Saudi Arabia

"We have tortured and killed and maimed and raped around this planet. We don't operate under international law... who in their right mind would consider the United States or the West in general to be in any position to punish anybody? All of these players, these politicians are nothing more than puppets, they don't serve the people there is no real democracy, they serve the rich and powerful who run the world and that would be the bankers who control the money supply. The bankers make huge amounts of money....wars are great for them and ultimately they control the politicians. Psychopaths are running the world." - Ken O'Keefe, former US Marine

"The shale sector is now being financially stress-tested, exposing shale’s dirty secret: many shale producers depend on capital market injections to fund ongoing activity because they have thus far greatly outspent cash flow."

"One-by-one, the oil-majors will start to participate, then others will follow. While it might take some time to establish itself due to choppy markets and regulatory hurdles as well as the fact that it would introduce a foreign exchange element to crude futures, it is overdue for a Chinese contract to established."

"While we are increasingly convinced that the market needs to see lower oil prices for longer to achieve a production cut, the source of this production decline and its forcing mechanism is growing more uncertain, raising the possibility that we may ultimately clear at a sharply lower price with cash costs around $20/bbl Brent prices."

At least 87 people were killed after a crane crashed earlier today in Mecca's Grand Mosque with Saudi Arabia's Civil defense adding another 184 people were injured in the fatal accident which takes place just weeks before Islam's annual Hajj pilgrimage which takes place between September 21-26. Some point out pictures circulating on social networks of what may have been a lightning strike hitting the crane just moments before the fatal crash. Others point out the macabre coincidence that this tragedy takes place on the 14th anniversary of September 11.

• One Volatile Week Could Seal Fed Stance After Years of Low Rates (BBG)
• Fed to dominate week of central bank meetings (Reuters)
• 30 years on, parallels with Plaza but currency universe very different (Reuters)
• Wal-Mart's Suppliers Are Finally Fighting Back (BBG)
• China's Rising CPI, Deepening PPI Deflation Challenges PBOC (BBG)
• Petrobras spending plan already obsolete, new cuts likely (Reuters)
• Bank of Montreal to Buy GE Capital’s Transportation-Finance Unit (WSJ)

Perhaps after intervening every single day in the past week (remember that FT piece saying the PBOC would no longer directly buy stocks... good times) in either the stock or the FX (both on and offshore) market, China needed a day off; perhaps even the algos got tired of constantly spoofing the E-mini and inciting momentum ignition, but for whatever reason the overnight session has been oddly uneventful, with no ES halts so far, few USDJPY surges (then again those come just before the US open), and even less violent CNY or CNH moves, leading to virtually unchanged markets in Japan (small red) and China (small green). And while the initial tone in Europe has been modestly "risk off", it is nothing in comparison to the massive gyrations that have become a stape in the past few weeks.

The latest twist in what we have been warning for months has the makings of the biggest proxy shooting war in years, one that will come as a major humiliation to the Obama administration, today we find out that none other than America's most recent diplomatic sweetheart in the Gulf region, Iran, has deployed ground soldiers into Syria in the past few days in cooperation with Russia's President Vladimir Putin.

This level of global inter-connected financial risk is hazardous in Mexico, where it’s peppered by high bank concentration risk. No one wants another major financial crisis. Yet, that’s where we are headed absent major reconstructions of the banking framework and the central bank policies that exude extreme power over global economies and markets, in the US, Mexico, and throughout the world. Mexico’s problems could again ripple through Latin America where eroding confidence, volatility, and US dollar strength are already hurting economies and markets. The difference is that now, in contrast to the 1980s and 1990s debt crises, loan and bond amounts have not just been extended by private banks, but subsidized by the Fed and the ECB.  The risk platform is elevated. The fall, for both Mexico and its trading partners like the US, likely much harder.

On September 25th, Pope Francis will address the United Nations General Assembly in New York City. To much fanfare, the Pope will celebrate the unveiling of the UN’s Sustainable Development Agenda 2030. A key plank of this agenda relates to the UN’s “Sustainable Development Goals,” or SDGs. While this sounds all warm and fuzzy, several well meaning participants have become horrified by the extent to which multi-national corporations have influenced the entire process. So much so, that insiders are claiming the UN is actually marginalizing the very people it claims to be saving. The poor, the weak, and the voiceless.

Don’t let anyone fool you: As we have detailed since 2013, sectarian strife in Syria has been engineered to provide cover for a war for access to oil and gas, and the power and money that come along with it.

And monetary policies will be “ineffective”: Natixis

News That Matters

Now that Europe's migrant crisis is making international headlines on a nightly basis, France and Britain are set to use the influx of aslylum seekers as a pretext for airstrikes in Syria. The timing could not be more convenient as new "intelligence" suggests that Russia is expanding its presence in the Assad stronghold around Latakia. For its part, Germany is out warning the Kremlin against "military engagement."

In hot spot after hot spot in the Middle East, U.S. and Saudi objectives and priorities diverge, even if in some loose sense they are considered to be on the same side. It ought to be astounding that a place this far removed from the liberal democratic values with which the United States likes to be associated, even without considering the aforementioned divergence of objectives elsewhere in the region, still is considered a close partner of the United States. The usual, and to a large degree valid, explanation is that, as Friedman puts it, “we’re addicted to their oil and addicts never tell the truth to their pushers.”