has to a certain extent dehumanized Syrian refugees. That’s not to say that terror groups have not sought to take advantage of the discord by embedding militants in the crowds of asylum seekers flooding into Europe. It’s just to say that thanks to the massacre in France, Syrian refugees have become more a symbol of terror than they have a symbol of suffering.&nbsp;</p> <p>It’s with that in mind that we bring you the following images (via <a href="">Reuters</a>) from the Syrian capital and excerpts from “<a href="">The Slow Death of Damascus</a>”, by Thanassis Cambanis as originally published in <em>Foreign Policy</em>.</p> <p><a href=""><img src="" width="600" height="381" /></a></p> <p><a href=""><img src="" width="600" height="366" /></a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Few supporters of the government are switching sides to the opposition these days, but many are simply exhausted by the immense toll exacted by the war. <strong>Half the country’s people have been pushed from their original homes.</strong> The infrastructure is creaking. Even some supporters of Assad say they feel that government-held Syria is hollowing out, running on fumes.</em></p> </blockquote> <p><em><a href=""><img src="" width="600" height="349" /></a></em></p> <p><em><a href=""><img src="" width="600" height="370" /></a></em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Over the course of a recent 10-day visit, Damascus residents said they feel less embattled than they did a year ago, but the war is still an inescapable reality of everyday life.<strong> Every night, dozens of mortars still land in the city center, sending wounded and sometimes dead civilians to Damascus General Hospital.</strong> From the city’s still-busy cafés, clients can hear the thuds of outgoing government guns and the rolling explosions of the barrel bombs dropped on the rebel-held suburb of Daraya.</em></p> </blockquote> <p><em><a href=""><img src="" width="600" height="345" /></a></em></p> <p><em><a href=""><img src="" width="600" height="365" /></a></em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Army and militia checkpoints litter the city. In some central areas, cars are stopped and searched every two blocks. <strong>Still, rebels manage to smuggle car bombs into the city center.</strong> According to residents, explosions occur every two or three weeks, but are rarely reported in the state media.</em></p> <p>&nbsp;</p> </blockquote> <p><a href=""><img src="" width="600" height="374" /></a></p> <p><em><a href=""><img src="" width="600" height="345" /></a></em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>“The government doesn’t care if people leave. It can’t stop them,” one middle-class Syrian, who has chosen so far to remain in Damascus, said of the exodus. “The war seems like it will go on forever. People see no future for their children. The only people who are staying are the ones who have it really good here or the ones who aren’t able to leave.”</em></p> </blockquote> <p><em><a href=""><img src="" width="600" height="345" /></a></em></p> <p><em><a href=""><img src="" width="600" height="421" /></a></em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>The fight has become an integral part of daily life, directly affecting almost every family from every type of background. Throughout the coast, photographs of the war’s casualties adorn every block. Each neighborhood has a wall of martyrs, some of them featuring hundreds of dead — part of an effort to build a martyrdom culture not unlike that which sustains loyalists of Iran’s ayatollahs and Lebanon’s Hezbollah, both of which provide key support to the Syrian government.</em></p> </blockquote> <p><em><a href=""><img src="" width="600" height="332" /></a></em></p> <p><em><a href=""><img src="" width="600" height="336" /></a></em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>“This is our destiny,” said Ahmed Bilal, an Alawite cleric who was circulating in a shiny white robe and chatting with the assembled families. A long line of fighters predating the establishment of modern Syria had resisted foreign invaders, he said, and gave inspiration to today’s soldiers.</em></p> <p><em><br /></em></p> <p><em><strong>“Even if we lose one-third of our young men, we will still have the rest to live,” </strong>Bilal said. “They died so that the others should have life.”</em></p> </blockquote> <p><em><a href=""><img src="" width="600" height="410" /></a></em></p> <p><em><a href=""><img src="" width="600" height="354" /></a><br /></em></p> France Germany Reality Reuters Saudi Arabia Turkey Fri, 27 Nov 2015 22:00:36 +0000 Tyler Durden 517154 at Dirty Connecticut Mayor (Sentenced To Prison For Corruption) Reelected In Landslide <p><a href="">After East Chicago re-elected an accused drug dealer and murderer as councilman</a>, we thought the bar had dropped as low as it gets for the ignorance of an electorate. But, no! Bridgeport, Connecticut residents just took the proverbial biscuit by <strong><em>re-electing Mayor Joseph P. Ganim - who during his last &#39;reign&#39; was convicted of <a href="">16 felonies</a> including racketeering, extortion, and bribery</em></strong>.</p> <p><a href=""><img height="160" src="" width="249" /></a></p> <p><a href=""><em>As;s Lou Colagiovanni details, </em></a><strong>Ganim spent seven years of his life in federal prison as a result of the convictions.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Political pundits originally saw Ganim&rsquo;s candidacy as a sideshow with no hope of electability, but the joke was on them. </strong>In September, <a href="" target="_blank">Ganim defeated Bridgeport&rsquo;s incumbent mayor</a>, Bill Finch, by 400 votes during the Democratic primary.</p> <p>&nbsp;</p> <p><strong>Mary-Jane Foster, the Vice President of the <a href="" target="_blank">University of Bridgeport</a>, was Ganim&rsquo;s closest opponent and lost the election by a landslide margin of almost 2 to 1.</strong> Imagine that&mdash;the voters prefered a convicted felon known for making backroom deals over an illustrious member of the community who has dedicated her life to education.</p> <p>&nbsp;</p> <p><strong>Foster was stunned by Ganim&rsquo;s victory. </strong>&ldquo;<em>I couldn&rsquo;t be more surprised. I expected that I would be elected the next mayor of Bridgeport. Voters were clearly willing to give Joe Ganim a second chance</em>,&rdquo; she commented.</p> <p>&nbsp;</p> <p>Connecticut Governor <a href="" target="_blank">Dannel P. Malloy</a> acknowledged Ganim&rsquo;s triumph. &ldquo;<em>The voters have spoken, and I want to congratulate Joe Ganim on his victory. I am committed to moving Bridgeport forward, and, as I have said, I will continue to put the best interests of the community first</em>,&rdquo; he said.</p> <p>&nbsp;</p> <p><strong>Though unusual, a mayor being convicted of a felony does not automatically mean the candidate cannot win reelection. </strong>Marion S. Barry Jr., the former Mayor of Washington, D.C., <a href="" target="_blank">was convicted of smoking crack cocaine in 1990</a> and sentenced to six months in prison. Barry&rsquo;s arrest meant he could not run for reelection, but the voters brought him back to the mayoralty from 1995 to 1999.</p> <p>&nbsp;</p> <p>In a showing of sheer political gamesmanship, <strong>Ganim was able to convince one of the FBI agents who originally arrested him in 2003 to endorse his campaign</strong>. Ganim was also endorsed by the local police union.</p> <p>&nbsp;</p> <p>Ganim was gracious in victory. &ldquo;<em>We not only made history, we&rsquo;ve defined a new course for this great city. Some will call this a comeback story, but for me, this is a city I feel I never left. I never stopped caring</em>,&rdquo; he said.</p> </blockquote> <p>Time will tell if Ganim will go back to his old tricks, but for now, <strong> it seems the voters of Bridgeport prefer a man who admits to twisting arms over a more politically correct, docile candidate.</strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="249" height="160" alt="" src="" /> </div> </div> </div> Corruption Crack Cocaine FBI Racketeering Washington D.C. Fri, 27 Nov 2015 21:30:00 +0000 Tyler Durden 517147 at Goldman's Meteoronomists Have A Dire Forecast: "Winter Is Coming" <p>What little credibility the shamanistic voodoo religion that is e<em>con</em>omics had, it lost over the past 2 years when even the most modest downtick in economic activity was blamed on the "weather." It appears that as part of their conversion from "economist" to pure-play weathermen, nobody advised Wall Street's if not best and brightest, then certainly dumbest Keynesians, that adjusting for the seasons, is precisely what seasonal adjustments are for, and why they spend hundreds of hours goalseeking every data point with Arima-X-13 models until they get the result they want. </p> <p>It was not enough, and in the winter of 2013 and 2014, the farce was indeed complete, when none other than the <a href="">Bureau of <span style="text-decoration: line-through;">Weather </span>Economic "Analysis"</a> incorporated double seasonal adjustments, to smoothe away what to most was an "inexplicable" slowdown in the US economy, and which was simply a function of two consecutive credit crises hitting China in the latter part of 2013 and 2014. </p> <p>However, instead of modeling how two consecutive years of China's slowing credit impulse slammed US growth, the <em>economisseds </em>instead decided to blame it all on the unprecedented events of cold and snow in the winter as they relied on their favorite forecasting tool...</p> <p><a href=""><img src="" width="464" height="348" /></a></p> <p>&nbsp;</p> <p>So with the winter of 2015 so far shaping up to be what some have dubbed "abnormally hot", we thought that at least this year the weather<em>con</em>omists would keep their mouth shut: after all, if you blame cold weather for an underperforming economy, you better say nothing at all if the weather is warmer than usual as it has been in October and November.</p> <p>Alas, it was not meant to be, and so, without further ado, here are everyone favorite economweathermen from Goldman Sachs, warning everyone that, drumroll, yes,&nbsp;<em>Winter Is Coming.</em></p> <p>No really, that's the title. <em><br /></em></p> <p><em>Here is the full 2000-word "explanation" from Goldman's team of merry weathermen:</em></p> <p><strong>Winter is Coming</strong></p> <ul> <li>Growth decelerated sharply in Q1 in 2014 and 2015, and we suspect that unusually harsh winter weather contributed. With the winter season now upon us, we revisit old lessons learned and develop new rules of thumb for estimating the economic impact of weather fluctuations.</li> <li>We focus on two weather indicators that measure temperature and snowfall. The first is the deviation of “heating degree days” (HDD), a measure of cold temperatures, from seasonal norms. The second is the Regional Snowfall Index, a measure of the societal impact of snowfall that includes scores for hundreds of major snowstorms.</li> <li>We draw three sets of conclusions about the impact of weather on the economy. First, we find that both temperatures and snowfall matter for growth<strong>. In particular, we estimate that a 1 standard deviation (SD) increase in HDD is associated with a 0.4 percentage point (pp) reduction in GDP growth and a 0.1pp reduction in our current activity indicator (CAI), while a 1SD snowstorm is associated with about a 0.3pp reduction in both. </strong>Admittedly, there is considerable uncertainty around our estimates due to both collinearity between temperatures and snowstorms and the limited sample size at the aggregate level.</li> <li>Second, we find that weather effects have a “tell” in the form of an uneven pattern of impact across the economy. Comparing the effect of weather variables across top-tier indicators, across sectors in the Gross State Product data, and across industries in the payrolls report, we find that weather typically has the largest impact on construction, retail trade, leisure and hospitality, foreign trade, and manufacturing.</li> <li>Third, we find that weather variables have an important but somewhat more nuanced effect on the payrolls report during the winter months. Using state-level data, we find that the intra-month pattern of weather conditions is important, with conditions during the reference week carrying the greatest weight. We estimate that a 1SD colder month and 1SD of snowfall during the reference week are each associated with a roughly 35k reduction in payroll growth.</li> </ul> <p>The sharp deceleration of Q1 GDP growth in both 2014 and 2015 has provoked some anxiety about what to expect this winter. At the time, both we and Fed officials pointed to unusually severe winter weather as one contributor to the first-quarter slowdowns. <strong>To some skeptical investors, economists who attributed weak Q1 growth to weather effects sounded a bit like Peter Sellers’ Chance the Gardener promising that “there will be growth in the spring.” </strong>But in both years, growth did rebound strongly in Q2, suggesting that weather effects had in fact contributed to the weak Q1 performance. While we certainly do not claim to be able to predict this winter’s weather, <strong>we can estimate the impact of weather deviations from seasonal norms once they occur</strong>. In this week’s Analyst, we revisit some old lessons learned and develop some new rules of thumb for assessing the impact of weather conditions on growth and employment.</p> <p><img src="" width="470" height="291" /></p> <p><strong>Why Weather Matters</strong></p> <p>Most economic data are seasonally adjusted to account for weather patterns as well as other calendar effects such as holidays. But weather can still affect economic data when it departs significantly from seasonal norms. For indicators such as housing starts normal seasonal fluctuations are very large and mostly weather-driven, meaning that even moderate deviations from normal seasonal weather patterns can have large effects not captured by seasonal adjustment.</p> <p>We focus on two weather variables that capture temperature and snowfall. We measure temperature effects using the deviation of the number of heating degree days from a trailing 10-year average. Heating degree days (HDD) are a measure of cold temperatures that we have found in past research help to predict a range of economic data. We use both state-level and national population-weighted series constructed by the National Oceanic and Atmosphere Administration (NOAA). We measure snowstorms using the Regional Snowfall Index (RSI), a measure designed to capture the societal impact of major snowstorms. The RSI provides dates and scores for over 600 storms since 1900 across six regions of the US, and we construct a monthly national index—shown in Exhibit 2—by aggregating the regional indices using relative population weights. We also convert the regional series into state series by assuming that the impact of a given storm is equal across all states in a region.</p> <p><img src="" width="473" height="280" /></p> <p><strong>Weather and Growth</strong></p> <p>We start by estimating the growth effects of weather deviations. Exhibit 3 shows suggestive evidence that at least in the most severe deviations from normal weather patterns—in this case, the 25 months with the greatest snowfall since 1972—our current activity indicator (CAI) has dipped by a bit more than 0.5pp during the month of the storm before rebounding the next month. The average dip in the 25 coldest months as measured by HDD (nine of which also had top-25 snowfall) is more modest at about 0.25pp.</p> <p><img src="" width="470" height="254" /></p> <p>We next use simple models to estimate the impact of the weather variables on both quarterly GDP growth and the CAI. Using data since 1985, we regress each growth variable on its own lag as well as both contemporaneous and lagged weather variables. We impose on the models the constraint that the coefficients on the several HDD and snowfall variables, respectively, must sum to zero, so that there is no permanent effect of weather fluctuations on the level of output. Exhibit 4 shows the resulting estimates. </p> <p>The models imply that a 1 standard deviation increase in HDD relative to the trailing 10-year average (calculated as the standard deviation among only cold-weather months, equal to roughly 150 in a quarter in the case of GDP or 70 in a month in the case of the CAI) is associated with a 0.4pp reduction in GDP growth and a 0.1pp reduction in the CAI. The models also imply that 1 standard deviation of additional snowfall subtracts about 0.3pp from both the CAI and GDP growth. Our top-down finding of a smaller impact on the CAI is in line with our previous bottom-up analysis of weather effects on the CAI and is also consistent with the more modest deceleration of the CAI seen over the last two winters.</p> <p><img src="" width="463" height="265" /></p> <p>We caution that that there is considerable uncertainty around our estimates. In particular, collinearity between temperatures and snowstorms and the limited sample size at the aggregate level, especially for GDP, mean that the results are sensitive to model specification. That said, the models imply that snow and temperature deviations combined subtracted about 0.8pp from GDP growth in both 2014Q1 and 2015Q1, and we think they provide reasonable rules of thumb for the growth impact of weather fluctuations.</p> <p><strong>The Weather “Tell”</strong></p> <p>Investors are sometimes skeptical of alleged weather effects on the economy, viewing them as simply excuses to explain away weak data. How can we be confident that we are seeing the effect of weather conditions as opposed to weak growth caused by other factors?</p> <p><span style="text-decoration: underline;"><strong>While it is impossible to be certain</strong></span>, weather effects have a “tell” in the form of an uneven pattern of impact across sectors of the economy. Exhibit 5 shows our estimates of the impact of temperatures and snowfall on a number of top-tier indicators. We find that weather tends to have the largest impact on economic data related to housing and construction, retail spending, and trade. We also assess the relative impact on different sectors of the economy using state-level panel data on Gross State Product by sector, available quarterly since 2005. We find that the most weather-sensitive sectors include construction, mining, manufacturing, retail trade, and accommodation.</p> <p><img src="" width="464" height="252" /></p> <p>Finally, we can also look at the cross-sectional or category-level data within a particular report for typical weather patterns. For example, we have shown in past research that the impact of harsh winter weather differs across categories of retail sales, with the largest effects on building materials, vehicle sales, and furniture, and a positive impact on non-store sales, which include online purchases. </p> <p><strong>Weather and the Payrolls Report</strong></p> <p>We conclude by assessing the impact of weather conditions on payrolls. The impact of weather on the employment report is more nuanced because the precise timing of the payrolls reference week is important. We construct a state panel that includes payrolls and weekly HDD, recording for each month the degree days deviation during the reference week and the three previous weeks. We include all weekly variables for both the current and prior month in an initial regression in order to estimate the optimal relative weighting of the weekly weather observations. We find that the reference week is about twice as important as any other week, and we use the regression coefficients—shown in Exhibit 6—to calculate optimally-weighted HDD summary variables for the current and prior months.</p> <p><img src="" width="479" height="268" /></p> <p>We next add other weather data to our panel to see if those series are important too. We find that while the snowfall variable again has an economically and statistically significant impact, a parallel temperature measure called cooling degree days does not. We also find that the effect of precipitation is statistically significant, but quite small.</p> <p>The richness of the state-level payrolls data enables us to address several more subtle questions that are difficult to answer convincingly with aggregate national time series:</p> <ol> <li>Do weather effects matter year-round? We find that the effect of HDD deviations is not statistically significant in single-month samples from June to October.</li> <li>Is the impact asymmetric between warmer-than-usual and colder-than-usual months? By splitting the sample, we find that the per-degree day impact of colder deviations is about double that of warmer deviations. </li> <li>Is the effect linear? We find that a quadratic degree days term is not statistically significant. While there are an endless number of ways one could specify thresholds, we think that assuming linear effects is reasonable.</li> <li>Do weather effects reverse? In unconstrained regressions, the coefficients on the contemporaneous and two lagged weather terms usually sum to roughly zero, suggesting that a nearly full rebound usually occurs within a couple of months. </li> </ol> <p>While these conclusions do not necessarily apply to all economic indicators, we think they offer valuable broader lessons. Based on these findings, we construct both aggregate and industry-level models using the optimally-weighted HDD deviation and a version of the snowstorm index adjusted for the timing of the payrolls reference week. Exhibit 7 summarizes the model estimates.</p> <p><img src="" width="483" height="279" /></p> <p>In aggregating industry effects to produce a bottom-up estimate of the total impact, <strong>we only include industries whose temperature or snowstorm effects are statistically significant. </strong>We find that a 1 standard deviation colder month (about 70 HDD) is associated with a roughly 35k reduction in payroll growth, while 1 standard deviation of snowfall during the reference week is associated with a reduction of 25-45k. <strong>Once again, the weather impact leaves a familiar pattern, weighing primarily on employment in construction, leisure &amp; hospitality, and retail &amp; wholesale trade.</strong></p> <p><strong>Slightly more favorable temperatures in the weeks leading into the November reference period should make a small positive contribution to payrolls this month.</strong> The employment components of business surveys have been mixed so far, and the labor differential included in the consumer confidence report declined. We therefore expect a gain of 200k in November, a bit softer than the 215k average gain over the last six months.</p> <p>* * *</p> <p>Yes, Goldman really spent a few days writing this. </p> <p>And after that nearly 2000 words of worthless drivel, here is the punchline: if poor Q1 in 2014 and 2015 was blamed on the cold weather, then how many points of GDP in Q1 2016 (and Q4 2015) will be the result of abnormally warm weather (just don't ask the retailers who blame both hot and cold weather when their sales keep on declining) and will this be the first case in monetary policy history when a Fed hiked rates because it thought the economy was improving only to realize after the fact that it was merely ignoring the weather effect it had dissected so extensively in the prior two years, simply because this time it was in reverse and had been "boosting" the economy?</p> <p><img src="" width="500" height="400" /></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="560" height="467" alt="" src="" /> </div> </div> </div> China Consumer Confidence goldman sachs Goldman Sachs Housing Starts Monetary Policy NOAA None Fri, 27 Nov 2015 20:59:40 +0000 Tyler Durden 517151 at Why China Hit The Panic Button On Metals Traders (In 1 Simple Copper Chart) <p>Within the last week China appears to have hit the panic button with regards the seemingly unstoppable collapse of commodity prices. First, <a href="">desperate Chinese producers began to <strong>demand a QE-for-commodities bailout</strong></a>; then, following the well-trodden (and failing) path of China&#39;s equity market maipulation, authorities began to <strong>crackdown on &quot;malicious&quot; commodity short-sellers</strong>. So why now? Why focus attention on the commodity markets? Perhaps this chart holds the key...</p> <p>Having suddenly lost control of the stock market again...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 312px;" /></a></p> <p>&nbsp;</p> <p>Maybe commodities are a renewed focus as, we showed earlier in the week, there is <strong>&quot;<a href="">No End In Sight For Commodity Carnage As Chinese Fear Fed Hike Blowback</a>&quot;, </strong> a post which can be summarized with the following chart showing that at least for nickel, copper, zinc, iron ore and aluminum it will be a very unhappy holiday season:</p> <p><a href=""><img src="" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p><strong><a href="">The one-word reason for this condition, as we explained here</a>: </strong><em><strong>China</strong>, </em>which as documented extensively in the past, has clammed down on its unprecedented credit creation now that its debt/GDP is well over 300% and as a result conventional industries are dying a fast and violent death. In fact, months ago we, jokingly, suggested that what China should do, now that it has scared sellers and shorters to death, is to launch QE where it matters - the commodity space.</p> <p><a href="">Which led to demands for a bailout...</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>That joke has become a reality according to <a href="">Reuters</a>, which reports that <strong>China&#39;s aluminum and nickel producers have asked Beijing to buy up surplus metal, </strong>sources said, the first coordinated effort since 2009 to revive prices suffering their worst rout since the global financial crisis.</p> </blockquote> <p><a href="">And a crackdown on speculators </a>(the selling ones, not the buying ones)...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>So as a plan B, the same metals industry group that is reeling and understands it is one foot in the grave unless commodity prices pick up and which earlier this week demanded a government bailout, or &quot;<em>QE</em>mmodity&quot; soaking up all excess production, has doubled down and according to <a href="">Bloomberg </a>the China Nonferrous Metals Industry Association has submitted a request to Chinese regulators <strong>to probe &quot;malicious&quot; short-selling in domestic metal contracts amid recent price declines</strong>.</p> </blockquote> <p>What is even more insane, is that China will do just that, in the process breaking what little is left of a domestic commodity market next.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Regulators have begun to collect some records of trading activity following a request from the China Nonferrous Metals Industry Association, according to the people, who asked not to be identified because they aren&rsquo;t authorized to speak publicly on the matter. Nobody answered calls to the industry association&rsquo;s general office.</p> </blockquote> <p>Remember: <strong><em>it is always the &quot;malicious&quot; sellers who are the cause of all the world&#39;s problems, never the &quot;malicious&quot; buyers, especially when said buyers are the central banks themselves.</em></strong></p> <p>*&nbsp; *&nbsp; *</p> <p>So why now? Why all of a sudden pay attention to what until now has been a never-ending collapse across all commodities...</p> <p><a href=""><img src="" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p>Well perhaps we have the answer... For thre first time since the commodity super-cycle began (read credit-fueled malinvestment mania), copper prices are set to close below the critical 200-month moving average.</p> <p>The last time copper prices crossed this historical level was in 2008/9 and QE was immediately unleashed to reflate that bubble back to some state of debt-supporting fallacy...</p> <p><a href=""><img height="298" src="" width="600" /></a></p> <p>&nbsp;</p> <p>On that occasion, the metal rallied hard at month-end to close above.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>As Bloomberg notes, <strong>LME copper 3-mo rolling forward, currently trading at 4626, needs to rally 9% by Nov. 30 close to finish above 200-MMA, at ~5055, to avoid bearish technical signal.</strong></p> <p>&nbsp;</p> <p>However, some analysts say it is the 233-MMA, linked to the Fibonacci number 233 and currently at ~4610, that may be the more important support to watch, and which looks likely to hold.</p> <p>&nbsp;</p> <p>And as if to runb more salt in the wounds, very recent Chinese data has not been bullish for copper as <strong>demand for use in appliances falls 4.6% y/y in October</strong>.</p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>So are the momentum-chasing Chinese hitting the panic button on copper (and other metals) because the last level of price support is about to break exposing an entire nation&#39;s growth fallacy to the world? Who knows... but it will certainly indicate yet again just how omnipotent central planners are (or are not).</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="963" height="479" alt="" src="" /> </div> </div> </div> B+ Central Banks China Copper Fibonacci Reality Reuters Fri, 27 Nov 2015 20:30:00 +0000 Tyler Durden 517146 at How Turkey Exports ISIS Oil To The World: The Scientific Evidence <p>Over the course of the last four or so weeks, the media has paid quite a bit of attention to Islamic State’s lucrative trade in “stolen” crude.&nbsp;</p> <p>On November 16, in a highly publicized effort, US warplanes destroyed 116 ISIS oil trucks in Syria. 45 minutes prior, <a href="">leaflets were dropped</a> advising drivers (who Washington is absolutely sure are <em>not</em> ISIS members themselves) to “get out of [their] trucks and run away.”&nbsp;</p> <p><a href="" style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 13.3333px; line-height: 17.3333px;"><img src="" width="600" height="282" style="max-width: 100%; height: auto;" /></a></p> <p>The peculiar thing about the US strikes is that it took The Pentagon nearly 14 months to figure out that the most effective way to cripple Islamic State’s oil trade is to bomb... <em>the oil</em>. </p> <p>Prior to November, the US “strategy” revolved around bombing the group’s oil infrastructure. As it turns out, that strategy was minimally effective at best and it’s not entirely clear that an effort was made to inform The White House, Congress, and/or the public about just how little damage the airstrikes were actually inflicting. There are <a href="">two possible explanations</a> as to why Centcom may have sought to make it sound as though the campaign was going better than it actually was, i) national intelligence director James Clapper pulled a Dick Cheney and pressured Maj. Gen. Steven Grove into delivering upbeat assessments, or ii) The Pentagon and the CIA were content with ineffectual bombing runs because intelligence officials were keen on keeping Islamic State’s oil revenue flowing so the group could continue to operate as a major destabilizing element vis-a-vis the Assad regime.&nbsp;</p> <p>Ultimately, Russia cried foul at the perceived ease with which ISIS transported its illegal oil and once it became clear that Moscow was set to hit the group’s oil convoys, the US was left with virtually no choice but to go along for the ride. Washington’s warplanes destroyed another 280 trucks earlier this week. Russia <a href="">claims to have vaporized</a> more than 1,000 transport vehicles in November.&nbsp;</p> <p>Of course the most intriguing questions when it comes to Islamic State’s $400 million+ per year oil business, are: where does this oil end up and who is facilitating delivery? In an effort to begin answering those questions we wrote:&nbsp;</p> <ul> <li><a href="">The Most Important Question About ISIS That Nobody Is Asking</a></li> <li><a href="">Meet The Man Who Funds ISIS: Bilal Erdogan, The Son Of Turkey's President</a></li> </ul> <p>Turkey's role in facilitating the sale of Islamic State oil has been the subject of some debate for quite a while. From "<a href="">NATO is harbouring the Islamic State: Why France’s brave new war on ISIS is a sick joke, and an insult to the victims of the Paris attacks</a>", by Nafeez Ahmed:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>"Turkey has played a key role in facilitating the life-blood of ISIS’ expansion: black market oil sales. Senior political and intelligence sources in Turkey and Iraq confirm that Turkish authorities have actively facilitated ISIS oil sales through the country.&nbsp;Last summer, Mehmet Ali Ediboglu, an MP from the main opposition, the Republican People’s Party, estimated the quantity of ISIS oil sales in Turkey at about $800 million—that was over a year ago.&nbsp;By now, this implies that Turkey has facilitated over $1 billion worth of black market ISIS oil sales to date."</em></p> </blockquote> <p>Here's what former CHP lawmaker&nbsp;Ali Ediboglu said last year:&nbsp;</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>“$800 million worth of oil that ISIS obtained from regions it occupied this year [the Rumeilan oil fields in northern Syria — and most recently Mosul] is being sold in Turkey. They have laid pipes from villages near the Turkish border at Hatay. Similar pipes exist also at [the Turkish border regions of] Kilis, Urfa and Gaziantep. They transfer the oil to Turkey and parlay it into cash. They take the oil from the refineries at zero cost. <strong>Using primitive means, they refine the oil in areas close to the Turkish border and then sell it via Turkey. This is worth $800 million.”</strong></em></p> </blockquote> <p>Earlier this month, Ediboglu told Russian media that "ISIL holds the key to these deposits and together with a certain group of persons, consisting of those close to Barzani and <strong>some Turkish businessmen,</strong> they are engaged in selling this oil" ("Barzani" is a reference to&nbsp;Masoud Barzani, President of the&nbsp;Iraqi Kurdistan Region).&nbsp;</p> <p>But even as Turkey's ties to the ISIS oil trade have been hiding in plain sight for the better part of two years, the Western media largely ignores the issue (or at least the scope of it and the possible complicity of the Erdogan government) because after all, Turkey is a NATO member.&nbsp;</p> <p>Unfortunately for Ankara, Erdogan's move to shoot down a Russian Su-24 near the Syrian border on Tuesday prompted an angry Vladimir Putin to throw Turkey under the ISIS oil bus for the entire world to see. Here's what Putin said yesterday after a meeting in Moscow with French President Francois Hollande:&nbsp;</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>"Vehicles, carrying oil, lined up in a chain going beyond the horizon. The views resemble a living oil pipe stretched from ISIS and rebel controlled areas of Syria into Turkey. <strong>Day and night they are going to Turkey. Trucks always go there loaded, and back from there – empty. We are talking about a commercial-scale supply of oil </strong>from the occupied Syrian territories seized by terrorists. It is from these areas [that oil comes from], and not with any others. And we can see it from the air, where these vehicles are going."</em></p> </blockquote> <p>“We assume that the top political leadership of Turkey might not know anything about this [illegal oil trade although that's] hard to believe," Putin continued, adding that “if the top political leadership doesn’t know anything about this, let them find out."</p> <p><img src="" width="600" height="298" /></p> <p>Obviously, Putin is being sarcastic. He very clearly believes that the Erdogan government is heavily involved in the transport and sale of ISIS crude. In the immediate aftermath of the Su-24 incident, Putin said the following about Ankara:</p> <ul> <li><span style="font-size: 1em; line-height: 1.3em;">PUTIN: OIL FROM ISLAMIC STATE IS BEING SHIPPED TO TURKEY</span></li> <li><span style="font-size: 1em; line-height: 1.3em;">PUTIN SAYS ISLAMIC STATE GETS CASH BY SELLING OIL TO TURKEY</span></li> </ul> <p>As part of our continuing effort to track and document the ISIS oil trade, we present the following excerpts from a study by&nbsp;George Kiourktsoglou, Visiting Lecturer, University of Greenwich, London and Dr Alec D Coutroubis, Principal Lecturer, University of Greenwich, London. The paper, entitled "<em>ISIS Gateway To Global Crude Oil Markets</em>," looks at tanker charter rates from&nbsp;the port of Ceyhan in an effort to determine if Islamic State crude is being shipped from Southeast Turkey.&nbsp;</p> <p>* &nbsp;* &nbsp;*</p> <p><em>From "<a href="">ISIS Gateway To Global Crude Oil Markets</a>"</em></p> <p>The tradesmen/smugglers responsible for the transportation and sale of the black gold send convoys of up to thirty trucks to the extraction sites of the commodity. They settle their trades with ISIS on site, encouraged by customer friendly discounts and deferred payment schemes. &nbsp;In this way, crude leaves Islamic State-run wells promptly and travels through insurgent-held parts of Syria, Iraq and Turkey.&nbsp;</p> <p>Since allied U.S. air-raids do not target the truck lorries out of fear of provoking a backlash from locals, the transport operations are being run efficiently, taking place most of times in broad daylight. Traders lured by high profits are active in Syria (even in government-held territories), Iraq and south-east Turkey.</p> <p>The supply chain comprises the following localities: Sanliura, Urfa, Hakkari, Siirt, Batman, Osmaniya, Gaziantep, Sirnak, Adana, Kahramarmaras, Adiyaman and Mardin. <strong>The string of trading hubs ends up in Adana, home to the major tanker shipping port of Ceyhan.&nbsp;</strong></p> <p><strong><img src="" width="594" height="304" /><br /></strong></p> <p>Ceyhan is a city in south-eastern Turkey, with a population of 110,000 inhabitants, of whom 105,000 live in the major metropolitan area. It is the second most developed and most populous city of Adana Province, after the capital Adana with a population of 1,700,000. It is situated on the Ceyhan River which runs through the city and it is located 43 km east of Adana. Ceyhan is the transportation hub for Middle Eastern, Central Asian and Russian oil and natural gas (Municipality of Ceyhan 2015).</p> <p><img src="" width="596" height="332" /></p> <p>The port of Ceyhan plays host to a marine oil terminal that is situated in the Turkish Mediterranean and has been operating since 2006. It receives hydrocarbons for further loading in tankers, which carry the commodity to world markets.</p> <p>Additionally, the port features a cargo pier and an oil-terminal, both of 23.2m depth that can load tankers of more than 500 feet in length ( 2015). The annual export capacity of the terminal runs as high as 50 million tonnes of oil. <span style="text-decoration: underline;"><strong>The terminal is operated by Botas International Limited (BIL), a Turkish state company that also operates the Baku-Tbilisi-Ceyhan pipeline on the territory of Turkey.&nbsp;</strong></span></p> <p>The quantities of crude oil that are being exported to the terminal in Ceyhan, exceed the mark of one million barrels per day. Putting this number into context and given that ISIS has never been able to trade daily more than 45,000 barrels of oil (see Section 2, ‘The Upstream Oil Business of ISIS’, page 2), it becomes evident that the detection of similar quantities of smuggled crude cannot take place through stock-accounting methods. <strong>However, the authors of the present paper believe that there is another proxy-indicator, far more sensitive to quantities of ultracheap smuggled crude. This is the charter rates for tankers loading at Ceyhan.</strong></p> <p>The Baltic Exchange (2015 a) tracks the charter rates on major seaborne trading routes of crude oil. To render its service more efficient and easily understood, it uses the system of Baltic Dirty Tanker Indices (Baltic Exchange 2015 b). One of these indices used to be the BDTI TD 11, 80,000 Cross Mediterranean from Baniyas, Syria to Laveras, France (see Map VI). Route 11 was discontinued in September 2011, due to Syria’s civil war and soon thereafter, <strong>it was replaced by BDTI TD 19</strong> (TD19-TCE_Calculation 2015), of exactly the same technical specifications as BDTI TD 11, with the exception of the loading port of Ceyhan instead of Baniyas.</p> <p><strong>From July 2014 until February 2015, the curve of TD 19 features three unusual spikes that do not match the trends featured by the rest of the Middle East trade-routes </strong>(see Graph IV):&nbsp;</p> <ol> <li>The first spike develops from the 10th of July 2014 until the 21st, lasting approximately ten days. It coincides with the fall of Syria’s largest oil field, the AlOmar, in the hands of ISIS (Reuters 2014);&nbsp;</li> <li>The second spike takes place from the end of October until the end of November 2014, lasting one month. It happens at the same time with fierce fighting between fundamentalists and the Syrian army over the control of the Jhar and Mahr gas fields, as well as the Hayyan gas company in the east of Homs province (International Business Times 2014; Albawada News 214);&nbsp;</li> <li>The third spike lasts from the end of January 2015 until the 10th of February, stretching roughly ten days. It happens simultaneously with a sustained US-led campaign of airstrikes pounding ISIS strongholds in and around the town of Hawija east of the oil-rich Kirkuk (Rudaw 2015);</li> </ol> <p><a href=""><img src="" width="600" height="514" /></a></p> <p>&nbsp;</p> <p>The authors of this paper would like to make it clear from the very beginning that this has not been the case of a ‘smoking gun’. The evidence has been inconclusive. <strong>But even if volumes of ISIS crude found their way, beyond any reasonable doubt, to the international crude oil markets via the Ceyhan terminal, this fact would not conclusively point to collusion between the Turkish authorities and the shadow network of smugglers, let alone ISIS operatives.</strong> </p> <p><strong>However, having clarified such a politically sensitive issue, the authors believe that there are strong hints to an illicit supply chain that ships ISIS crude from Ceyhan.</strong> Primary research points to a considerably active shadow network of crude oil smugglers and traders (see section 2.1, page 3), who channel ISIS crude to southeast Turkey from northeast Syria and northwest Iraq. Given the existence of Route E 90, the corresponding transportation of oil poses no unsurmountable geographic and topological challenges.</p> <p>An additional manifestation of the invisible nexus between Ceyhan and ISIS became evident through the concurrent study of the tanker charter rates from the port and the timeline of the terrorists’ military engagements (see section 3.4 on this page). <span style="text-decoration: underline;"><strong>It seems that whenever the Islamic State is fighting in the vicinity of an area hosting oil assets, the 13 exports from Ceyhan promptly spike. This may be attributed to an extra boost given to crude oil smuggling with the aim of immediately generating additional funds, badly needed for the supply of ammunition and military equipment.</strong></span> Unfortunately, in this case too, the authors cannot be categorical.</p> <p>* &nbsp;* &nbsp;*</p> <p>No, it can't be categorical and frankly, if the authors claimed to have discovered indisputable proof, we would be immediately skeptical. What they have done however, is identify a statistical anomaly and develop a plausible theory to explain it. </p> <p>The key thing to note, is that this is a <strong>state-run terminal</strong> and it certainly seems as though charter rates spike around significant oil-related events involving Islamic State. Indeed, the fact that the authors mention collusion between Turkish authorities and ISIS operatives (even if they do so on the way to hedging their conclusions) indicates that the researchers think such a partnership is possible.&nbsp;</p> <p><img src="" width="600" height="280" /></p> <p>Finally, note that Ceyhan is less than two hours by car from Incirlik air base from which the US is flying anti-ISIS sorties. In other words, ISIS oil is being shipped to the world right down the road from Washington's preferred Mid-East forward operating base.</p> <p>Now that we can add what looks like quantitative evidence that ISIS oil is shipped from Turkey to the voluminous qualitative evidence supplied by ex-Turkish lawmakers, investigative reporters, and the Russian government (to name just a few sources), we can now proceed to consider one final question: where does the crude that helps to fund Bakr al-Baghdadi's caliphate ultimately end up? More on that over the weekend.</p> B+ Crude Crude Oil France Iraq Middle East national intelligence Natural Gas Reuters Turkey Vladimir Putin White House Fri, 27 Nov 2015 20:00:48 +0000 Tyler Durden 517150 at US Ally Saudi Arabia's New King Likes Beheading People More Than His Predecessor <p>Saudi Arabia is planning to execute dozens of people in a single day, according to Amnesty International who warn that <strong><em>&quot;it is clear that the Saudi Arabian authorities are using the guise of counter-terrorism to settle political scores.&quot;</em></strong><a href=""> As The BBC reports,</a> 55 people were awaiting execution for &quot;terrorist crimes&quot;, while a now-deleted report by al-Riyadh said 52 would die soon; which is on top of the <strong>&quot;at least 151 people&quot; who have been put to death since Saudi Arabia&#39;s current King Salman rose to power</strong> after the death of King Abdullah in January 2015, dramatically higher than the <strong>total of 90 in 2014</strong>.</p> <p><a href="">As Vice News reports</a> Amnesty International criticized the wave of executions, calling it &quot;a grim new milestone in the Saudi Arabian authorities&quot; use of the death penalty.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;The Saudi Arabian authorities appear intent on continuing a bloody execution spree which has seen at least 151 people put to death so far this year &mdash; an average of one person every two days,&quot;</strong> said James Lynch, deputy Middle East and North Africa director at Amnesty International. &quot;The use of the death penalty is abhorrent in any circumstance but it is especially alarming that the Saudi Arabian authorities continue to use it in violation of international human rights law and standards, on such a wide scale, and after trials which are grossly unfair and sometimes politically motivated.&quot;</p> <p>&nbsp;</p> <p><strong>The last time Saudi Arabia executed more than 150 people in a single year was when 192 executions were recorded in 1995. </strong>No one at Saudi Arabia&#39;s Justice Ministry was immediately available to comment on the surge in the numbers of executions.&nbsp; But diplomats have speculated it may be because more judges have been appointed, allowing a backlog of appeals cases to be heard.</p> <p>&nbsp;</p> <p><strong>Saudi Arabia&#39;s current King Salman rose to power after the death of King Abdullah in January 2015, </strong>and has moved to consolidate authority among his own branch of the royal family. Upon assuming power, he shook up the cabinet, appointed a new minister of justice, and placed functionaries loyal to him in positions of power throughout the state bureaucracy.</p> </blockquote> <p><strong>Saudi Arabia has long been ranked among the top five countries to use capital punishment. </strong>It ranked number three in 2014, after China and Iran, and ahead of Iraq and the United States, according to figures from Amnesty International. The same five countries executed the most prisoners in the first six months of 2015.</p> <p>However, things are about to get even crazier, <a href="">as The BBC reports,</a> Amnesty International has expressed alarm at reports that the authorities in <strong>Saudi Arabia are planning to execute dozens of people in a single day.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>The newspaper Okaz said 55 people were awaiting execution for &quot;terrorist crimes&quot;, while a now-deleted report by al-Riyadh said 52 would die soon.</strong></p> <p>&nbsp;</p> <p>They are thought to include Shia who took part in anti-government protests.</p> <p>&nbsp;</p> <p>Amnesty said that given the spike in executions this year, it had no option but to take the reports very seriously.</p> <p>&nbsp;</p> <p>The Saudi newspaper reports said those facing execution in the coming days <strong>included &quot;al-Qaeda terrorists&quot; and people from the Awamiya area.</strong></p> <p>&nbsp;</p> <p>The alleged al-Qaeda militants were accused of attempting to overthrow the government and carry out attacks using small arms, explosives and surface-to-air missiles, Okaz reported.</p> <p>&nbsp;</p> <p><strong>The Awamiya residents were meanwhile convicted of sedition, </strong>attacks on security personnel and interference in neighbouring Bahrain, it said.</p> <p>&nbsp;</p> <p><strong>Awamiya is a town in the Qatif region of oil-rich Eastern Province. Since 2011, it has been the centre of protests by Saudi Arabia&#39;s Shia minority, which has long complained of marginalisation at the hands of the Sunni monarchy</strong>.</p> </blockquote> <p>Among those at imminent risk of execution were<strong> six Shia activists from Awamiya &quot;who were clearly convicted in unfair trials&quot;, </strong>according to Amnesty.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="text-decoration: underline;"><strong>&quot;It is clear that the Saudi Arabian authorities are using the guise of counter-terrorism to settle political scores,&quot; </strong></span>said James Lynch, Amnesty&#39;s Middle East and North Africa deputy director.</p> <p>&nbsp;</p> <p>&quot;Three of those six activists were sentenced for &#39;crimes&#39; committed while they were children and have said that they were tortured to confess.&quot;</p> </blockquote> <p>US ally Saudi Arabia argues that death sentences are carried out in line with Sharia and with the strictest fair trial standards and safeguards in place. <a href=""><strong>Here are 10 sobering facts from Amnesty International&rsquo;s research: </strong></a></p> <p><strong>1. CRUEL, INHUMAN AND DEGRADING PUNISHMENT</strong></p> <p>Saudi Arabia&rsquo;s courts continue to impose sentences of flogging as punishment for many offences, often following unfair trials. Besides <a href="">Raif Badawi</a>, in the past two years the human rights defenders Mikhlif bin Daham al-Shammari and Omar al-Sa&rsquo;id were sentenced to 200 and 300 lashes, respectively, and Filipino domestic worker Ruth Cosrojas was sentenced to 300. <strong>Amputations and cross-amputations are also carried out as punishment for some crimes.</strong></p> <p><strong>2. SPIKE IN EXECUTIONS</strong></p> <p>Saudi Arabia is among the world&rsquo;s top executioners, with dozens of people being put to death annually, many in&nbsp;<a href="">public beheadings</a>. <strong>So far this year&nbsp;<a href="">40 people have been executed</a></strong>&ndash; almost four times the equivalent number for this time last year.</p> <p><strong>3. CRACKDOWN ON ACTIVISTS</strong></p> <p>Besides Raif Badawi, dozens more outspoken activists remain behind bars, simply for exercising their rights to freedom of expression, association and assembly. The authorities have&nbsp;<a href="">targeted the small but vocal community of human rights defenders</a>, including by using anti-terrorism laws to suppress their peaceful actions to expose and address human rights violations.</p> <p><strong>4. NO SPACE FOR DISSENT</strong></p> <p>All public gatherings, including demonstrations, remain prohibited under an order issued by the Interior Ministry in 2011. Those who defy the ban face arrest, prosecution and imprisonment on charges such as &ldquo;inciting people against the authorities&rdquo;.</p> <p><strong>5. SYSTEMATIC DISCRIMINATION AGAINST WOMEN</strong></p> <p>Women and girls remain subject to discrimination in law and practice, with laws that subordinate their status to men, particularly in relation to family matters such as marriage, divorce, child custody and inheritance. Women who supported&nbsp;a campaign against a de facto ban on <strong><a href="">women drivers&nbsp;face the threat of arrest</a> and other harassment and intimidation.</strong></p> <p><strong>6. ROUTINE TORTURE IN CUSTODY</strong></p> <p>Former detainees, trial defendants and others have told Amnesty International that the security forces&rsquo; use of torture and other ill-treatment remains common and widespread, and that those responsible are never brought to justice.</p> <p><strong>7. ARBITRARY ARREST AND DETENTIONS</strong></p> <p>Scores of people have been arrested and detained in pre-trial detention for six months or more, which breaches the Kingdom&rsquo;s own criminal codes. <strong>Detainees are frequently held incommunicado</strong> during their interrogation and denied access to their lawyers. Some human rights activists have been detained without charge or trial for more than two years.</p> <p><strong>8. ENTRENCHED RELIGIOUS DISCRIMINATION</strong></p> <p>Members of the Kingdom&rsquo;s Shi&rsquo;a minority, most of whom live in the oil-rich Eastern Province, continue to face entrenched discrimination that limits their access to government services and employment.&nbsp;<strong><a href="">Shi&rsquo;a activists</a> have received death sentences</strong>&nbsp;or long prison terms for their alleged participation in protests in 2011 and 2012.</p> <p><strong>9. MASS DEPORTATION OF MIGRANT WORKERS</strong></p> <p>According to the Interior Ministry, a crackdown on irregular foreign migrant workers in November 2013 led to the <strong>deportation of more than 370,000 people</strong>. Some 18,000 were still being detained last March. Thousands of people were summarily returned to Somalia, Yemen or other states where they were at risk of human rights abuses.</p> <p><strong>10. WHAT HAPPENS IN THE KINGDOM, STAYS IN THE KINGDOM</strong></p> <p>The Saudi Arabian authorities continue to deny access to independent human rights organizations like Amnesty International, and they have been known to take punitive action, including through the courts, against activists and family members of victims who contact us.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="172" height="175" alt="" src="" /> </div> </div> </div> China Iran Iraq Middle East Newspaper Saudi Arabia Somalia Fri, 27 Nov 2015 19:30:00 +0000 Tyler Durden 517139 at