Saturday, January 30, 2016

Today's links

1--Subprime, again?

The report explained, “credit standards are becoming more accommodating to meet market demand.”

Of course. We knew that. We figured that out during the last subprime fiasco. And so the inevitable: “The industry is also seeing an increase in subprime activity within the home equity market.”...

2--This is a great moment for the US housing market

The Fed has finally healed it. We’re back to our old tricks. Home prices have been inflated to crazy levels in many cities. And now everyone is once again certain that you can’t lose money in real estate, that home prices will always go up, and that at worst, there might be a “plateau” for a few months. Forgotten are the lessons, bank collapses, bailouts, and shenanigans of just a few years ago.

Economists are once again hoping that consumers – prime and subprime borrowers alike – will use their inflated home prices as miracle ATMs, to extract the home price increases via HELOCs, home equity installment loans, and refis, and that they spend this money quickly before the next housing crash comes along and pulls the rug out from under all of it.

3---Already Lousy Corporate Investment Comes Totally Unglued

Note the mini-boom from October 2013 to September 2014, when capital goods orders hit an all-time peak of $73.9 billion, and when hope began to circulate that businesses would finally invest again, that the drought was over. But then it all came unglued, and investment in capital goods has since plunged 11%....

Years of QE and ZIRP, instead of generating a tsunami of investment in productive activities, and thus economic growth, have pushed financial engineering – share buybacks and M&A – to new levels that have left corporate America more leveraged, more fragile, and more financially unstable than ever before. As companies are starting to grapple with the consequences of their financial engineering strategies in this environment, business investment is going to be relegated to an afterthought. And this will be a further whack-down for the already limping economy.

4---Oversold Oil Markets Rally On Rumors Of OPEC Cut

Oil prices surged this week on speculation that Russian and OPEC might work together to stabilize markets through coordinated production cuts. The latest developments are confusing due to conflicting statements from officials from both sides. Russia’s energy minister said that the country would consider a proposal of a 5 percent production cut, but would wait to discuss the option with OPEC in February. At the same time, top OPEC officials dismissed the speculation. Other Russian officials also downplayed the possibility of a production cut. The markets did not care – WTI and Brent surged to $34 per barrel by Friday, up nearly 10 percent for the week.

One worrying sign to keep an eye on: the fundamentals. The EIA reported a sharp uptick in crude oil inventories this week, breaking a new all-time high. U.S. oil in storage has now reached 494.9 million barrels, surpassing the previous record set in April 2015.

5---Chinese Slowdown and the World Economy

6--Bank of Japan's negative rates are 'economic kamikaze'

7--Americans Thrive, Companies Dive, Bloomberg

Consumer spending grew last year by the most since 2005, in spite of a slight slackening in the fourth quarter. Nonresidential business investment, meanwhile, rose at its slowest pace since 2010 as oil and gas companies sharply curtailed spending.

8--All sides should drop preconditions for Syria talks: Russia

9--The Guardian view on the geopolitics of falling oil prices

The oil shocks of the 1970s reshaped the global landscape and lent new significance to the Middle East. When prices collapsed in the mid-1980s, the Soviet Union’s final demise owed much to the collapse in its export revenues. Saddam Hussein’s 1990 invasion of Kuwait derived in part from an ambition to capture new lands at a time of financial stringency. In Algeria, another country dependent on oil revenues, that same price collapse – which reduced the price of crude to below $10 a barrel – contributed to an election victory for Islamists, then a coup, and then civil war. All of this makes it difficult to draw clearcut conclusions about strategic winners and losers. Of course, the liberal democracies of the west benefited from the end of the Soviet bloc, but it is hard to argue that low oil prices in the Arab and Muslim world led to much peace and stability....

if a falling oil price hurts those countries the west would view warmly, it also has the power to hurt those it would regard as adversaries. In Russia, Vladimir Putin appears determined to re-establish his nation as a major power through military adventurism on the European continent and in the Middle East. Now he will increasingly find himself confronted with a complex financial equation....

 nowhere are the geopolitical consequences of low oil prices more unpredictable than in the Middle East. For Saudi Arabia, orchestrating the price drop, it is a key factor that might weaken its regional rival Iran as the latter returns to the oil export market

(SEE for more:

10--- ‘the Democratic Party is the graveyard of social movements., Rob Urie

Any notion that governance in the broad public interest is achievable within the Democrat Party is delusional. The point in recounting Party history is to demonstrate both the continuity of the prevailing neoliberal / militarist (neoconservative) vision since the 1970s and the depth of its institutional support.....

Here is a selective restatement of more ignominious moments in recent Democrat history:

Bill Clinton entered office declaring a phony fiscal ‘emergency’ that he used to limit, and eventually cut, Federal social spending. Through ‘ending-welfare-as-we-know-it’ Mr. Clinton joined the Republican right to attack poor people through the claim that welfare represented the personal failings of welfare recipients rather than the social failure to create jobs. Mr. Clinton then used barely concealed racist appeals to pass ‘three-strikes, you’re out’ sentencing ‘reform’ that greatly exacerbated the human catastrophe of mass-incarceration. Mr. Clinton deregulated Wall Street thereby enhancing the destructive power of modern finance, he passed NAFTA after conservative Republicans had been unable to pass it on their own, murdered a few hundred thousand Iraqi children through punitive sanctions and he publicly supported George W. Bush’s catastrophic rush to war in 2003.

Barack Obama entered office in the midst of Republican plans to bail out Wall Street and the U.S. auto industry and he aggressively pursued the very worst of both. The automaker bailouts restored corrupt, incompetent management at full salaries plus bonuses while maintaining the tiered wages that paid newer autoworkers poverty wages. Although models existed for socially beneficial bank restructuring Mr. Obama chose the less effective and more corrupt route of fully restoring Wall Street bankers who then blamed their own misdeeds on ‘big government.’ Mr. Obama codified extra-judicial murders, expanded and then lied about government spying on citizens, launched and / or perpetuated right-wing coups in Ukraine and Honduras and undertook de-stabilizing ‘regime-change’ in Libya, Syria, Yemen and Somalia. And Mr. Obama’s TPP and TTIP ‘trade’ agreements are a final step toward realizing total corporate control over civil governance....

Mr. Obama then impaneled a bi-partisan committee to develop plans to cut Social Security and Medicare. To be clear, it was Mr. Obama’s stated goal, his desire, to cut Social Security, it wasn’t a compromise.

To the issue of the ACA (Affordable Care Act), a/k/a Obamacare (1) health insurance isn’t health care

11--Syrian army advances towards Turkish border (cutting off critical supplylines)

12--Wall Street celebrates mounting signs of US slump

For the broad mass of the population, economic stagnation and slowdown mean a further descent into economic distress, unemployment and outright poverty. The recent developments explode the claims of economic “recovery” and confirm that the destruction of decent-paying jobs, pensions and social services that followed the Wall Street crash of 2008 is not a temporary condition, but only the beginning of a permanent and escalating attack on working class living standards.

For the financial aristocracy, on the other hand, the signs of slump are welcome indicators that the Federal Reserve will continue to pump trillions of dollars into the financial markets, delaying further interest rate increases and perhaps rolling back the initial increase it imposed in December. Bankers and hedge fund speculators were rubbing their hands on Friday in anticipation of still more cheap credit to underwrite their parasitic financial operations.

The euphoria on Wall Street was a demonstration of the essential character of what the government and media call economic “recovery.” Just over two weeks ago, President Obama in his State of the Union address praised the economic “surge” that had made the US economy “the strongest, most durable… in the world,” and said claims “America’s economy is in decline” were a “fiction.”

13--Japan moves to negative interest rates

14--Washington to escalate US Mideast wars

Read more here:

Friday, January 29, 2016

Today's Links

1--An Aging Society Is No Problem When Wages Rise , Dean Baker

2--Russian-OPEC Production Cut Remains A Long Shot, oil price

3--If the "Recovery" Is Real, Why Are Radical Politicians So Damn Popular?, BofA Asks

4--House prices could fall and the cost of home ownership could still go up

5--Oil rallied this week on false hopes for OPEC deal

6--Healthy Consumption Growth Keeps GDP Positive in 4th Quarter

The economy grew 0.7 percent in the 4th quarter, bringing its rate for the full year (4th quarter to 4th quarter) to 1.8 percent. That is a substantial slowing from the 2.5 percent rates of the prior two years. By far the major component boosting growth was consumption, which grew at a 2.2 percent annual rate, driven largely by continued strong growth in durable goods consumption, which grew at a 4.3 percent annual rate. Housing was also a big contributor to growth, expanding at an 8.1 percent annual rate and adding 0.27 percentage points to growth.

Inflation continues to be nowhere in sight. The core PCE grew at just a 1.2 percent annual rate in the quarter, bringing the increase for the year to 1.4 percent, well below the Fed's 2.0 percent target.


7--Washington Post Doubles Down in Support of TARP Wall Street Bailout

 The Washington Post is unhappy that support of the TARP appears to be a liability on the campaign trail. After all, it tells readers:

“Then-Federal Reserve Chair Ben S. Bernanke and Treasury Secretary Henry M. Paulson declared it indispensable to prevent another Great Depression.”

Yep, that would be Henry M. Paulson, who was CEO at Goldman Sachs before taking the job as Treasury Secretary. As far as Chair Bernanke’s assessment, it would be interesting to hear why he didn’t explain that the Fed single-handedly had the ability to keep the commercial paper market operating, until the weekend after TARP passed.

While the initial downturn almost certainly would have been steeper had Congress not passed the TARP and we allowed the magic of the market to sink Goldman Sachs and the other Wall Street banks, it is absurd to claim that this would have led to another Great Depression. We know the trick to get out of a Great Depression: it’s called “spending money.”

8--Robert Samuelson and the Great Stock Crash of 2015

The source of weakness in the economy is the unmentionable elephant in the center of the room, the trade deficit. We have an annual trade deficit of more than $500 billion (@3 percent of GDP). This is a gap that must be made up by increased spending in one of the other components of GDP. (This is basic accounting – it is inescapably true. If you don’t like it, then you have a problem with logic.)

In the late 1990s we filled the hole in demand with demand created by the stock bubble. In the last decade we filled the hole in demand with demand created by the housing bubble. In the absence of bubble-driven demand we could get back to full employment with larger budget deficits, but that is not fashionable with the politicians and policy wonks in Washington. Therefore, we have to spin out wheels and pretend that the weak economy is a big mystery and come up with all sorts of convoluted stories like Samuelson’s about the trauma of the Great Recession.  

One more thing, we owe our large trade deficits to the huge over-valuation of the dollar that we got in the wake of the bailout from the East Asian financial crisis in the late 1990s. This was all the doings of the Clinton administration, which directed the I.M.F.’s bailout of the region.

The failure of the bailout and bubble-driven growth path on which it set the country is why many of us cringe when they hear Hillary Clinton talk about turning to her husband for economic advice in her administration. The last thing we need is another round of bubble-driven growth. 

9--The Geneva "raft" has sunk

Thursday, January 28, 2016

Today's Links

1--Russian energy minister says S Arabia proposed oil output cuts by up to 5 pct

2--Hysteria over China has become ridiculous

3--Durable Goods Devastation: Capital Goods Orders Crash To Fresh Crisis Lows, Scream Recession

4--Office of Financial Research Warns of Corporate Debt Defaults, Particularly Related to Energy Loans, as Stability Risk

5--How The Energy Crash Revealed A Weak Global Economy

The central banks can't control commodity prices the way they control money and credit. For that reason, I think commodities are a better overall gauge of strength in the economy.

The question for investors this year will be something like this: Can central banks keep stock markets around the world afloat despite poor fundamentals? I'm doubtful. They didn't prevent a crash in 2001 or 2008, the first the result of a tech bubble and the second the result of a housing bubble. Both bubbles were caused by easy credit due to low-interest rate policies by central banks that stoked overinvestment. With short-term interest rates near zero for seven years in major economies, central banks are repeating the same mistake again.

Contrary to popular belief, central banks are not omnipotent. The oil and commodity bubbles they helped to blow have already burst. Most of the world's stocks markets are already in bear territory as of January 20. Before the late-week bounce, the U.S.-based S&P 500 Index was down 14 percent from its high in May last year. The Nasdaq Composite was off 16 percent. It's doubtful that any major stock market will simply continue to ignore what is happening in the real economy for too much longer....

The Dallas Federal Reserve Bank was reported to have encouraged banks in its jurisdiction to forebear on energy loans. Essentially, the Dallas Fed was telling banks to ignore losses in their energy portfolios until further notice so as not to cause a panic. The reserve bank quickly denied any such guidance to member banks.

The truth in this particular instance may not matter since what we do know--that energy-related junk bond losses are at 2008 crisis levels--could suggest that energy-related losses at the world's banks may end up being the size associated with the subprime mortgage crisis that brought the global economy to its knees in 2008. It is worth remembering that in 2007 then-Federal Reserve Chairman Ben Bernanke assured the U.S. Congress that "the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained."

6--Robert Samuelson and the Great Stock Crash of 2015

. Consumers are spending a larger share of their income than at any point in the last three decades, except at the peak of the housing and stock bubbles. If they have become more risk averse, it is not showing up in their spending.

The same applies to business managers. Investment spending as a share of GDP is back to its pre-recession level. It would be great if businesses would invest more, but why would we expect them to?

The source of weakness in the economy is the unmentionable elephant in the center of the room, the trade deficit. We have an annual trade deficit of more than $500 billion (@3 percent of GDP). This is a gap that must be made up by increased spending in one of the other components of GDP. (This is basic accounting – it is inescapably true. If you don’t like it, then you have a problem with logic.)

In the late 1990s we filled the hole in demand with demand created by the stock bubble. In the last decade we filled the hole in demand with demand created by the housing bubble. In the absence of bubble-driven demand we could get back to full employment with larger budget deficits, but that is not fashionable with the politicians and policy wonks in Washington. Therefore, we have to spin out wheels and pretend that the weak economy is a big mystery and come up with all sorts of convoluted stories like Samuelson’s about the trauma of the Great Recession.  

One more thing, we owe our large trade deficits to the huge over-valuation of the dollar that we got in the wake of the bailout from the East Asian financial crisis in the late 1990s. This was all the doings of the Clinton administration, which directed the I.M.F.’s bailout of the region.

The failure of the bailout and bubble-driven growth path on which it set the country is why many of us cringe when they hear Hillary Clinton talk about turning to her husband for economic advice in her administration. The last thing we need is another round of bubble-driven growth

7--Is Bank of America on Life Support?

The oncoming recession is going to challenge all four  money centers, but it represents an existential crisis for Bank of America because it's going to move from dealing with mortgage legacy issues to dealing with oil-sector loan defaults without any way of cutting costs or buying revenue by offering lower-cost C&I loans than the other three money centers.

And that assumes the federal loan modification programs that are scheduled to expire at the end of this year are extended.

If that doesn't happen, the bank will have to accelerate the process of resolution for nonperforming mortgages, taking the requisite losses at the same time it's incurring losses on the oil-sector loans, which is an imminent issue.

In that environment, the companies borrowing the C&I loans that have propped Bank of America up for the past seven years become the same ones producing losses on those loans for themselves and the bank, and also precluding new offsetting loans from being originated.

The bank has already steadily reduced its labor force for the past seven years, resulting in a 30% cut in total and the smallest number of full-time employees of all the money centers.

Bank of America is on the verge of having investors realize that the bank is in runoff mode

8--Wall Street falls on global growth fears

So far this year, there has been a near one-to-one correlation between oil prices and the movement of the share market. The fall in the oil price, now down to around $30 per barrel, affects the markets in two key areas—finance and industry.

On the financial side, this is raising concerns in the high-yield or junk bond markets, where the viability of debts incurred when oil was around $100 per barrel are called into question now that the price has plunged by more than 70 percent. “Significantly stressed” US energy companies—that is, companies whose bonds exceed the comparable rates on treasury bonds by 7 to 10 percentage points—are estimated to account for about 20 percent of the high-yield bond market.

Banks could also be directly affected because of write-downs on the loans they have made to oil companies. Even large banks, such as Wells Fargo, Bank of America and JPMorgan Chase, have expressed concern over this possibility—an indication that smaller, regional banks may face bigger problems.

Apart from expressing the general tendency of lower growth, and even recession, falling oil prices also hit major industrial firms that supply the oil producers and exploration companies.

No upturn is expected. ...

9--US-NATO Invade Libya to Fight Terrorists of Own Creation

10--The U.S. Intervention in Libya Was Such a Smashing Success That a Sequel Is Coming

Since then, Libya — so predictably — has all but completely collapsed, spending years now drowning in instability, anarchy, fractured militia rule, sectarian conflict, and violent extremism. The execution of Saddam Hussein was no vindication of that war nor a sign of improved lives for Iraqis, and the same was true for the mob killing of Qaddafi. As I wrote the day after Qaddafi fled Tripoli and Democratic Party loyalists were prancing around in war victory dances: “I’m genuinely astounded at the pervasive willingness to view what has happened in Libya as some sort of grand triumph even though virtually none of the information needed to make that assessment is known yet, including: how many civilians have died, how much more bloodshed will there be, what will be needed to stabilize that country, and, most of all, what type of regime will replace Qaddafi? … When foreign powers use military force to help remove a tyrannical regime that has ruled for decades, all sorts of chaos, violence, instability, and suffering — along with a slew of unpredictable outcomes — are inevitable...

Just as there was no al Qaeda or ISIS to attack in Iraq until the U.S. bombed its government, there was no ISIS in Libya until NATO bombed it. Now the U.S. is about to seize on the effects of its own bombing campaign in Libya to justify an entirely new bombing campaign in that same country

11---Pentagon to release almost 200 photos of tortured Afghan, Iraqi prisoners under court order

After a long-running court battle, the US District Court Judge Alvin Hellerstein ruled that the government should “disclose each and all the photographs” referring to the ACLU’s lawsuit in last March.

However, only 198 images out of some 2,100 pictures will be released on Friday. The major part of the evidence comprising approximately 1,900 photos will remain concealed after US Defense Secretary Ash Carter had invoked his authority under 2009 exemption provision last November.

 “I have determined that public disclosure of any of the photographs would endanger citizens of the United States, members of the United States Armed Forces, or employees of the United States Government deployed outside the United States,”he wrote in the certification renewal in support of his decision to appeal the ruling on November 7

Wednesday, January 27, 2016

Today's Links

1--Rush for the exits: why China's capital flight carnage will continue, Telegraph

2--Rumors of OPEC-Russia Coordination Send Oil Prices Surging, oil price

3--Ka-boom Goes the Bottom of the US Bond Market

The toxic pile of distressed corporate debt in the US grew to $285 billion in January, up 22% from a month ago and up 162% from a year ago, according to S&P Capital IQ. The number of distressed issuers ballooned to 324 US corporations, up 20% from a month ago and up 84% from a year ago.

The last time the total amounts of distressed debt and the number of distressed issuers had shot up to these levels was in October 2008, just after Lehman Brothers had filed for bankruptcy.

That’s how bad it is now in the US. It’s the essential consequence of years of artificially easy credit, the Fed-inspired blind confidence of yield-desperate investors, ludicrous corporate risk-taking to take advantage of those blind investors, private-equity asset stripping and buyouts, and among other things, the collapse of commodity prices that resulted from overproduction

4--World's Biggest Wealth Fund Speaks Out on Liquidity Banks Miss

5--Market Turmoil Threatens Fed Credibility

6--Drug kingpin El Chapo drives demand for fashionable shirts, CNBC

7--Washington Caught Supporting Jihadists in Syria, sputnik

Vladimir Putin's September address to the UN General Assembly: the Russian President stressed that it was irresponsible "to manipulate extremist groups and use them to achieve your political goals, hoping that later you'll find a way to get rid of them or somehow eliminate them."

"Putin did not mention clear evidence he was certainly aware of from the US Defense Intelligence Agency. An August 2012 DIA document declassified by a judge says that Washington, Ankara and the Gulf States were helping to establish a Salafist principality in eastern Syria to pressure Assad and that it could team up with extremists on the Iraqi side of the border to form an Islamic State — the document uses that exact phrase," the foreign affairs correspondent underscores.

He also refers to former DIA chief Gen. Michael Flynn who noted in an interview with Al Jazeera, that it was a "willful decision" of the Obama administration to team up with Salafists, al-Qaeda and the Muslim Brotherhood in Syria back in 2012

8--The Murky Isis-Turkey business relationship

Another main sources of revenue for these Islamic State militants is the smuggling of heroin and other drugs from Afghanistan to Turkey via the land they occupy in Syria and Iraq. According to the Russian Federal Drug Control Services (FSKN), these militants earns around 1 billion USD per year by facilitating the trafficking of these drugs via the land they occupy in Syria and Iraq. Viktor Ivanov, head of FSKN says that around 50 percent of Europe’s heroin comes from IS occupied territories. Majority of militants of the Islamic State are so scared that they take lots of drugs themselves before going into battle. A few days ago, Serbian police busted a racket with 16 kilogram of heroin which was shipped from Turkey to European countries. A recent report released in 2015 by the US State Department says that Turkey is the major center of trade for heroin and other drugs.

So this is how these Islamic State militants are funding their terrorists activities in Syria and Iraq. If Western countries seriously wants to destroy these militants, then they should stop their allies like Turkey, Saudi Arabia and Qatar from funding these terrorists

Tuesday, January 26, 2016

Today's Links

1--What’s Really Going on with Oil? F. William Engdahl

2--Already in recession?…Mosler

Recession Warnings May Not Come to Pass

Jan 24 (WSJ) — Every U.S. recession since World War II has been foretold by sharp declines in industrial production, corporate profits and the stock market. Industrial production has declined in 10 of the past 12 months, and is now off nearly 2% from its peak in December 2014. Corporate profits peaked around the summer of 2014 and were off by nearly 5% as of the third quarter of last year. The Dow Jones Industrial Average is down 7.6% so far this year. A Goldman Sachs analysis found that profit margins among the companies in the S&P 500 stock index—if energy companies are excluded—have been little changed over the past year...

3--Could Low Oil Prices Cause A Global Recession?, James Hamilton

4--So Yes, the Oil Crash Looks a Lot Like Subprime, Bloomberg

The point here is not that oil is necessarily the new subprime crisis per se but that the recent action in the price of crude resembles nothing if not the bursting of a bubble and the sudden realization that the asset has been overvalued for too long. More worrying for oil investors will be BofAML's idea of forced selling. As Flanagan notes: "The systemic margin call of 2008 seems to be back for now, albeit to a far lesser degree."....

Given that both housing and oil prices were fueled to spectacular heights in the two periods by massive credit expansion, it’s probably more than just coincidence that the respective “bubble” bursting patterns are so similar.

Consider how things tend to work. Denial on what constitutes fair value is a big component of bubbles, on the part of both market participants and policymakers. When perceived “bubbles” burst, markets take their time in steadily shredding views of the perception of fundamental value, as prices move lower and lower. Along the way, many will cite “technical factors” as the cause of the decline, which in some way suggests the price decline may not be real when in fact it is all too real. In the end, the technicals drive the fundamentals, as credit flees and borrowers go bust, and a feedback loop lower kicks in. Lower prices beget accelerated selling, as asset owners need to raise cash. It could be margin calls or it could be producer selling needs, it doesn’t really matter: the selling becomes inevitable and turns into forced selling.

5--Deutsche Bank Declares War On Mario Draghi, Warns Him Any Further QE Will Push Stocks Lower

6--3% Downpayment FHA Loans Surge As Subprime Buyers Are Back In The Housing Market

First-time homebuyers are finally jumping into the U.S. property market.
Need proof? Look at the mortgage market’s fastest-growing segment: loans with low down payments insured by the Federal Housing Administration.

Originations of FHA-backed mortgages, used predominately by first-time buyers, were up 54 percent in September from a year earlier, according to the most recent data from CoreLogic Inc. By December, the FHA insured 22 percent of all loan originations, up from 17 percent a year earlier, according to data compiled by Ellie Mae Inc.
Yes you read that right. Up 54%. 

President Barack Obama’s administration, in January 2015, reduced mortgage-insurance premiums for FHA loans. That lowered the cost of getting a home loan and brought in at least 75,000 new borrowers with credit scores of less than 680, according to a November report from the U.S. Department of Housing and Urban Development.

The rate of FHA lending, which had been in decline through most of 2014, tripled the month after the insurance premium was cut, according to CoreLogic.

7--Former BIS Chief Economist Warns of Massive Debt Defaults, Need for Debt Jubilee; Fingers Europe as First in Line

8--IRA terrorist behind 1993 Belfast bombing was ‘MI5 informant’ – leaked documents

9--Belgian security was aware of Paris attackers’ terror cell since 2012 - report

10--‘Horrific experiment’: MI Gov. Snyder slammed for power grabs from minority communities, cronyism

11--Visas for Al-Qaeda: CIA Handouts That Rocked the World

This revelation by NYT adds additional weight to the allegations made in a book by Mike Springmann, former head of the US visa section in Jeddah, Saudi Arabia, from1987-1989. In Visas for al-Qaeda: CIA Handouts that Rocked the World, Springmann details how, “during the 1980s, the CIA recruited and trained Muslim operatives to fight the Soviet invasion of Afghanistan. Later, the CIA would move those operatives from Afghanistan to the Balkans, and then to Iraq, Libya, and Syria, traveling on illegal US visas. These US-backed and trained fighters would morph into an organization that is synonymous with jihadist terrorism: al-Qaeda.”

“I Know. I Was There. I Issued The Visas”...

“As I later learned to my dismay, the visa applicants were recruits for the war in Afghanistan against the Soviet Union’s armed forces. Further, as time went by, the fighters, trained in the United States, went on to other battlefields: Yugoslavia, Iraq, Libya, and Syria.”...

Likewise, Springmann says, it was a CIA “consular officer” at Khartoum in Sudan who issued a tourist visa to Sheikh Omar Abdel Rahman, later linked to the World Trade Center bombing in 1993. The “blind” Sheikh had been on a State Department terrorist watch list when he was issued the visa, entering the United States by way of Saudi Arabia, Pakistan, and Sudan in 1990....

In a chance meeting, Joe Trento, a journalist at the Public Education Center in Washington, DC, put into perspective for Sprigmann what had been really going on with the CIA in Jeddah.

“It wasn’t a garden variety visa fraud as I had once thought, but something much more serious: it was a ‘visas for terrorists program,’ set up to recruit and train (in the United States) murderers, war criminals, and human rights violators for combat in Afghanistan against the Soviet Union. These men became the founding members of al-Qaeda, the Arab-Afghan Legion.”...

“These were the people who arranged for recruiting and training what were then the mujahedeen, who later became al-Qaeda, who then transformed themselves into ISIS. I saw, but didn’t recognize, their start at Jeddah. We’ve all seen their later development and what happens when the intelligence services control foreign policy and diplomacy: the people they assembled aided the breakup of Yugoslavia, the destruction of Iraq, the collapse of Libya, and the savaging of Syria.”

12--Bond Yield Curve Holds Predictive Powers
13--Roach nails it, Stockman
14--What Recovery? Koo

15--30-year mortgage rates continue to fall

What’s up with mortgage rates? Jeff Lazerson of Mortgage Grader in Laguna Niguel gives us his take.

From Freddie Mac’s weekly survey: The 30-year fixed rate dropped 11 basis points, landing at 3.81 percent from last week’s 3.92 percent. The 15-year fixed landed at 3.10 percent, 9 basis points lower than last week’s 3.19 percent.
BOTTOM LINE: Assuming a borrower gets the average 30-year fixed rate on a conforming $417,000 loan, last year’s rate of 3.63 percent and payment of $1,903 was $42 less than this week’s payment of $1,945.

16--How Michigan Governor Rick Snyder knowingly poisoned and killed civilians with lead

DR. MONA HANNA-ATTISHA: Yeah. So, in late August, we were hearing reports from the Virginia Tech group that there was lead in the water. And when pediatricians hear about lead anywhere, we freak out. We know lead. Lead, as you said, is a known potent, irreversible neurotoxin. So we wanted to see if that lead in the water was getting into the bodies of children. So that’s when we started doing our research.

And what we found was alarming, but not surprising, based on what we knew about the water. The percentage of children with elevated lead levels tripled in the whole city, and in some neighborhoods—actually, it doubled in the whole city, and in some neighborhoods, it tripled. And it directly correlated with where the water lead levels were the highest. So we shared these results at a press conference, and you don’t usually share research at press conferences. It’s supposed to be shared in published medical journals, which now it is. But we had an ethical, moral, professional responsibility to alert our community about this crisis, this emergency....

17-- Rebel Defences Crumbling In Latakia Province, Patrick BAHZAD

The Fall of Salma

Things had started to move early last week, when the SAA, NDF and local militias moved into Salma, the rebel stronghold that was key to defensive positions South of the M4 highway linking Latakia to Idlib. After weeks of preparations and softening up defences, R+6 finally moved in and there was not much the various rebel groups could have done at that point to stop or reverse this trend. ...

... Once the strategic breaking point is reached though, the side having gained the upper hand usually pushes through, which results in the opponent's posture crumbling under the pressure. This is what happened with Salma, a former mountain resort North-East of Latakia... When R+6 went for their final assault, Salma had already become untenable. Its loss meant that the whole defensive line South of the M4 highway was compromised and both SAA advances and "tactical" retreat by the rebels made for a very quick correction of the frontline in the area.

Focus on Rabiah

As a consequence, R+6 were able to reach and cross the M4 at Sheekhaneh, taking over Mount Baradun as well as the Baradun dam. Almost simultaneously, operations started towards Rabiah, the main rebel stronghold in the Jabal Turkmen and HQ to the FSA's "First Coastal Division". The inroads made by the SAA, with CAS from the RuAF, again proved decisive against a rebel frontline that had already been destabilized by the loss of Salma and the prospect of being cut off from their LOCs with Jisr al-Shughur.

Monday, January 25, 2016

Today's links

1--This is Why Junk Bonds Will Sink Stocks: Moody’s, Wolf St

2--Rumble in the ruble, fire in the markets, RT

3--Jim Bianco: "The Markets Are Telling Us There's A Severe Issue Out There, ZH

4--The Contempt That Poisoned Flint’s Water, New Yorker

5--St. Louis Fed official: No evidence QE boosted economy

6--NYSE Margin Debt Rose Fractionally in November

7--Going Rogue: America's Unconventional Warfare in the Mideast

8--Global slowdown to deepen attacks on jobs, WSWS

9--The Only Mystery Is Why Everyone Persists In Talking About A Recovery", ZH

10--US to occupy NE Syria

As SouthFront: Analysis & Intelligence predicted month ago the NATO allies are urgently trying to implement a new plan to hold control at least of the northern oil corridor from Iraq and try to take advantage of this opportunity to involve Russia in a long expensive war. This plan includes an occupation of the crucial infrastructure including oilfields by the NATO contingent and establishing of anti-government, meaning anti-Russian and anti-Iranian, forces in parts of divided Syria.

Implementing of this plan could easily lead to a global war launched by military escalation over the Syrian crisis. The stakes of the global geopolitical standoff have been raised again.

11-- The Secret Behind the Next Global Crash, sputnik

12--On eve of Syria “peace talks,” Washington threatens escalation across region, WSWS

13--Can US Break with Jihadist Allies?

Sunday, January 24, 2016

Today's Links

1--What US credit signal says about economy, FT

2--Saudi Arabia's Secret Holdings of U.S. Debt Are Suddenly a Big Deal

“You need dollars if you’re an oil producer, you want to make sure you have dollars on your balance sheet,” said Sebastien Galy, Deutsche Bank’s director of foreign-exchange strategy, who suggests SAMA could be raising cash by liquidating riskier investments such as stocks, real estate and private equity. Holding dollars also makes sense as a hedge against the plummeting price of oil, which is priced in the U.S. currency

3--Goldman Sachs Says Corporate America Has Quietly Re-levered

4--The path to victory: Syrian Army Gains Control Over Key Town in Latakia Near Turkish Border

5--Evidence mounts that poisoned Flint water caused deaths

6--Red flag: Oil company defaults are spiking

7--Devaluation and the ripple effect

What will happen if Saudi Arabia is forced to abandon its currency peg from the U.S. dollar? While there will be domestic and global geopolitical consequences, the economic consequences of this move will be the most pronounced. Speculators have been waiting in line for a while and may have to continue to wait until 2017, when the currency is expected to get hit hard, rapidly. Given this potential devaluation, the coming imposition of value-added tax and excise tax and the removal of subsidies on petroleum products may lead to a huge surge in domestic inflation. A huge jump in domestic inflation will have implications for domestic political stability. There may also be a flight of capital, similar to what was witnessed in China recently, which will aggravate the devaluation. The Saudi stock market (Tadawul) will crash. Circus breakers will not help.

Regionally, the Saudi devaluation would lead to immediate devaluations in the currencies of the other Gulf countries that peg its currencies to the dollar. Inflation will spread throughout the Gulf region as its countries depend on imports for most of their needs. If this happens, it will be interesting to see how low the devaluation will go. The capital flight from the Gulf will be massive. The Gulf stock markets will crash.

Saturday, January 23, 2016

Today's links

1--Nearly $8 trillion wiped off world stocks in January, U.S. recession chances rising: BAML, Reuters

2--Dow could fall 5,000 points and still not be ‘cheap’ , MW

3-- Mario Draghi denies that ECB bazooka is empty amid fears QE is turning toxic, Telegraph

'The side effects of the QE medicine are getting stronger: the curative effects are getting weaker', warns UBS chief Axel Weber

Draghi: "We have plenty of instruments. We have the determination, and the willingness of the governing council to act and deploy these instruments,” he said, speaking at the World Economic Forum.

4--Felix Zulauf: The bull market is over. No more QE?

Zulauf: In the past, investors could count on the Fed to bail them out – the Greenspan and Bernanke Put, if you will. Now, however, the US central bank – and it’s still the world’s most important central bank – is keen on raising interest rates. It wants to normalize monetary policy and to end quantitative easing. As a consequence, a sudden about-turn in the Fed’s policy is unlikely.

5-- The Recovery was built on Bubbles, Guardian (Today's "must read")

The truth is that there has never been a real recovery from the 2008 crisis in North America and western Europe. According to the IMF, at the end of 2015, inflation-adjusted income per head (in national currency) was lower than the pre-crisis peak in 11 out of 20 of those countries. In five (Austria, Iceland, Ireland, Switzerland and the UK), it was only just higher – by between 0.05% (Austria) and 0.3% (Ireland). Only in four countries – Germany, Canada, the US and Sweden – was per-capita income materially higher than the pre-crisis peak.

Even in Germany, the best performing of those four countries, per capita income growth rate was just 0.8% a year between its last peak (2008) and 2015. The US growth rate, at 0.4% per year, was half that. Compare that with the 1% annual growth rate that Japan notched up during its so-called “lost two decades” between 1990 and 2010.

To make things worse, much of the recovery has been driven by asset market bubbles, blown up by the injection of cash into the financial market through quantitative easing. These asset bubbles have been most dramatic in the US and UK. They were already at an unprecedented level in 2013 and 2014, but scaled new heights in 2015. The US stock market reached the highest ever level in May 2015 and, after the dip over the summer, more or less came back to that level in December...

the main causes of the current economic turmoil lie firmly in the rich nations – especially in the finance-driven US and UK. Having refused to fundamentally restructure their economies after 2008, the only way they could generate any sort of recovery was with another set of asset bubbles. Their governments and financial sectors talked up anaemic recovery as an impressive comeback, propagating the myth that huge bubbles are a measure of economic health.

Whether or not the recent market turmoil leads to a protracted slide or a violent crash, it is proof that we have wasted the past seven years propping up a bankrupt economic model.

6--Moody's Just Put Over Half A Trillion Dollars In Energy Debt On Downgrade Review

7--Oil services giant Schlumberger axes 10,000 jobs after $1bn loss

8--Bank Loans

9--Black Knight's First Look at December Mortgage Data

10--Roubini: video, global economy: NO RETURN TO 2008

11---"As goes oil..."

The correlation between the price of oil and the price of stocks has intensified this year, to a whopping 96 percent.

"These are more tied than I've ever seen them in the 25 years I've been trading oil," said Anthony Grisanti, president of GRZ Energy.

12--We're All Paying for the Unaccountability of So-Called Experts Who Screwed Up the World Economy , Mark Weisbrot

13--What the American Dream means today ---Percent of Americans who say these are important to achieving the American Dream

Living comfortably


Achieving financial security


Being debt free


Providing a comfortable quality of life for your family


A healthy marriage


Owning a nice home


Having affordable healthcare


Pursuing happiness


Being free to pursue your personal or professional passions


Getting ahead through hard work


A healthy balance between my professional and personal lives


Helping others

Friday, January 22, 2016

Today's links

1--A Scared World Is Taking Its Money and Running Back Home—and to the U.S.

A tide of money went out to emerging markets for more than a decade, pushed by accommodative monetary policy in the U.S. and pulled by the promise of robust growth.

Now that tide is coming back in as investors seek to repatriate funds or flock to U.S.-dollar denominated assets as a safe haven amid sluggish economic growth and global market turmoil.

2--Blackstone CEO Surprised American Voters Are Unhappy With Economy, Politics, Life, Forbes

America is the richest and most unequal nation in the world — at least when you look at the wealth in 55 of the more conventionally developed countries. Median income has largely fallen behind economic growth as corporations continue to retain a bigger share of the benefits, turning into a reverse of what is usually claimed as the danger of income redistribution.


But whether there are long term changes coming or not of their own accord is immaterial in this case. People in the U.S. don’t tend to think that way. What many perceive now is a basic economic unfairness. They work hard, play by the rules as they’ve learned them, and keep getting further behind. The debt funding for college and large purchases seems to be never ending for large portions of the populace, which cements in a sense of unending inequality.

 3--In Emerging Markets, Capital Controls Are Ratcheted Up to Stem Outflow of Funds

4--Remember this??  Obama, 2003 (with video)

I happen to be a proponent of a single payer universal health care program. [applause I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its Gross National Product on health care cannot provide basic health insurance to everybody. And that’s what Jim is talking about when he says everybody in, nobody out. A single payer health care plan, a universal health care plan. And that’s what I’d like to see. But as all of you know, we may not get there immediately. Because first we have to take back the White House, we have to take back the Senate, and we have to take back the House.”

Obama, 2007

This is a two trillion dollar part of our economy and it is my belief that it’s not just politically but economically it is better for us to start getting a system in place–a universal healthcare system signed into law by the end of my first term as president and build off that system to further to make it more rational….

By the way, Canada did not start immediately with a single payer system. They had a similar transition step.

5--Obama Helped Avert Economic Collapse, but Full Recovery Is Distant, Dean Baker, NYT

It was Obama's decision to “pivot to deficit reduction” immediately after the stimulus passed and to appoint two deficit hawks, Alan Simpson and Erskine Bowles to head his deficit commission. And, it was his decision to both keep the major banks alive with low interest loans and to block efforts to use Dodd-Frank to break them up.

6--The Fed's role in stock buybacks: The putrid smell of corruption and greed.

It’s tough out there, in the oil and gas sector. The company reported that revenues in the fourth quarter plunged 39% year-over-year, income from continuing operations plunged 58%, earnings per share plunged 57%. This includes North America, where revenue plunged 55% and operating income plunged 84%. If I use “plunge” a lot, it’s because it was that kind of earnings report.

After it was all said and done, the company had a net loss for the quarter of $1.01 billion.

To make those bitter results go down better, and to add that special little extra that Wall Street analysts like to hear, it offered a good swig of financial engineering: a new share repurchase program of $10 billion.

That’s on top of the repurchase program of $10 billion that was started in Q3 2013, and which “is about to be completed.” It was that buyback program that helped propel SLB from just over $90 a share in late 2013 to $120 in mid-2014, before it all came unglued. Shares have now lost nearly half their value since then, closing today at $61.45.....

And it offered another special little extra that Wall Street analysts fawn over: it’s going to ax and additional 10,000 people.

That’s on top of the 20,000 job cuts it had announced last year. This brings total layoff announcements to 30,000. For 2015, its “workforce reduction” expenses amounted to $920 million. Cutting expenses this way can get expensive....

But those share repurchases are coming under fire. They’re an outgrowth of QE. Easy credit didn’t lead to corporate investment and economic growth, but to share buybacks, according to Natixis, one of the largest asset managers in the world. Since they’ve caused companies to load up their balance sheet with debt, they’re now increasing financial instability. And they’re among the top reasons QE is a net-negative for the economy

7--The Fed's zero rate like a pervert "handing out candy on the playground.", Bill Bonner

There’s a reality, as well as a myth. Reality is that resources are limited. Prices tell us what we’ve got to work with. Falsify prices and you get errors of omission and commission. After a while, the system suffers from things it shouldna, oughtna done.

As Hjalmar Schacht, Germany’s minister of economics in the 1930s, put it: “I don’t want a low rate. I don’t want a high rate. I want a true rate.”

An honest interest rate tells the truth about how much savings are available and at what price. People still make mistakes; they still get up to some pretty weird stuff. But at least the perverts aren’t handing out candy on the playground.

8--The Fed Rate Hike and the 2016 Economy , Dean Baker

In assessing the prospects for growth the first place to look is always consumption, which accounts for 70 percent of GDP. Consumption grew by slightly more than 3.0 percent over the last year. This was fueled in part by healthy job growth and in part by the plunge in energy prices that freed up more than $100 billion (0.6% of GDP) for spending in other areas.

It is difficult to see how this pace of consumption growth can be sustained in 2016. Job growth was likely to slow even without the Fed raising rates. This could be offset by more rapid growth in wages, but there is not much reason to expect much of a pickup here.


In sum, the cumulative picture makes it look like 2016 will be weaker than 2015. We may well see a growth rate under 2.0 percent and it is easy to envision scenarios, for example a collapse in office construction, in which growth will be closer to 1.0 percent.

This is not a question of guessing scores in a football game. Weaker GDP growth will translate into fewer jobs. That means both the suffering of the unemployed and less bargaining power for workers who have jobs, and therefore smaller wage gains. In short, the Fed should be much more concerned about the economy’s continuing weakness rather than the prospect its strength will lead to spiraling inflation. Last week’s rate hike should be the last one for a long time

9-- The lies never stop: Iran was moving towards producing nukes, Kerry claims


10--US media admits Russia winning in Syria, MoA

Being confronted with reality the U.S. media is now changing its false narrative. The LA Times writes:

The Latakia attack mirrors similar government gains across the country, as forces loyal to President Bashar Assad, backed by Russian air power, have been on the offensive.
It's a dramatic shift for the forces of Assad, who less than six months ago had warned supporters that the government would have to "give up areas" after a string of humiliating setbacks.
The gains have strengthened the government's position in the run-up to Syrian peace negotiations scheduled to begin next week in Geneva..... 

A source in the office of the Prime Minister Haidar al-Abadi said, “The United States delay of its support to Baghdad was not a coincidence or an unintentional lazy reaction. It was a strategic decision to: Teach Iraq a lesson for rejecting U.S military bases; To observe the Iranian military capability and inability of Tehran to use air power and intelligence gathering to defeat ISIS; To submit Baghdad to its will and dictate its conditions”.

That the U.S. used the ISIS phenomenon to again achieve regime change and U.S. control in Iraq was confirmed by Obama in an interview with Thomas Friedman:

The reason, the president added, “that we did not just start taking a bunch of airstrikes all across Iraq as soon as ISIL came in was because that would have taken the pressure off of [Prime Minister Nuri Kamal] al-Maliki. ...

11--Boots or no boots on the ground: Which is it?

We're looking for opportunities to do more, and there will be boots on the ground — I want to be clear about that — but it's a strategic question, whether you are enabling local forces to take and hold, rather than trying to substitute for them," Carter said...

Last October, US President Barack Obama reaffirmed that the United States would not send ground troops to Syria to join operations against the Daesh. The same month, US Defense Secretary Ashton Carter said that the Pentagon had not ruled out conducting ground attacks against Daesh.

12--Turkish invasion threat escalates Syrian conflict

The Syrian government has formally appealed to the United Nations over incursions into its territory by Turkish troops. The protest at the UN came amid reports that Turkish soldiers have crossed the border and entered the Syrian town of Jarablus on the western bank of the Euphrates River.

Turkish military action inside Syria threatens to escalate the internal conflict in that country and increase the threat of a confrontation between Turkey and Russia

Any move to secure the border will inevitably be accompanied by a Turkish intervention to halt a Kurdish advance, either through direct Turkish military occupation or through control over the area by other Al Qaeda-linked militias such as the al-Nusra Front, Ahrar al-Sham or Jaish al-Islam, all of which have enjoyed Turkish support.

The mounting conflicts threaten to upend talks scheduled in Geneva next Monday for the ostensible purpose of achieving a negotiated end to the nearly five-year-old civil war that has claimed the lives of roughly a quarter of a million Syrians and turned millions more into refugees

13--The Flint water crisis and the criminality of American capitalism

The poisoning of Flint is linked to the 2013-14 Detroit bankruptcy, which was carried out with the backing of the Obama administration. The pensions and health benefits of city workers were slashed and public assets were sold off or privatized, including the treasures of the Detroit Institute of Arts and the city’s century-old public water system. This led to sharp increases in water prices in Detroit, Flint and other cities, and mass water shutoffs of working-class customers.

The modus operandi of the conspiracy of politicians and corporate holders of city bonds to plunder the incomes of city workers and seize public assets in Detroit has become a model for similar attacks across Michigan, in other US states and now in Puerto Rico. Municipalities and school districts have been starved of resources by federal, state and local authorities, forced to take on immense levels of debt, and then put under financial dictators who do the bidding of the banks.

.....During the 2009 restructuring of GM, the Obama administration worked with the UAW to shut more plants and halve the wages of all new-hires, while granting legal immunity to GM in any future lawsuits over pollution or defective vehicles. The company has taken in billions in profits and spent them, not on the people of Flint, but on stock buybacks and dividend payments to its biggest shareholders, which includes the UAW....

As for Flint, the president who has allocated trillions to bail out the Wall Street criminals and fund illegal wars has approved a derisory $5 million in federal aid for the city’s people. The government of “the most powerful country in the world” is no less indifferent to working people in Flint than its predecessor was to Hurricane Katrina-ravaged New Orleans

Thursday, January 21, 2016

Today's Links

 1--When Russia's money runs out, the 'real trouble starts', CNBC

Speaking to CNBC in Davos where global business and political leaders are attending the World Economic Forum (WEF), Browder said the central bank of Russia was "running out of money."

"Let's say that they have $200 billion (in reserve) and they're burning through all sorts of money right now because of the oil prices and sanctions. They just don't have the money to support the ruble and so Russians are just suffering," he said, adding.

"Eventually they're going to run out of that money and when they do, that's when the real trouble begins," he added.

His comments come as the ruble continued its slide against the dollar. On Thursday it hit 85 rubles per dollar.

2--Ruble Plunges 26% in 90 days, Hits New Low, Government Says to Heck with it

Where’s the shock and awe?

The ruble plunged 3.8% on Wednesday and another 2.8 on Thursday to a new all-time low of 83.85 to the dollar, at 5:30 PM Moscow time, blowing through the previous catastrophic panic low of December 2014. At the time, the Ministry of Finance and the Central Bank deployed desperate, and ultimately very costly shock-and-awe measures to stop the ruble from spiraling out of control. And it triggered all kinds of drama....


Today, there’s no such drama. The ruble is now lower than it had ever been. It has plunged 26% against the dollar in just three months. It’s also down 25% against the euro, 27% against the yen, and 23% against the yuan. This is an all-out ruble crash, not a “strong dollar” problem.

And it’s down 63% against the dollar since early 2013. Back then, it took 29 rubles to buy a dollar. It took 62 rubles three months ago. It takes nearly 84 rubles now:

But there were no big announcements and no shock-and-awe moments.

3---Looking for signs of stocks' final washout as fear, panic spike

First came the Dow's 565-point whoosh to the downside Wednesday. Then came the rebound rally that trimmed the Dow's losses for the day to 249 points and which Wall Street hopes was the final washout -- or so-called investor "capitulation" -- that often signals the end of stock market pain.

Indeed, the relentless selling on Wall Street early in the new year had panicky investors running Wednesday.

4--Rick Sentelli: "A rolling margin call"

"We basically have a global rolling margin call that's been going on since the 3rd Quarter of last year. It's gotten a bit more intense since the Fed announced it was normalizing" because, in essence, a quarter point (rate hike) doesn't mean anything, but the mentality that we are about to turn the corner on the "Grand Experiment" means a lot, ("especially in a time when" inflation, absent energy, appears to be on the rise) (Closing Bell Exchange, CNBC)

5--New low oil prices and how they're set, focus on fracking

6--Default risk in energy debt seen as higher than Great Recession

Schwab Center for Financial Research

Energy spreads have widened past their Great-Recession peak.


Widening credit spreads imply that “the market is clearly expecting the default rate to pick up, as the balance sheets of some of the riskier energy companies won't be able to sustain this drop in oil prices US:CLG6 ” said Collin Martin, director of fixed-income strategy for the Schwab Center for Financial Research

7--Commodities meltdown triggers capital flight

Global investors and companies pulled $735 billion out of emerging markets in 2015, the worst capital flight in at least 15 years, the Institute of International Finance said.

The amount was almost seven times bigger than what was recorded in 2014, the Washington-based think tank said in a report on Wednesday. China was the biggest loser, with $676 billion leaving its markets. The IIF predicted investors may withdraw $348 billion from developing countries this year.

Emerging-market stocks are trading at the lowest levels since May 2009 and a gauge of 20 currencies has slumped to a record. A meltdown in commodity prices and concern over the slowdown in China’s growth to the weakest since 1990 are spurring investors to dump assets from China to Russia and Brazil. The 31 biggest developing markets have lost a combined $2 trillion in equity values since the start of 2016.

8--Oil Bust Could End Dollar Domination, oil price

 There is an overriding belief that the U.S. dollar can hold onto its status as the world’s king reserve currency simply because of petro dollars. But in recent years, a serious threat to this system has developed—and the risk of the dollar being dethroned is very real. The U.S. dollar has reigned supreme since the end of WWII, when the Bretton Woods system gave it is initial power. With Bretton Woods’collapse in 1971, oil became its new saviour and kingmaker as the U.S. dollar became the prime currency for crude oil transactions. In 1973, the U.S. made a pact with the Saudi King to conduct all crude oil trades in U.S. dollars—in return for U.S. protection of its oil fields. Because of world hunger for crude, the demand for U.S. dollars experienced a similar, sustained hunger.

9--Oil's Sum of All Fears

Be very afraid

10--Michael Klare: Plunging Oil Prices – A Recipe for More War?

11--Russia Breaking Wall St Oil Price Monopoly

Russia has just taken significant steps that will break the present Wall Street oil price monopoly, at least for a huge part of the world oil market. The move is part of a longer-term strategy of decoupling Russia’s economy and especially its very significant export of oil, from the US dollar, today the Achilles Heel of the Russian economy. Later in November the Russian Energy Ministry has announced that it will begin test-trading of a new Russian oil benchmark. While this might sound like small beer to many, it’s huge. If successful, and there is no reason why it won’t be, the Russian crude oil benchmark futures contract traded on Russian exchanges, will price oil in rubles and no longer in US dollars. It is part of a de-dollarization move that Russia, China and a growing number of other countries have quietly begun. The setting of an oil benchmark price is at the heart of the method used by major Wall Street banks to control world oil prices. Oil is the world’s largest commodity in dollar terms. Today, the price of Russian crude oil is referenced to what is called the Brent price. The problem is that the Brent field, along with other major North Sea oil fields is in major decline, meaning that Wall Street can use a vanishing benchmark to leverage control over vastly larger oil volumes. The other problem is that the Brent contract is controlled essentially by Wall Street and the derivatives manipulations of banks like Goldman Sachs, Morgan Stanley, JP MorganChase and Citibank.

12--Weak Demand?  Gasoline Demand Has Plummeted; Signs Of Severe Recession In Store?

13--Stakes are high as US plays the oil card against Iran and Russia, Guardian

John Kerry, the US Secretary of State, allegedly struck a deal with King Abdullah in September under which the Saudis would sell crude at below the prevailing market price. That would help explain why the price has been falling at a time when, given the turmoil in Iraq and Syria caused by Islamic State, it would normally have been rising.”

14--F. William Engdahl titled “The Secret Stupid Saudi-US Deal on Syria”

“The details are emerging of a new secret and quite stupid Saudi-US deal on Syria and the so-called IS. It involves oil and gas control of the entire region and the weakening of Russia and Iran by Saudi Arabian flooding the world market with cheap oil. Details were concluded in the September meeting by US Secretary of State John Kerry and the Saudi King…

..the kingdom of Saudi Arabia, has been flooding the market with deep discounted oil, triggering a price war within OPEC… The Saudis are targeting sales to Asia for the discounts and in particular, its major Asian customer, China where it is reportedly offering its crude for a mere $50 to $60 a barrel rather than the earlier price of around $100. That Saudi financial discounting operation in turn is by all appearance being coordinated with a US Treasury financial warfare operation, via its Office of Terrorism and Financial Intelligence, in cooperation with a handful of inside players on Wall Street who control oil derivatives trading. The result is a market panic that is gaining momentum daily. China is quite happy to buy the cheap oil, but her close allies, Russia and Iran, are being hit severely…

According to Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center, the dramatic price collapse is being deliberately caused by the Saudis, OPEC’s largest producer. The public reason claimed is to gain new markets in a global market of weakening oil demand. The real reason, according to Abanmy, is to put pressure on Iran on her nuclear program, and on Russia to end her support for Bashar al-Assad in Syria….More than 50% of Russian state revenue comes from its export sales of oil and gas. The US-Saudi oil price manipulation is aimed at destabilizing several strong opponents of US globalist policies. Targets include Iran and Syria, both allies of Russia in opposing a US sole Superpower. The principal target, however, is Putin’s Russia, the single greatest threat today to that Superpower hegemony.

15--No Panic as Russians Absorb Ruble Crash