Wednesday, September 18, 2019

Today's links

"Over the past forty years, the promotion of racial divisions has become a central component of pseudo-left politics, a reactionary attack on socialism rooted in the interests of privileged sections of the upper middle class. The racialist historical narrative serves contemporary political purposes—to divide the workers against each other, to block and divert the development of class consciousness. In an earlier essay published by Hannah-Jones, in July 2016, the Times columnist, in responding to incidents of police violence, wrote of “the vast gulf between the collective lived experiences of white Americans and that of black Americans,” which “can make true empathy seem impossible.”

Where does one see this “vast gulf” among the striking GM workers? Whether black or white, they have the same experience of declining wages, attacks on jobs, the destruction of health care. And this is true not just of auto workers in the United States, but of workers in all sectors and throughout the world...

 The past year has seen strikes of teachers from West Virginia and Kentucky to Oklahoma and Arizona—states condemned as bastions of racism by the Democratic Party and the pseudo-left".  WSWS,   The strike at General Motors: Class struggle vs. the reactionary politics of racial division

 

 

 

1--Putin says ''Globalism Has Hurt the US Middle Class'


"Russia has been accused, and, strange as it may seem, it is still being accused, despite the Mueller report [on the investigation into allegations of Russian meddling in the 2016 presidential campaign], of mythical interference in the US election. What happened in reality? Mr Trump looked into his opponents’ attitude to him and saw changes in American society, and he took advantage of this.

You and I are talking ahead of the G20 meeting. It is an economic forum, and it will undoubtedly have discussions on globalisation, global trade and international finance.
The middle class in the US has not benefited from globalisation . . . The Trump team sensed this very keenly and clearly and they used this in the election campaign.  Has anyone ever given a thought to who actually benefited and what benefits were gained from globalisation, the development of which we have been observing and participating in over the past 25 years, since the 1990s?

China has made use of globalisation, in particular, to pull millions of Chinese out of poverty.

What happened in the US, and how did it happen? In the US, the leading US companies — the companies, their managers, shareholders and partners — made use of these benefits. The middle class hardly benefited from globalisation. The take-home pay in the US (we are likely to talk later about real incomes in Russia, which need special attention from the government). The middle class in the US has not benefited from globalisation; it was left out when this pie was divided up.

The Trump team sensed this very keenly and clearly, and they used this in the election campaign. It is where you should look for reasons behind Trump’s victory, rather than in any alleged foreign interference. This is what we should be talking about here, including when it comes to the global economy." (my bolds)

2--Strategic competitor?  U.S. And Russia Battle It Out Over This Huge Iraqi Gas Field


Securing oil and gas contracts across all of Iraq will allow Russia to establish an unassailable political sway across the entire Shia crescent of power in the Middle East, stretching from Syria through Lebanon (by dint of Iran), Jordan, Iraq (also helped by Iran), Iran itself, and Yemen (via Iran). From this base, it can effectively challenge the U.S.’s vital oil, gas, and political ally in the region – Saudi Arabia. China, in the meantime, is operating to its own agenda in South Pars Phase 11 and its West Karoun holdings.
Iraq, like Turkey, is still – nominally at least – not committing to either the Russia or the U.S., preferring to play each off against the other for whatever they can get, and the same applies in microcosm to the field of Mansuriya..

Gazprom Neft often acts as the point man for Gazprom in initial conversations, as it is a slick, well-run, Western-style company, whereas Gazprom is a bit more old-style Soviet,” said the Iraq source. “It [Gazprom Neft] also made it clear that it would be interested in other sites, such as Siba,” he added. “It should be remembered that Gazprom was in the prime position to develop the other key gas fields of North Pars, Kish, and Farzad A and B before the U.S. withdrew from the JCPOA [Joint Comprehensive Plan of Action] last year,” he concluded

3--Russia Capitalizes On America’s Thinly Stretched Middle East Focus


A sliver of news from Iraq passed almost unnoticed by global media last week: Stroytransgaz has signed a preliminary contract with the oil ministry in Baghdad for oil and gas exploration in Anbar province. The fact that it was barely reported is entirely unsurprising as Stroytransgaz is an almost unknown Russian oil and gas company - except by the U.S. whose Office of Foreign Assets Control extensively sanctioned it in 2014 - and Anbar is almost a wasteland as far as Iraq’s oil and gas sector development goes. However, this tiny announcement is a manifestation of Russia’s key strategy – alongside China – to hijack much of the Middle East whilst U.S. attention is still diverted on Iran.

“Along the spine running from east to west are the historical ultra-nationalist and ultra-anti-West cities of Falluja, Ramadi, Hit and Haditha, and then we’re into Syria, and a short hop to the key strategic ports of Syria – Banias and Tartus that also happen to be extremely important to the Russians,” he added. “So, what you’re looking at there is the absolute clear sign that the Iran-Iraq-Syria oil and gas pipelines system is now going ahead, which it is, it was agreed last July just after the U.S. pulled out of the JCPOA [Joint Comprehensive Plan of Action],” he underlined. 

The motivation for Iran is that Iran had it reconfirmed last May that it cannot trust the U.S., given the apparent capriciousness of its political figures. “Iran didn’t truly believe that any new [U.S.] president would revoke all of the work done by a previous one on the JCPOA, no matter what the personal animosity involved, until it happened but when it did it decided it wasn’t going to take any more chances, hence the new route, which will by-pass the Strait of Hormuz, and can run straight into southern Europe, or anywhere else for that matter,” the source told OilPrice.com.

A similar motivation pertains to Iraq allowing the pipeline to go through it. Not only is this distrust a product of the two invasions by the U.S. in 1991 and 2003, and subsequent occupation, which Iraq sees simply as opportunism designed to gain control of its oil and gas resources, but it is also a reflection of the uncertainty over how the U.S. intends to handle the Kurds in northern Iraq. “It’s well known that the U.S. promised the government of [the semi-autonomous region of] Kurdistan complete independence in exchange for its Peshmerga army acting as the West’s boots on the ground in the fight against Islamic State and the government in Baghdad is terrified of that, particularly given that over 90 per cent of those Kurds voted for Kurdistan independence from Iraq in September 2017,” said the Iran source. “Iraq knows a deal is coming between Iran and the U.S., and it’s okay with that as it needs ExxonMobil to build the critical CSSP [Common Seawater Supply Project], but [Moqtada] al-Sadr, who’s actually in control [in Iraq] won’t allow the U.S. much more past that,” he added. Indeed, al-Sadr gained effective power in Iraq through his message that Iraq should not be beholden to any single country in the future, as it has in the past....

Not only has it effectively made Iran a joint client state with China, carving up its oil and gas resources, but, given Iran’s enduring hold over Iraq, it has got a two-for-one deal on an epic scale. With Rosneft having effectively taken control of Kurdistan in the north through the deal done in November 2017, it has put itself in perfect position to similarly establish control over the south by building out its oil and gas infrastructure and transport structure (exactly how Rosneft started in Kurdistan): cue Stroytransgaz.
By all accounts, Stroytransgaz is not very good at all in oil and gas development terms but it is very good indeed in terms of building oil and gas infrastructure including, notably, pipelines. In its own company description...

Crucially in this context, it was Stroytransgaz that won US$$2.7 billion of contracts in 2006/7 to build two major pipelines and a gas processing plant in Syria. One of these was to have been the Iran-Iraq-Syria pipeline, moving Iranian, and later Iraqi, gas (and later oil) from South Pars (and nearby oil fields) to Syria. This was a cornerstone to the wider build-out of several planned refineries that had received the go-ahead prior to the breakout of the civil war in Syria. It included the 100,000 bpd facility at Abu Khashab backed by the China National Petroleum Corporation, and the South Central Gas Area - built by Stroytransgaz – that had started up by the end of 2009 and had boosted Syria’s natural gas production by about 40% by 2011. At that time, with proved reserves of 8.5 trillion cubic feet of natural gas and 2.5 billion barrels of oil, Syria was producing just over 316 billion cubic feet per day of dry natural gas and nearly 600,000 bpd of oil.

The precision with which all of these plans inexorably morph into a sustainable positive feedback loop is from an intellectual standpoint a thing of rare beauty. Specifically, income from all of these ‘occupied’ countries’ oil and gas resources – because Russia’s intention is to strike deals with Iraq and Syria that are at least as good as that which it struck with Iran – will be used to finance the build-out of its own political and military belt of influence running through them and into the Mediterranean and Europe. The belt works in the other direction as well feeding into the former Soviet Union state of Turkmenistan, plus Afghanistan and Pakistan. In preparation for this move into southern Iraq, Russia already had its other pieces in position: Rosneft in Kurdistan in the north, the deal with Iran in the East, and an absolute power in Syria.

In January 2017, Russia signed a deal with Syria that allowed Russia to expand and use the naval facility at Tartus for 49 years on a free-of-charge basis and enjoy sovereign jurisdiction over the base. The deal allows Russia to keep both warships and nuclear vessels in Tartus, plus essentially anything else it wants, as the deal stipulates that at the base all personnel and material is under Russian jurisdiction not Syrian.

By happy ‘coincidence’ both Banias and Tartus are also extremely close to the massive Russian Khmeimim Air Base and the S-400 Triumf missile system. Although the base only came in to operation in 2015 supposedly to help in the fight against Islamic State, Russia appears to have changed its tactical plans for it, having also signed a 49 year lease on it, with the option for another 25 year extension. A short flight away is Russia’s Latakia intelligence-gathering listening station.


This power, in turn, is neatly concentrated in the two major ports to which Iranian oil and gas (and Iraq’s and Syria’s oil and gas) will end up: Banias and Tartus.

4--Repo Mystery?? "It seems like there's something underlying out there that we don't know about."



For the first time in over a decade, the Federal Reserve Bank of New York took steps Tuesday to relieve pressures that were pushing short-term interest rates higher than the central bank wanted Monday.
Strains developed Monday in short-term financing markets that suggested the central bank could lose control of its federal-funds rate, a benchmark that influences borrowing costs throughout the financial system. 

Bids in the fed-funds market on Tuesday morning reached as high as 5%, according to traders, well beyond the central bank's target range, which is 2% to 2.25%.
The Fed moved Tuesday morning to put $53 billion of funds back into the banking system through transactions known as repurchase agreements. After the moves, the New York Fed said the effective fed-funds rate, or the midpoint of transactions in that overnight market, stood at 2.25%, up from 2.14% on Friday. 

The pressures that had sent the fed-funds rate higher were related to shortages of funds for banks, stemming from rising government deficits and the central bank's decision to shrink its securities holdings in recent years. Its reduced holdings have soaked up funds in the financial system, crimping liquidity. 

The Fed is likely to continue to provide funding to ensure the smooth operation of the repo market for some time to come, although it isn't clear how long that might be, said Gennadiy Goldberg, a fixed-income strategist at TD Securities.
"I think they're going to be playing this one by ear," he said. "This is in every way, shape and form an emergency measure."

What happens in this narrow sector of the financial market can be important because funding spikes create the risk of sudden and disorderly efforts by market participants to reduce debts given the lack of cheap and predictable short-term financing.
"This sort of thing can lead to substantial pullbacks, and that can create very unpredictable dynamics in markets," said Mr. Crandall. 

Scott Skyrm, a repo trader at Curvature Securities LLC, said he had seen cash trade in the fed-funds rate as high as 9.25% Tuesday.
"It's just crazy that rates could go so high so easily," he said. 

On his trading screens, Mr. Skyrm said he could see traders with collateral securities that they were trying to exchange for cash. The rates they were offering would start to rise until an investor with cash available to trade would start to accept their bids, gradually driving repo rates down until investors had exhausted their cash, he said. Then rates would resume their climb. 

While there are technical factors to explain why cash would be in high demand this week, including corporate tax payments, the settlement of recently issued Treasury securities and the approach of quarter-end, they didn't seem to explain the "crazy market volatility," Mr. Skyrm said.
"It seems like there's something underlying out there that we don't know about," Mr. Skyrm said.

5--Forever Secret  --US Attorney General Barr invokes “state secrets” to cover up Saudi involvement in 9/11

By Barry Grey
17 September 2019
Last week, it was revealed that the Trump administration has taken extraordinary steps to continue the 18-year cover-up of Saudi government involvement in the September 11, 2001 terror attacks.
On Thursday, September 12, one day after the 18th anniversary of the attacks on New York and Washington that killed nearly 3,000 people, a federal court filing revealed that Attorney General William Barr has asserted the "state secrets" privilege to block the release of an FBI report detailing extensive relations between some of the 19 hijackers and Saudi government officials. Victims of the attacks and their families are pushing for access to the 2007 report as part of a lawsuit against the Saudi government launched in 2003 charging the despotic monarchy with coordinating the mass killings.

Barr declared there was a “reasonable danger” that releasing the report would “risk significant harm to national security.”

Government investigations have established that the two people who are named in the FBI summary, Fahad al-Thumairy, a former Saudi consulate official, and Omar al-Bayoumi, suspected by the FBI of being a Saudi intelligence officer, were working in coordination with the Saudi regime. The third person, whose name is redacted, is described in the FBI summary as having assigned the other two to assist the hijackers...

An FBI official said the agency was shielding the name to protect classified information related to “ongoing investigations” and to protect its “sources and methods.”...

Its intelligence agencies have long worked in the closest collaboration with the CIA and the FBI. The exposure of Saudi complicity in 9/11 immediately implicates sections of the US intelligence establishment in facilitating, it not actively aiding, the terror attacks, and sheds light on the multiple unanswered questions about how 19 men, 15 of whom were Saudi nationals, could carry out such a complex operation...

Former Democratic Senator Robert Graham, cochair of the Joint Congressional Inquiry into the 9/11 attacks, said that there was “a pervasive pattern of covering up the role of Saudi Arabia in 9/11 by all of the agencies of the federal government, which have access to information that might illuminate Saudi Arabia’s role in 9/11.

6--Purdue Pharma, accused of deliberately fueling deadly US opioid crisis, files for bankruptcy

 

7--The strike at General Motors: Class struggle vs. the reactionary politics of racial division

 

Everything that is taking place contradicts the reactionary narrative that has proclaimed the death of the working class and the end of the class struggle, supposedly replaced by conflicts centered on race, gender and sexual orientation. Not only does the working class exist, but the class struggle is, as Marx insisted, the driving force of world history....

 

Just one month ago, the New York Times published a special 100-page edition of its Sunday magazine on “The 1619 project,” which presented a race-obsessed falsification of American history. The conflict between “black people” and “white people” is at the center of American society, wrote the Times columnist Nikole Hannah-Jones, and “anti-black racism runs in the very DNA of this country.” This conception is being actively promoted through an aggressive campaign in the media and on campuses throughout the country.

As the WSWS wrote in its statement analyzing the 1619 project, entirely absent from the Times narrative is any reference to the history and development of the American working class. “There is no class struggle,” the WSWS wrote, “and, therefore, there is no real history of the African-American population and the events which shaped a population of freed slaves into a critical section of the working class.”

Entirely left out in the Times’ account is the way in which racial divisions were consciously and deliberately promoted by the ruling class to undermine class consciousness in the decades following the Civil War. Among the most prominent examples of this pernicious form of ideological warfare was the racism and anti-Semitism promoted by Ford and the other auto companies in the 1920s and 30s, which was overcome in the formation of the industrial unions, led at the time by socialist-minded workers..

The fight to unify the working class in the United States across all racial, ethnic and gender lines is a component part of the struggle to unite workers throughout the world on the basis of their common class interests. The racialist and identity politics that is the specialty of the Democratic Party is the counterpart to the anti-immigrant chauvinism promoted by the Trump administration—and facilitated by the Democrats—which is aimed at pitting workers in the United States against their class brothers and sisters in Latin America and Asia.

The strike at GM is a stage in a much broader tendency. The growth of the class struggle is an objective process that profoundly undermines all efforts to divide the working class along the lines of nation, race, ethnicity, language or gender. As the class struggle develops and takes on an openly anti-capitalist and socialist character, the nature and role of racialist identity politics, and the organizations that promote it, will be ever more clearly revealed.

8--Washington steps up threats against Iran over strikes on Saudi oil facilities


A US military confrontation with Iran is in direct conflict with the interests of China, which is dependent upon the Persian Gulf region for a large portion of its immense energy requirements. The threatened cutoff of oil exports from Saudi Arabia posed the greatest threat to China, which counts the kingdom as its second largest source of oil after Russia. Moreover, Iran, also a key source of energy for China, is a crucial link in Beijing’s One Belt, One Road initiative, with China offering some $400 billion in long term investments in Iran’s energy, transport and manufacturing sectors.
A US stranglehold over the Persian Gulf would confront China with an intolerable threat of being placed on energy rations by its principal global rival, or cut off from supplies altogether.

US aggression against Iran likewise cuts across the interests of the European imperialist powers. Anxious to secure their own access to Iran’s lucrative markets and energy resources, they are conducting what amounts to a rebellion on their knees against Washington’s drive to war...

In Israel, as in the United States and every major capitalist country, there is a powerful incentive for the ruling class to direct the tensions created by insoluble economic and political crises, social inequality and growing class conflict outward in an eruption of military violence.

9--The Fed Intervened in Overnight Lending for First Time Since the Crash. Why It Matters to You.

 

10--The Fed Intervened in Overnight Lending for First Time Since the Crash. Why It Matters to You.

 

liquidity was missing. It had dried up to the point that the major Wall Street banks could not, or would not, handle the demand for loans called overnight repurchase agreements (repos) that were coming their way. (Repos are a short-term form of borrowing where corporations, banks, brokerage firms and hedge funds secure loans by providing safe forms of collateral such as Treasury notes.)

The oversized demand for the repos and the lack of available funds drove the overnight repo rate to an unprecedented high of 10 percent at one point. Typically, the overnight repo rate trades in line with the Federal Funds rate, which is currently targeted at 2 to 2.25 percent by the Fed.

The Federal Reserve Bank of New York (always there to rescue Wall Street from its hubris; see “Related Articles” below) had to jump in and infuse $53 billion into the repo market. It has promised to make another $75 billion available this morning.

Here’s what should concern every engaged American: As of June 30 of this year, the four largest banks on Wall Street (which are allowed to own Federally insured commercial banks as well as stock, bond and derivative gambling casinos known as investment banks) held more than $5.45 trillion in deposits. The breakdown is as follows: JPMorgan Chase holds $1.6 trillion; Bank of America has $1.44 trillion; Wells Fargo has $1.35 trillion; and Citibank is home to just over $1 trillion.

A number of excuses have been offered by the business press to explain why the New York Fed had to ride to the rescue yesterday but the very simple question is this: how can four banks with $5.45 trillion in deposits not be able to cough up $53 billion in overnight loans.

The excuses go like this: corporations had to pay their corporate taxes and drew down large amounts from the banks. But corporations paying their taxes is not some new problem that just fell out of the sky. These are very old banks that should certainly know how to anticipate a drawdown for corporate taxes. The next excuse is that liquidity at the banks was drained as a result of paying for Treasury securities purchased in last week’s Treasury auction. The major Wall Street banks are all “primary dealers,” which are contractually bound to make purchases in the regular Treasury auctions. But again, this has been going on for decades and sophisticated banks should be able to figure out how to make bids in the Treasury auctions while still leaving themselves with adequate liquidity for their customers.

One of the more reasonable theories is that the backup in interest rates that caused bond prices to tank last week drove an investor stampede out of bonds, forcing the Wall Street banks to buy back large amounts of unwanted bonds from customers, thus further draining their liquidity.
Then there is the problem that these same four banks, together with Goldman Sachs and Morgan Stanley, own 90 percent of the $272.5 trillion in derivatives at U.S. bank holding companies.

Given the fact that the last time the Fed was intervening in this fashion in the overnight lending market there was a major crisis on Wall Street with century-old iconic names vying for which one would go belly up first, one would have expected to see a serious percentage decline in the share prices of these banks during stock market trading hours yesterday. That didn’t happen. The worst of the bunch was Morgan Stanley, which closed down 1.21 percent.
Unfortunately for taxpayers, who will inevitably be on the hook again if things so south on Wall Street, everything is always fine on Wall Street – until it isn’t. And when Wall Street really begins to unravel, it does it at lightning speed.

11--What’s Wrong With the Repo Market?


Every afternoon banks settle their accounts with each other and then figure out how much cash they need for routine operations the next day. The banks that need cash borrow it in the repo market from other banks at rates that are usually just a little above the Fed’s policy rate. The whole thing is very dull and predictable.
Over the past couple of years, as the Fed has been raising interest rates, repo rates have gone up too. Right now they’re hovering a little over 2 percent. But something odd happened this week:
The surge in repo rates began Monday afternoon, well after the vast majority of trading in the market for overnight loans typically takes place, investors, traders and analysts said. The origin of the demand for cash was unclear, as traders seeking cash could have been acting on their own behalf or as intermediaries for other parties, one trader said.
Unexpected bids seeking cash entered the market at a time traders said was uncomfortably close to the 3 p.m. deadline for settling trades.
Scott Skyrm, a repo trader at Curvature Securities LLC, said he had seen cash trade in the repo rate as high as 9.25% Tuesday. “It’s just crazy that rates could go so high so easily,” he said.

The pressures relate to shortages of funds banks face resulting from an increase in federal borrowing and the central bank’s decision to shrink the size of its securities holdings in recent years….Reserves over the last five years have been declining….Then on Monday, corporate tax payments were due to the Treasury, and Treasury debt auctions settled, leading to large transfers of cash from the banking system. Meanwhile, postcrisis financial regulations have made short-term money markets less nimble.

12--Just tell me what the consumer is up to, skip the rest


If you’ve spent the last ten years fussing over all of the economic reports related to heavy industry and commodity costs and other dirty data points, you probably feel like you’ve been running in circles, caught up in a wild goose chase of oscillations and obfuscations that’s brought you no closer to understanding the twists and turns of the market than had you done absolutely nothing at all. Think of all the almost-recession readings in things like ISM and C&I spending and the like that we’ve whistled right past in the post-crisis period.

Had you, on the other hand, simply focused on the health and wealth of the consumer, you’d have gotten things mostly right.

The US consumer is the preeminent economic engine of the world right now, and following things like employment, wages, 401(k) balances, retail spending, small business confidence and home-buying / remodeling trends has been a great shortcut for investors and spectators alike.

13--Why is the Federal Reserve pouring money into the financial system?

Answer lies in short-term issues and structural market changes

Monetary policy was made up on-the-go during the crisis, and we are dealing with a changed paradigm where the Fed has to work to understand and come up with new solutions to deal with it.”
 

14--Federal Reserve sees huge demand for cash after money market jolt

Crunch in short-term borrowing market sends key policy rate above central bank’s target





 




 

 
 



 

Tuesday, September 17, 2019

Today's Links

1--The Fed to the rescue!  Again!


Which financial institutions or banks were caught in the funding squeeze??

It's over: after a torrid 30 minutes in which the NY Fed first announced a repo operation, then announced the repo was canceled due to technical difficulties, then mysterious the difficulties went away just minutes later, at precisely 10:10am, the Fed concluded its first repo operation in a decade, which while not topping out at the $75 billion max, was nonetheless a significant $53.15 billion, split as follows:
  • $40.85BN with TSYs as collateral at a 2.1% stop out rate
  • $0.6BN with Agencies as collateral at a 3.0% stop out rate
  • $11.7BN with Mortgage-backed securities as collateral at a 2.1% stop out rate.
While the Fed did not disclose how many banks participated in the operation, it is safe to say it was a sizable number. Worse, the result from today's unexpected repo operation, we can now conclude that in addition to $1.3 trillion in 'excess reserves', a Fed which is now cutting rates and will cut rates by 25bps tomorrow, the US financial system somehow found itself with a liquidity shortfall of $53 billion that almost paralyzed the interbank funding market.

Which brings up an interest question: remember the discount window stigma? How many organizations will be willing to admit they were caught in a funding squeeze and needed repo access? We will find out in minutes.

2--To the people paying $4,200 to see Michelle Obama talk – do you expect her to say anything interesting

 

3--Trump says US doesn’t need Middle East oil; data, experts prove otherwise

 

he claim contradicted the US government’s own data, which showed that while the US has indeed become a large producer of oil and gas thanks to a technology-driven drilling boom that was launched over a decade ago, it still imported large amounts of crude oil and petroleum products from the Persian Gulf region in 2019.

The US Energy Information Administration (EIA) said in its latest available report that last year, the US imported about 9.93 million barrels per day of petroleum from some 86 countries, of which 78 percent was crude oil.

Interestingly, Saudi Arabia was the second largest oil provider for the US, selling it around 900,000 bpd. Iraq was ranked fifth on the list with a little more than half a million bpd. Canada topped the list by selling an average of 4.28 million bpd to the US.

America produces around 12 million barrels of oil a day but consumes a staggering 20 million bpd, meaning that it needs to import a substantial amount to meet its needs.
Saudi Arabia, on the other hand, is the world's largest oil exporter by shipping about 7 million barrels of crude daily around the globe, Reuters reported.

The EIA states that in 2018, the US imported an average of 48 million barrels per month of crude oil and petroleum products from the Persian Gulf region, a third down from a decade ago but still around the same levels as in 1995 and 1996.

“Saudi Arabia has always sought to portray itself as a reliable supplier of crude to the market and for this reason, we think they will opt to supply the export market for crude first, then products,” Robert Campbell, head of oil products research at Energy Aspects, said.

4--Fed runs repo Tuesday amid worries about keeping its benchmark rate in check

 

  • A series of rates in the financial markets spiked Monday, creating worry that the Federal Reserve was losing control.
  • Overnight repo rates surged to as high as 8.5% while the Fed’s benchmark funds rate traded at 2.25%, the top end of the range that the central bank targets.
  •  
  • The Fed responded Tuesday with a repurchase operation that ultimately involved $53 billion worth of securities.
  • “The issue that worries me more is when financial rates spike like this, unpredictable events start to come up ... random things that tend to precipitate financial crises,” said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott.

 5--Fed Steps Into Repo Market to Control Soaring Rates—Update 

 

For the first time in over a decade, the Federal Reserve Bank of New York took steps Tuesday to relieve pressures that were pushing short-term interest rates higher than the central bank wanted Monday. 

Strains developed Monday in short-term financing markets that suggested the central bank could lose control of its federal-funds rate, a benchmark that influences borrowing costs throughout the financial system. 

Bids in the fed-funds market on Tuesday morning reached as high as 5%, according to traders, well beyond the central bank's target range, which is 2% to 2.25%.
The Fed moved Tuesday morning to put $53 billion of funds back into the banking system through transactions known as repurchase agreements. After the moves, the New York Fed said the effective fed-funds rate, or the midpoint of transactions in that overnight market, stood at 2.25%, up from 2.14% on Friday. 

The pressures that had sent the fed-funds rate higher were related to shortages of funds for banks, stemming from rising government deficits and the central bank's decision to shrink its securities holdings in recent years. Its reduced holdings have soaked up funds in the financial system, crimping liquidity. 

The Fed is likely to continue to provide funding to ensure the smooth operation of the repo market for some time to come, although it isn't clear how long that might be, said Gennadiy Goldberg, a fixed-income strategist at TD Securities.
"I think they're going to be playing this one by ear," he said. "This is in every way, shape and form an emergency measure." 

Then on Monday, these strains were aggravated by a series of technical factors. Corporate tax payments were due to the U.S. Treasury and Treasury debt auctions settled, leading to large transfers of cash from the banking system.
Meantime, postcrisis financial regulations have made short-term money markets less nimble than they used to be. This didn't matter as much when the banking sector was awash in reserves and could absorb the kind of seasonal swings witnessed this week.

"The issue here is not that the level of reserves is structurally too low. We've reached the level where the market doesn't respond to temporary deposit flows as efficiently or fluidly," said Lou Crandall, chief economist at financial-research firm Wrightson ICA

 

6--Washington’s rush to indict Iran over Saudi attacks

 

7--BREAKING: Trump administration intervenes in bid to shut down GM strike



 


 

 

Sunday, September 15, 2019

Today's Links



“…a destabilising asymmetry at the heart of the IMFS (International Monetary and Financial System) is growing. While the world economy is being reordered, the US dollar remains as important as when Bretton Woods collapsed.” He states bluntly, “…In the longer term, we need to change the game…Risks are building, and they are structural.” Mark Carney, BoE, Time to ditch the dollar 

"People who voted for Obama TWICE refused to vote Hillary in minority communities. This is a failing of the party and the campaign and 8 more years of corporatism from Obama." Jimmy Dore, Many in Milwaukee neighborhood didn't vote and don't regret it.  





1--Two Major Saudi Oil Installations Hit by Drone Strike, and U.S. Blames Iran


The strikes illustrate how David-and-Goliath tactics using cheap drones are adding a new layer of volatility to the Middle East. Such attacks not only damage vital economic infrastructure, but can also increase security costs, disrupt markets and spread fear.

While the Houthis do not have significant financial resources, drones give them a way to hurt Saudi Arabia, which was the world’s third-highest spender on military equipment in 2018, investing an estimated $67.6 billion....

Rapidan Energy Group called Abqaiq by far the most important oil facility in the world.
“A successful attack on Abqaiq is about the worst thing energy security planners think about,” because the specialized equipment there would be difficult to quickly replace, said Mr. McNally, Rapidan’s president and a former White House energy adviser under President George W. Bush.


The situation further exacerbated after Adrian Darya 1 tanker, formerly known as Grace 1 was detained off Gibraltar. It was released on 15 August after it had been held for a month. A Gibraltar court ordered the release of the ship despite a last-minute request by the US to extend its detention in view of differences in US and European sanctions against Iran

 "This is such irresponsible simplification and it's how we get into dumb wars of choice," Democratic Sen. Chris Murphy of Connecticut tweeted in response to Pompeo.

"The Saudis and Houthis are at war," he added. "The Saudis attack the Houthis and the Houthis attack back. Iran is backing the Houthis and has been a bad actor, but it's just not as simple as Houthis=Iran."

Despite the Houthi claims of responsibility, US Secretary of State Mike Pompeo alleged late Saturday that Tehran is responsible for the “unprecedented attack on the world’s energy supply,” saying there is “no evidence the attacks came from Yemen.”

2--‘Maximum lies’: Iran rejects US’ claim it attacked Saudi oil facilities, warns it’s ready for war 

 

The Houthi rebels in Yemen have claimed responsibility for sending 10 armed drones to hit two Saudi oil refineries on Saturday. The attacks caused massive fires and other damage to the sites, which halved the kingdom’s oil output.

The Houthis previously admitted to launching similar drone and rocket attacks against Riyadh, some of which were directed at oil pumping stations. The Saudis have been waging a devastating aerial bombing campaign in civil war-torn Yemen, where they intervened in 2015 on behalf of ousted President Abdrabbuh Mansur Hadi.


3-- Iran rejects Pompeo’s ‘lies’ about Yemeni drone raids on Saudi oil sites


Zarif said Pompeo is now resorting to a campaign of “max deceit” against Iran after the administration he serves failed to achieve the desired results from its anti-Iran “maximum pressure” policy — which has seen Washington impose the toughest of economic sanctions against the Iranian nation.
“US & its clients are stuck in Yemen because of illusion that weapon superiority will lead to military victory,” said Zarif....

The Iranian proposal calls for an immediate ceasefire and end of all foreign military attacks, humanitarian assistance, a resumption of broad national dialog and “establishment of an inclusive national unity government.”

In similar comments, Abbas Mousavi, the spokesman for Zarif’s ministry, rejected Pompeo’s claims.
The Americans, he said, unleashed an anti-Iran “maximum pressure” campaign, which appears to be morphing into a campaign of “maximum lies” due to Washington’s policy failures.
Mousavi added that “futile allegations and blind statements as such are incomprehensible and meaningless within the framework of diplomacy.”

The Iranian official said such remarks “seem more like a plot being hatched by secret and intelligence organizations aimed at tarnishing a country’s image and setting the stage for future actions.”

4--‘War in Syria has come to an end’: Russian FM

 

“The war in Syria has really come to an end. The country is gradually returning to a normal, peaceful life. Some hotspots of tensions remain in the territories that are not controlled by the Syrian government, such as Idlib and the eastern bank of the Euphrates”, Lavrov said in an interview with the newspaper Trud....

 

Earlier in the day, Russian Foreign Minister Sergei Lavrov said that the Syrian opposition was playing an important role in the Syrian settlement.

“We believe the formation and launch of the committee designed to develop the constitutional reform will be an important step in advancing the political process led and carried out by the Syrians themselves with the UN’s assistance”, Lavrov said in an interview with the newspaper Trud. “In fact, convening it will enable the Syrian sides – the government and the opposition – to begin for the first time a direct dialogue on their country’s future”, he said.

On 12 September Russian President Vladimir Putin met with Israeli Prime Minister Benjamin Netanyahu.

According to the Russian foreign minister, Russia informed Israel about steps that it was taking to “support the efforts of the Syrian government in its fight against terrorists, who still remain in the Idlib zone, and promote issues related to humanitarian assistance and facilitation of the political process in the context of the formation of the constitutional committee”.

Syria has been mired in a civil war since 2011, with government forces fighting against numerous opposition groups as well as militant and terrorist organisations. Russia, along with Turkey and Iran, is a guarantor of the ceasefire in the Arab Republic. Moscow has also been providing humanitarian aid to residents of the crisis-torn country.

5--Military Situation In Northwestern Syria Following First Phase Of Army Advance On Idlib  (important analysis)

 

6--The spy who failed, Scott Ritter


There was a Russian spy whose information was used to push a narrative of Russian interference in the 2016 presidential election; this much appears to be true. Everything else that has been reported is either a mischaracterization of fact or an outright fabrication designed to hide one of the greatest intelligence failures in U.S. history — the use by a CIA director of intelligence data specifically manipulated to interfere in the election of an American president.

The consequences of this interference has deleteriously impacted U.S. democratic institutions in ways the American people remain ignorant of — in large part because of the complicity of the U.S. media when it comes to reporting this story. 

7--Prestitute Watch


These reporters and networks have been named in the WikiLeaks to have colluded with the DNC or Hillary campaign during the 2016 election cycle:
ABC – Cecilia Vega ABC - David Muir ABC – Diane Sawyer ABC – George Stephanoplous ABC – Jon Karl ABC – Liz Kreutz AP – Julie Pace, AP – Ken Thomas AP – Lisa Lerer AURN – April Ryan Bloomberg – Jennifer Epstein Bloomberg – John Heillman Bloomberg/MSNBC – Jonathan Alter Bloomberg – Mark Halperin Buzzfeed – Ben Smith Buzzfeed – Ruby Cramer CBS – Gayle King CBS – John Dickerson CBS – Norah O'Donnell, CBS – Steve Chagaris CBS – Vicki Gordon CNBC – John Harwood CNN – Brianna Keilar CNN – Dan Merica CNN – David Chailan CNN – Erin Burnett CNN – Gloria Borger CNN – Jake Tapper CNN – Jeff Zeleny CNN - Jeff Zucker CNN – John Berman CNN – Kate Bouldan CNN – Maria Cardona, CNN – Mark Preston CNN – Sam Feist Daily Beast – Jackie Kucinich GPG – Mike Feldman HuffPo – Amanda Terkel HuffPo – Arianna Huffington HuffPo – Sam Stein HuffPo – Whitney Snyder LAT – Evan Handler LAT – Mike Memoli McClatchy – Anita Kumar MORE – Betsy Fisher Martin, MSNBC – Alex Seitz-Wald MSNBC – Alex Wagner MSNBC – Andrea Mitchell MSNBC - Beth Fouhy MSNBC – Ed Schultz MSNBC – Joe Scarborough MSNBC – Mika Brzezinski MSNBC – Phil Griffin MSNBC – Rachel Maddow MSNBC – Rachel Racusen MSNBC – Thomas Roberts National Journal – Emily Schultheis, The Hill – Amie Parnes Univision – Maria-Elena Salinas Vice – Alyssa Mastramonoco Vox – Jon Allen WaPo – Anne Gearan WaPo – Greg Sargent WSJ – Laura Meckler WSJ – Peter Nicholas WSJ – Colleen McCain Nelson Yahoo – Matt Bai

8--Pompeo accuses Iran of launching attack with zero evidence


The United States swiftly discounted the Houthi claim. Late Saturday, Secretary of State Mike Pompeo tweeted: "Iran has now launched an unprecedented attack on the world's energy supply." And he added: "There is no evidence the attacks came from Yemen."
 
In response Iranian Foreign Minister Javad Zarif accused Pompeo of engaging in deception. He wrote on Twitter: "Having failed at 'max pressure', @SecPompeo's turning to 'max deceit' US & its clients are stuck in Yemen because of illusion that weapon superiority will lead to military victory. Blaming Iran won't end disaster."...
 
The Iraqi government Sunday issued a statement rejecting reports "about its land being used to attack Saudi oil facilities."
The Houthis themselves have suggested, without providing any evidence, that they had help from inside the kingdom for these latest attacks. Their spokesman Yahya Saree said the operation followed "an accurate intelligence operation and advance monitoring and cooperation of honorable people inside the kingdom."
 
Much depends on the damage reports, and what "work-arounds" might be possible to restore full production and soothe markets' nerves. "The most critical elements of Saudi Arabia's oil infrastructure include several redundancies," Kamal says.
 
 

 10--Many in Milwaukee Neighborhood Didn’t Vote — and Don’t Regret It

 

As Democrats pick through the wreckage of the campaign, one lesson is clear: The election was notable as much for the people who did not show up, as for those who did. Nationally, about half of eligible voters did not cast ballots.

Wisconsin, a state that Hillary Clinton had assumed she would win, historically boasts one of the nation’s highest rates of voter participation; this year’s 68.3 percent turnout was the fifth best among the 50 states. But by local standards, it was a disappointment, the lowest turnout in 16 years. And those no-shows were important. Mr. Trump won the state by just 27,000 voters.

Milwaukee’s lowest-income neighborhoods offer one explanation for the turnout figures. Of the city’s 15 council districts, the decline in turnout from 2012 to 2016 in the five poorest was consistently much greater than the drop seen in more prosperous areas — accounting for half of the overall decline in turnout citywide.

All four barbers had voted for Mr. Obama. But only two could muster the enthusiasm to vote this time. And even then, it was a sort of protest. One wrote in Mrs. Clinton’s Democratic opponent, Senator Bernie Sanders of Vermont. The other wrote in himself...

no president in his lifetime had done anything to improve the lives of black people, including Mr. Obama, whom he voted for twice. “It’s like I should have known this would happen. We’re worse off than before.”

“Trump was real, unlike a lot of liberal Democrats who are just as racist” but keep it hidden, he said, his jaw slathered with shaving cream. “You can reason with them all day long, but they think they know it all. They want to have control. That they know what’s best for ‘those people.’”

11-- Petrodollars and the System that Created It

 

12--Fed power play--Next slump will trigger fiscal policy takeover

 

Will the Fed replace Congress's powers of the purse?


14--Peak Ghawar: A Peak Oiler’s Nightmare


 


NOTES on decling oil supply from Saudi Arabia--

Running Dry

ghawar
https://www.forbes.com/sites/michaellynch/2019/04/05/declining-production-at-saudi-arabias-largest-oil-field-is-not-cause-for-concern/#79051251a200
When Saudi Aramco on Monday published its first ever profit figures since its nationalization nearly 40 years ago, it also lifted the veil of secrecy around its mega oil fields. The company’s bond prospectus revealed that Ghawar is able to pump a maximum of 3.8 million barrels a day -- well below the more than 5 million that had become conventional wisdom in the market.
“As Saudi’s largest field, a surprisingly low production capacity figure from Ghawar is the stand-out of the report,” said Virendra Chauhan, head of upstream at consultant Energy Aspects Ltd. in Singapore.

The Energy Information Administration, a U.S. government body that provides statistical information and often is used as a benchmark by the oil market, listed Ghawar’s production capacity at 5.8 million barrels a day in 2017. Aramco, in a presentation in Washington in 2004 when it tried to debunk the “peak oil” supply theories of the late U.S. oil banker Matt Simmons, also said the field was pumping more than 5 million barrels a day, and had been doing so since at least the previous decade.

In his book “Twilight in the Desert,” Simmons argued that Saudi Arabia would struggle to boost production due to the imminent depletion of Ghawar, among other factors. “Field-by-field production reports disappeared behind a wall of secrecy over two decades ago,” he wrote in his book in reference to Aramco’s nationalization.

It was a state secret and the source of a kingdom’s riches. It was so important that U.S. military planners once debated how to seize it by force. For oil traders, it was a source of endless speculation.
Now the market finally knows: Ghawar in Saudi Arabia, the world’s largest conventional oil field, can produce a lot less than almost anyone believed.
When Saudi Aramco on Monday published its first ever profit figures since its nationalization nearly 40 years ago, it also lifted the veil of secrecy around its mega oil fields. The company’s bond prospectus revealed that Ghawar is able to pump a maximum of 3.8 million barrels a day -- well below the more than 5 million that had become conventional wisdom in the market.
“As Saudi’s largest field, a surprisingly low production capacity figure from Ghawar is the stand-out of the report,” said Virendra Chauhan, head of upstream at consultant Energy Aspects Ltd. in Singapore.


King of Oil

Saudi Arabia relies on a handful of mega-fields to sustain its 12 million b/d capacity
Source: Saudi Aramco bond prospectus
The Energy Information Administration, a U.S. government body that provides statistical information and often is used as a benchmark by the oil market, listed Ghawar’s production capacity at 5.8 million barrels a day in 2017. Aramco, in a presentation in Washington in 2004 when it tried to debunk the “peak oil” supply theories of the late U.S. oil banker Matt Simmons, also said the field was pumping more than 5 million barrels a day, and had been doing so since at least the previous decade.
In his book “Twilight in the Desert,” Simmons argued that Saudi Arabia would struggle to boost production due to the imminent depletion of Ghawar, among other factors. “Field-by-field production reports disappeared behind a wall of secrecy over two decades ago,” he wrote in his book in reference to Aramco’s nationalization.
The new details about Ghawar prove one of Simmons’s points but he missed other changes in technology that allowed Saudi Arabia -- and, more importantly, U.S. shale producers -- to boost output significantly, with global oil production yet to peak.
The prospectus offered no information about why Ghawar can produce today a quarter less than 15 years ago -- a significant reduction for any oil field. The report also didn’t say whether capacity would continue to decline at a similar rate in the future.
In response to a request for comment, Aramco referred back to the bond prospectus without elaborating.

Lost Crown

The new maximum production rate for Ghawar means that the Permian in the U.S., which pumped 4.1 million barrels a day last month according to government data, is already the largest oil production basin. The comparison isn’t exact -- the Saudi field is a conventional reservoir, while the Permian is an unconventional shale formation -- yet it shows the shifting balance of power in the market.
Ghawar, which is about 174 miles long -- or about the distance from New York to Baltimore -- is so important for Saudi Arabia because the field has “accounted for more than half of the total cumulative crude oil production in the kingdom,” according to the bond prospectus. The country has been pumping since the discovery of the Dammam No. 7 well in 1938.
On top of Ghawar, which was found in 1948 by an American geologist, Saudi Arabia relies heavily on two other mega-fields: Khurais, which was discovered in 1957, and can pump 1.45 million barrels a day, and Safaniyah, found in 1951 and still today the world’s largest offshore oil field with capacity of 1.3 million barrels a day. In total, Aramco operates 101 oil fields.



Flames burn off at an oil processing facility at Saudi Aramco’s Shaybah oil field.
Photographer: Simon Dawson/Bloomberg
The 470-page bond prospectus confirms that Saudi Aramco is able to pump a maximum of 12 million barrels a day -- as Riyadh has said for several years. The kingdom has access to another 500,000 barrels a day of output capacity in the so-called neutral zone shared with Kuwait. That area isn’t producing anything now due a political dispute with its neighbor.
While the prospectus confirmed the overall maximum production capacity, the split among fields is different to what the market had assumed. As a policy, Saudi Arabia keeps about 1 million to 2 million barrels a day of its capacity in reserve, using it only during wars, disruptions elsewhere or unusually strong demand. Saudi Arabia briefly pumped a record of more than 11 million barrels a day in late 2018.
“The company also uses this spare capacity as an alternative supply option in case of unplanned production outages at any field and to maintain its production levels during routine field maintenance,” Aramco said in its prospectus.

Costly Strategy



For Aramco, that’s a significant cost, as it has invested billions of dollars into facilities that aren’t regularly used. However, the company said the ability to tap its spare capacity also allows it to profit handsomely at times of market tightness, providing an extra $35.5 billion in revenue from 2013 to 2018. Last year, Saudi Energy Minister Khalid Al-Falih said maintaining this supply buffer costs about $2 billion a year.
Aramco also disclosed reserves at its top-five fields, revealing that some of them have shorter lifespans than previously thought. Ghawar, for example, has 48.2 billion barrels of oil left, which would last another 34 years at the maximum rate of production. Nonetheless, companies are often able to boost the reserves over time by deploying new techniques or technology.
In total, the kingdom has 226 billion barrels of reserves, enough for another 52 years of production at the maximum capacity of 12 million barrels a day.
The Saudis also told the world that their fields are aging better than expected, with “low depletion rates of 1 percent to 2 percent per year,” slower than the 5 percent decline some analysts suspected.
Yet, it also said that some of its reserves -- about a fifth of the total -- had been drilled so systematically over nearly a century that more than 40 percent of their oil has been already extracted, a considerable figure for an industry that usually struggles to recover more than half the barrels in place underground.
https://www.bloomberg.com/news/articles/2019-04-02/saudi-aramco-reveals-sharp-output-drop-at-super-giant-oil-field



Saturday, September 14, 2019

Today's Links

New Survey Results
"Brexit should be delayed for a further three months to 31 January 2020"

Agree: 29%
Disagree: 49%  Britain Elects

"If the Government cannot get a Withdrawal Agreement through Parliament, they should leave the EU without a Withdrawal Agreement (i.e. without a deal)"

Agree: 42%
Disagree: 38%

By ratio of 2:1, voters think it's 'fundamentally undemocratic' for some MPs to try and prevent Brexit given that Govt promised before to implement the result' (50% to 26%, 24% DK), incl 29% of Remain voters @ComRes for @Telegraph  andrew hawkins

The argument that the 2016 EURef result shd be respected gets almost universal support among BXP voters (97%), plus massive support from Leavers (87%) and Con voters (85%) @ComRes for @Telegraph. Pretty clear that these folk wouldn't take revoking A50 very well...


"We are now in the thick of a ruthless but mostly covert Anglo-American alliance information war against Russia. In this war, individuals who speak up publicly in the cause of detente with Russia will be discouraged from public discourse."  

Effective information warfare requires the creation of enough public trust to make the public believe that state-supported lies are true

Power is being able to control what happens. Absolute poweris being able to control what people thinkabout what happens. If you can control what happens, you can have power until the public gets sick of your BS and tosses you out on your ass. If you can control what people thinkabout what happens, you can have power forever. As long as you can control how people are interpreting circumstances and events, there’s no limit to the evils you can get away with.”


It’s time to end the Korean War by replacing the 1953 Armistice Agreement, which temporarily halted the Korean War, with a formal peace agreement. When U.S. and North Korean commanders signed the ceasefire, they promised within 90 days to return to negotiate a permanent political settlement. That agreement is long overdue. It is in the interests of 80 million people who live on the Korean Peninsula, the millions more throughout the region, and all Americans. Ending 70 years of hostility and mistrust will take leaders across the political aisle to support peace." Truthout  

Bernie calls Maduro a tyrant & rejects Venezuelan socialist policies. If only Bernie, & other leftists, could see that Venezuela endures a murderous US economic war & right-wing coup attempt precisely because it has a gov't that has devoted resources to its poorest (& darkest).  aaron mate



 



1-- Managing Mass Opinion--"We are prisoners of the false narratives fed to us by our senior Five Eyes partners U.S. and UK"  The Info War gains pace


This mounting climate of Western Russophobia is not accidental: it is strategically directed, and it is nourished with regular maintenance doses of fresh lies. Each round of lies provides a credible platform for the next round somewhere else. The common thread is a claimed malign Russian origin for whatever goes wrong. 

So where is all this disinformation originating? Information technology firms in Washington and London that are closely networked into government elites, often through attending the same establishment schools or colleges like Eton and Yale, have closely studied and tested the science of influencing crowd opinions through mainstream media and online. They know, in a way that Orwell or Goebbels could hardly have dreamt, how to put out and repeat desired media messages. They know what sizes of ‘internet attraction nodes’ need to be established online, in order to create diverse critical masses of credible Russophobic messaging, which then attracts enough credulous and loyal followers to become self-propagating.

Firms like the SCL Group (formerly Strategic Communication Laboratories) and the now defunct Cambridge Analytica pioneered such work in the UK. There are many similar firms in Washington, all in the business of monitoring, generating and managing mass opinion. It is big business, and it works closely with the national security state....

two secret British disinformation networks operating at arms’ length from but funded by the UK security services and broader UK government establishment. They bring together high-ranking military and intelligence personnel, often nominally retired, journalists and academics, to produce and disseminate propaganda that serves the agendas of the UK and its allies....

Chris Donnelly... said that ‘disinformation is the issue which unites all the other weapons in this conflict and gives them a third dimension’. ..

We can confirm from the Anonymous leaked files the names of many people in Europe being recruited into these clusters of influence. They tend to be significant people in journalism, publishing, universities and foreign policy think-tanks: opinion-shapers. The leaked documents suggest how ideologically suitable candidates are identified: approached for initial screening interviews; and, if invited to join a cluster of influence, sworn to secrecy. ...

This is not about traditional spying or seeking agents of influence close to governments. It is about generating mass disinformation, in order to create mass climates of belief.   ...

There are only two kinds of news about Russia now permitted in our mainstream media, including the ABC and SBS: negative news and comment, or silence. Unless a story can be given an anti-Russian sting, it will not be carried at all. Important stories are simply spiked, like last week’s Eastern Economic Forum in Vladivistok, chaired by President Putin and attended by Prime Ministers Abe, Mahathir and Modi, among 8500 participants from 65 countries. ..

The anti-Russian U.S. bipartisan imperial state is now firmly back in control. Trump is safely contained as far as Russia is concerned.  

2--Drone attacks trigger huge fires at Saudi Aramco oil facilities, Houthis claim responsibility

 

Earlier this day, two Saudi Aramco factories were targeted by drones causing conflagration at both facilities. Yemen's Houthis claimed the responsibility for the attacks, vowing "broader range of attacks" in the future.

  three anonymous sources told Reuters that the attacks disrupted Saudi Arabia's oil production. According to one of the sources, the incident impacted almost half of the country's oil production, costing the nation roughly 5 million barrels per day.

Saudi Aramco's Abqaiq facility in the eastern part of the kingdom as well as a factory in Khurais were targeted by drones on Saturday morning. The attack caused fires at both sites, which were eventually contained by security forces.

3-- Russia prevented Israeli airstrikes in Syria, Putin warned Netanyahu: Report


Moscow has reportedly moved to prevent Israeli airstrikes in Syria, with Russian President Vladimir Putin warning Israeli Prime Minister Benjamin Netanyahu against the strikes.

Putin told Netanyahu that allowing Israeli strikes on Syrian military assets would undermine Moscow’s relations with Damascus, the Arabic edition of the UK-based Independent newspaper reported on Friday.

The report comes after Netanyahu met with Putin in the resort city of Sochi on Thursday to discuss “security coordination” in Syria.

According to an unnamed Russian source cited in the report, Moscow has also threatened to use its “fighter jets or the S-400 air defense system” in order to counter any Israeli aircraft striking Syria.
In August, Moscow stopped an airstrike on the strategic Qasioun region near Damascus, where a Syrian S-300 missile battery is said to be placed, according to the report.

Moscow allegedly prevented another airstrike later on a Syrian outpost in the southwestern province of Quneitra and a third in the western coastal province of Latakia.....


During the "failed" meeting, Netanyahu had also called for Tel Aviv to be given “freedom of action” against Iran by Russia.

The Israeli prime minister had even sought to use the meeting to “present positive message of the cooperation between the two countries” for his election campaign but failed, the report wrote.

According to the Russian source, Putin’s disagreements with Netanyahu also went as far as Putin condemning Tel Aviv’s recent actions in Lebanon, with the Russian president saying that he "rejects the aggression towards Lebanon's sovereignty."

4--Interview with Edward Snowden 'If I Happen to Fall out of a Window, You Can Be Sure I Was Pushed'

 

5--Latest Russian spy story looks like another elaborate media deception

 

The tale of Oleg Smolenkov is just the latest load of high-level BS dumped on us by intelligence agencies  Matt Taibbi

 

6--With Bolton Out of the Way, Peace With North Korea Is Possible, ,

 

There was never a diplomatic deal with North Korea that John Bolton liked. In fact, from the 1994 Agreed Framework the United States negotiated with North Korea to freeze its nuclear weapons program, up to the February 2019 Hanoi summit, Bolton has had his hand in sabotaging any agreement between Washington and Pyongyang.

Bolton was among the chief architects in the Bush administration who destroyed the Agreed Framework, the 1994 agreement the Clinton administration negotiated with then-leader Kim Jong Il to freeze North Korea’s nuclear weapons program.

According to former State Department official Robert Carlin, “The Agreed Framework did not fail; it was murdered. It was deliberately destroyed by the Bush administration. That’s not a failure.” Bolton, Donald Rumsfeld and Dick Cheney justified gutting the Agreed Framework after discovering that the North Koreans were enriching uranium. “This was the hammer I had been looking for to shatter the Agreed Framework,” Bolton wrote in his memoir.

Unsurprisingly, it was Bolton who played a key role in squandering the opportunity for a deal at the second summit between Trump and Kim Jong Un in Hanoi in February. According to longtime North Korea expert Leon Sigal, working-level meetings led by U.S. Special Representative Stephen Biegun ahead of the summit resolved a number of issues, including an end-of-war declaration, establishment of liaison offices in Pyongyang and Washington, and the scaling back of U.S.-South Korean war drills. Then, in Hanoi, Trump presented a “grand bargain” to Kim: trade all of its nuclear weapons, material and facilities in exchange for an end to U.S.-led sanctions. North Korea viewed this offer as a U.S. demand for North Korea’s unilateral disarmament. North Korea was further offended by Bolton, who explained on CBS after Hanoi that denuclearization also included Pyongyang’s “ballistic-missile program and its chemical- and biological-weapons program....

It’s time to end the Korean War by replacing the 1953 Armistice Agreement, which temporarily halted the Korean War, with a formal peace agreement. When U.S. and North Korean commanders signed the ceasefire, they promised within 90 days to return to negotiate a permanent political settlement. That agreement is long overdue. It is in the interests of 80 million people who live on the Korean Peninsula, the millions more throughout the region, and all Americans. Ending 70 years of hostility and mistrust will take leaders across the political aisle to support peace.

7--Neoconservatism

 

Neoconservatism is a particular brand of American conservatism, remarkably different from other brands of American political philosophy. Its two major concerns are free market capitalism and an interventionist foreign policy. During the George W. Bush administration and onward, more attention has been paid to this movement than in the past.

However, it is very poorly understood by the average citizen. It was probably best defined by the values of the Project for the New American Century (PNAC), a neocon think tank headed by William Kristol, whose father, Irving Kristol, was a key founder of neoconservatism, and who characterized a neoconservative as a "liberal mugged by reality." Well, their version of reality, anyway.
Its adherents are often referred to as "neocons."[1]
These enthusiastic intellectuals can become dangerous in wartime. Many hold messianic and uncompromising beliefs that they have never had to put into practice. All national movements have such pernicious mentors willing to justify the use of force for a utopian and unworkable vision.
—Chris Hedges, War is a Force That Gives Us Meaning    

 

 8--The Democratic presidential debate: A million miles from American social reality

 

There was zero discussion of the issue that is invariably described as the number one concern in opinion polls: jobs and the economy. There was no discussion of poverty and rising economic inequality. And while two major industries came in for demagogic attack—the health insurance giants and the drug companies—there was not the slightest criticism of the capitalist system.

Instead, there was the usual combination of demagogic promises, canned one-liners and mutual backstabbing, followed by vacuous rhetoric about the need for unity and the desire to serve the people—the baloney offered up in every election cycle. The purpose is to cover up the class realities in America: the capitalist class controls the two major parties, while the working class, the vast majority of the population, is politically disenfranchised. It is given a “choice” in the presidential election between two equally right-wing representatives of the corporate elite.

Sanders plays a specific role in the Democratic Party. He provides a left cover for this right-wing, corporate-controlled organization. His prominence in the presidential campaign is invariably cited as proof that the party has moved to the left, under conditions where the Democratic Party has become the favorite of both Wall Street and the military-intelligence apparatus.

Particularly since Trump entered the White House, the Democrats have tried to channel all popular opposition to the administration in a right-wing direction. This has taken the form of the anti-Russia campaign, which through bogus allegations that Trump is a Russian stooge has sought to generate popular support for a more aggressive assertion of American imperialist interests against Moscow in the Middle East, Central Asia, Ukraine and Eastern Europe...

While all the candidates claimed that they would withdraw from Afghanistan—a worthless pledge they made in previous debates—there was silence on Trump’s ratcheting up of economic and military pressure on Iran, his arming of Saudi mass killing in Yemen, the continuing civil war in Syria, and the sharp turn to the right in Israel, including the Trump-Netanyahu policy of annexation of the Golan Heights and, likely after the Israeli elections, large parts of the West Bank.

As for Trump’s campaign of economic and political subversion of Venezuela, there was general support, with Sanders calling President Nicolas Maduro a “tyrant” and being criticized by Castro for not using the word “dictator.” Sanders, who in the 1980s postured as a friend of the Sandinista revolution in Nicaragua, said nothing about the long history of Yankee imperialist intervention throughout Latin America.

In previous debates there had been some criticism of the Obama record, particularly on immigration, but in Houston, every candidate gave at least one shout-out to Obama and pledged to continue the “progress” supposedly made during his eight years in office. Typical was Elizabeth Warren, who said, “We all owe a huge debt to President Obama, who fundamentally transformed health care in America and committed this country to health care for every human being.”

In reality, Obamacare was a bonanza for the insurance companies, designed with their input and backed by the drug companies and for-profit hospital chains. It was part of an overall policy of favoring Wall Street at the expense of working people: Obama bailed out the banks, without a single CEO being prosecuted, and forced through the restructuring of the auto industry with a 50 percent wage cut for new-hires, setting the standard for the rise of new slave-wage empires like Amazon. His foreign policy extended the warmongering of the Bush administration, adding US intervention in Libya, Syria and Yemen to the ongoing conflicts in Iraq and Afghanistan.

None of the candidates could address the fact that it was the eight years of Obama that made President Donald Trump possible. Hillary Clinton ran in 2016 as the continuator of the Obama administration, the candidate of Wall Street and the military-intelligence apparatus, and significant sections of working people either turned to Trump in despair or refused to vote at all ..


At the end of the day, no matter who was nominated, what would a future Democratic Party administration look like? It would be right-wing, pursuing the specific foreign policy obsessions of the Democratic wing of the ruling elite, directed against Russia and elevating the danger of war with a nuclear-armed antagonist.