"...so many still maintain that America is the greatest nation in the world. They swear that America represents all that is good; freedom, democracy, merit based capitalism and the rights of the individual. That is true America does represent such things. However, it is fraudulent to consider our current nation America. America was a concept that promoted all that is good. And so it would seem that the nation in which they find themselves cannot be America. Their nation today represents the will of the political class at all costs, period. Their sole motivation is themselves. Very different from America. And so perhaps a renaming on the nation is required, at least until or if the people decide to take it back and reintroduce the world to the concept that is America for as discussed below you cannot destroy a concept and so there is hope to bring her back. But until then we need a name for this geographic region and its new societal system... It seems"Neoconica" is most fitting."
Skirmishes in the South China Sea lead to full-scale naval confrontation. Israel bombs Iran, setting off an escalation of violence across the Middle East. Nigeria crumbles as oil prices fall and radicals gain strength. Bloomberg News asked foreign policy analysts, military experts, economists and investors to identify the possible worst-case scenarios, based on current global conflicts, that concern them most heading into 2015.
Russia is trying to provoke the West once again...
- Ruble Sinks to 80 a Dollar Defying Surprise Russia Rate Increase (BBG)
- Oil slumps near $59 for first time since 2009 on oversupply (Reuters)
- Oil sinks, Russian moves fail to quell nerves (Reuters)
- Fed Seen Looking Past Low Inflation to Drop ‘Considerable Time (BBG)
- Students Among Dead as Pakistan Gunmen Kill 126 at Army School (BBG)
- Repsol to buy Talisman Energy for $13 billion (Reuters)
- Indonesia’s Rupiah Erases Decline After Central Bank Intervenes (BBG)
- Anti-Islam Rally Grows as Immigrant Backlash Hits Europe (BBG)
- Saudi Arabia is playing chicken with its oil (Reuters)
In 1985, the Saudis chose volume over price to defend their market share against new production from the North Sea, as well as cheating/discounting from other OPEC members in a period of weak demand. The Saudis had warned the world of their intentions, but many thought “it was merely an elaborate warning designed to scare other OPEC countries and restore discipline.” The parallels with today’s market structure are hard to miss, and the Saudi’s essential playbook remains the same...
Slowing the rebalancing and creating further downside risk is a very strong consensus view that this pull back is temporary and that oil prices will quickly rebound as they did in 2009. According to a recent Bloomberg survey, the median WTI forecast for 2016 is $86/bbl (even we forecast it going back to $80/bbl). All of these forecasts are based upon now outdated cost data that is shifting as fast as the price. It is precisely this strong view for a rebound in prices and the behavior it creates, that not only suggests that oil prices can go lower for longer, but also that the new normal is far lower than we thought just one month ago. Instead of optimizing against a lower price environment, many oil producers are trying to position themselves for the rebound in prices
One of the very strange non-sequiturs in today's Syndey hostage siege, now approaching its 15th hour, is that the gunman who prepared for a long standoff with authorities somehow forgot to pack the ISIS flag and as reported earlier, has been said to demand it from the outside world. Strange to say the least. But the bigger question remains: who is he? Now, courtesy of a report in Australia's The Age we know. The man who continues to hold more than a dozen people hostage, placing Sydney's CBD into lockdown is no stranger to the NSW police or the judiciary. Self-described cleric, Man Haron Monis, 50, first came to attention of police when he penned poisonous letters to the family of dead Australian soldiers seven years ago. Last year he was charged with being an accessory to the murder of his ex-wife and mother of two.
In space, no one can hear you scream... unless you happen to be Venezuela's (soon to be former) leader Nicolas Maduro, who has been doing a lot of screaming this morning following news that UAE's Energy Minister Suhail Al-Mazrouei said OPEC will stand by its decision not to cut crude output "even if oil prices fall as low as $40 a barrel" and will wait at least three months before considering an emergency meeting.
Oil is not just something that is refined into fuel--it is capital, collateral, debt and risk. In other words, it is intrinsically financial. Simply put, the sharp drop in oil revenues has knocked over a line of financial dominoes whose end is not yet in sight.
Sometimes I wish I could just passively accept what my government monarchs and their mainstream media mouthpieces feed me on a daily basis. Why do I have to question everything I’m told? Life would be much simpler and I could concentrate on more important things like the size of Kim Kardashian’s ass... The willfully ignorant masses, dumbed down by government education, lured into obesity by corporate toxic packaged sludge disguised as food products, manipulated, controlled and molded by an unseen governing class of rich men, and kept docile through never ending corporate media propaganda, are nothing but pawns to the arrogant sociopathic pricks pulling the wires in this corporate fascist empire of debt.
New oil projects are being scrapped in Norway amid falling production and low oil prices. The governor of Norway’s central bank says western Europe’s biggest oil producer is facing a major economic slowdown as crude prices continue to plunge. As Bloomberg reports, Oeystein Olsen said today after unexpectedly cutting rates and shocking markets to a new 5 year low in NOKEUR, "our job now is that we need to prevent a severe downturn in the economy... that is presently the major concern of the board."
- Shale operaters Goodrich, Oasis Petroleum cut spending for 2015 as oil slides (Reuters)
- Greece to hold elections in January if president vote fails (Reuters)
- Norway’s Shock Rate Cut Drives Krone to Lowest Since 2009 (BBG)
- ‘Severe Downturn’ Threatening Norway, Central Bank Governor Says (BBG)
- Russia’s Fifth Rate Increase Fails to Halt Ruble Slide to Record (BBG)
- SNB Says Deflation Risks Increased as Franc Cap Maintained (BBG)
- China eases bank lending restrictions, PBOC targets 10 trillion yuan in loans for 2014 (Reuters)
- Mobius Says China’s Bull Market Is Just Getting Started (BBG)
- How Wal-Mart Made Its Crumbling China Business Look So Good for So Long (BBG)
- New Normal headlines: Global stocks up on hopes of China policy easing (Reuters)
- China inflation eases to five-year low (BBC)
- U.S. Lawmakers Agree on $1.1 Trillion Spending Bill (WSJ)
- U.S. Braced for Blowback as CIA Report Lays Bare Abuses (BBG)
- CIA tortured, misled, U.S. report finds, drawing calls for action (Reuters)
- CIA Made False Claims Torture Prevented Heathrow Attacks (BBG)
- Oil Resumes Drop as Iran Sees $40 If There’s OPEC Discord (BBG)
- OPEC Says 2015 Demand for Its Crude Will Be Weakest in 12 Years (BBG)
- Greek yield curve inverted as politics raise default fears (Reuters)
Now that China is on the same boat as the rest of the world, and its stock market is a direct reflection of hopes for constant liquidity injections by the central banks, nothing could be better for stocks than bad news, which is precisely what it got. After the biggest crash in the Shanghai Composite in 5 years, what China got just the bad economic update it needed, when it reported a PPI of PPI (-2.7%, Exp. -2.4%), the 33rd consecutive decline and a CPI (1.4%, Exp. 1.6%), lowest since November 2009, when the big banks’ RRR rate stood at 15.5% vs. current 20%. And so hope of yet more PBOC interventions to halt China's deflation promptly reversed SHCOMP losses of over 4% on the session (at which point it was just shy of correction territory from recent highs hit just this week), and stocks surged to close up almost 3%, erasing half of yesterday's losses. This spike came despite reports Chinese regulators may limit brokerages' interbank borrowing.
The crude carnage continued overnight with oil prices across the entire complex crashing through support to new cycle lows. Despite recent strategic reservce demand in China, the world's oil glut continues as global growth expectations plunge leaving WTI trading as low as $64.10, Brent $66.77 (narrowing the Brent-WTI spread to $2.68 from $3.23 on Friday), and most stunning of all, Canada Heavy as low as $49.24. Speculators and money managers appear to be BTFD as they increased net long positions last week (amid the price slump) but comments from Kuwait Petroleum's CEO and Iran officials suggest 'lower for longer' on prices will be the norm. As Morgan Stanley notes, "with OPEC on the sidelines, oil prices face their greatest threat since 2009 and appear on track for an extremely volatile 2015"