Steve Bull's Blog, page 1234
December 10, 2017
Is Oil About to Collapse?
US producers simply don’t play along with OPEC and Russia.
By Martin Tiller, Oil & Energy Insider:
WTI really does look like it is about to collapse. Let’s be clear, I am not necessarily talking about a return to the sub-$30 of the beginning of 2016 here, but a return to the more recent lows around $42 before too long is distinctly possible, and if that happens, who knows where we go from there? There are, as I have noted in the past, reasons to believe that the long-term path of oil is still upward, but more immediately there is one dominant factor that keeps adding downward pressure, large and still growing supply from North American shale producers.
Some say, as in this FT piece, that there are signs that U.S. shale production has peaked, but then that was also supposed to be the case in 2015 and 2016. I am sure that if I could bother to go back further I would find that the same thing was said in previous years too. The fact is though, that as the EIA chart below shows, after dropping off as price declined at earlier this year, U.S. crude production is growing again and will be higher this year than last and is expected to be higher again in 2018.
The chart below indicates why American producers are pumping at a growing rate. WTI has been recovering ever since the low of $26.05, and is now at levels not seen since June of 2015.
There are reasons for that recovery, most notably the production cuts agreed by OPEC countries and others including Russia and improving global growth, but those bullish factors are now fully priced in and the effect of that is to encourage U.S. E&P companies to, to borrow a phrase, drill, baby, drill!
…click on the above link to read the rest of the article…
Moscow Braces For More U.S. Sanctions
Whatever friendly feelings United States President Donald Trump might personally hold toward Moscow, the anti-Russian policy of his administration is even bolder than the course set in the last year of Barack Obama’s presidency. This conclusion was articulated by Russian Foreign Minister Sergei Lavrov, who expressed his dismay about the wave of “Russophobic hysteria” that, he said, had swept Washington (Russiancouncil.ru, November 30). Lavrov had shared that opinion before Michael Flynn, the former national security advisor in Trump’s administration, pleaded guilty of lying to the Federal Bureau of Investigation (FBI) about his contacts with Russian officials and opted to cooperate with the investigation of special counsel Robert Moeller. This investigation is now expected to produce more evidence of Russia’s interference in the U.S. presidential elections (Gazeta.ru, November 30). Stricter implementation of the law on sanctions is certain to follow, and Moscow is bracing for more punishment and preparing responses.
The Russian economy can be maintained at its just-above-zero growth trajectory only if Moscow’s agreement with the Organization of the Petroleum Exporting Countries (OPEC) on production cuts is sustained, thus supporting the oil price on its current plateau (Forbes.ru, November 30). Greater worries in the business elite pertain to the personal sanctions aimed at oligarchs with close ties to the Kremlin, which allegedly are being investigated by U.S. financial intelligence with alarming prejudice (Rosbalt, November 30). Huge fortunes evacuated to Western “havens” by carefully hidden channels are in danger, and even family members enjoying the “good life” in Monaco or Miami could feel the squeeze (Nezavisimaya Gazeta, November 28). It is well known in Russian business-political circles that the US State Department under Trump has not been particularly active in preparing new sanctions, so the news about the possible departure of Secretary of State Rex Tillerson brings more worries (RBC, December 1).
…click on the above link to read the rest of the article…
Peak Fantasy Time
If you want to know why both Wall Street and Washington are so delusional about America’s baleful economic predicament, just consider this morsel from today’s Wall Street Journal on the purportedly awesome November jobs report.
Wages rose just 2.5% from a year earlier in November—near the same lackluster pace maintained since late 2015, despite a much lower unemployment rate. But in a positive signfor Americans’ incomes, the average work week increased by about 6 minutes to 34.5 hours in November…. November marked the 86th straight month employers added to payrolls.
Whoopee!
Six whole minutes added to a work week that has been shrinking for decades owing to the relentlessly deteriorating quality mix of the “jobs” counted by the BLS establishment survey. In fact, even by that dubious measure, the work week is still shorter than it was at the December 2007 pre-crisis peak (33.8) and well below its 2000 peak level.
The reason isn’t hard to figure: The US economy is generating fewer and fewer goods producing jobs where the work week averages 40.5 hours and weekly pay equates to $58,400 annually and far more bar, hotel and restaurant jobs, where the work week averages just 26.1 hours and weekly pay equates to only $21,000 annually.
In other words, the ballyh0oed headline averages are essentially meaningless noise because the BLS counts all jobs equal—-that is, a 10-hour per week gig at the minimum wage at McDonald’s weighs the same as a 45 hour per week (with overtime) job at the Caterpillar plant in Peoria that pays $80,000 annually in wages and benefits.
When the line is trending inexorably from the upper left to the lower right, of course, it means there are more of the former and fewer of the latter. Six more minutes of continuing worse—-is still bad.
…click on the above link to read the rest of the article…
The U.S. Media Yesterday Suffered its Most Humiliating Debacle in Ages: Now Refuses All Transparency Over What Happened
The U.S. Media Yesterday Suffered its Most Humiliating Debacle in Ages: Now Refuses All Transparency Over What Happened
FRIDAY WAS ONE of the most embarrassing days for the U.S. media in quite a long time. The humiliation orgy was kicked off by CNN, with MSNBC and CBS close behind, with countless pundits, commentators and operatives joining the party throughout the day. By the end of the day, it was clear that several of the nation’s largest and most influential news outlets had spread an explosive but completely false news story to millions of people, while refusing to provide any explanation of how it happened.
The spectacle began on Friday morning at 11:00 am EST, when the Most Trusted Name in News
spent 12 straight minutes on air flamboyantly hyping an exclusive bombshell report that seemed to prove that WikiLeaks, last September, had secretly offered the Trump campaign, even Donald Trump himself, special access to the DNC emails before they were published on the internet. As CNN sees the world, this would prove collusion between the Trump family and WikiLeaks and, more importantly, between Trump and Russia, since the U.S. intelligence community regards WikiLeaks as an “arm of Russian intelligence,” and therefore, so does the U.S. media.
This entire revelation was based on an email which CNN strongly implied it had exclusively obtained and had in its possession. The email was sent by someone named “Michael J. Erickson” – someone nobody had heard of previously and whom CNN could not identify – to Donald Trump, Jr., offering a decryption key and access to DNC emails that WikiLeaks had “uploaded.”
…click on the above link to read the rest of the article…
December 9, 2017
Daniel Ellsberg: U.S. Military Planned First Strike On Every City In Russia and China … and Gave Many Low-Level Field Commanders the Power to Push the Button
Daniel Ellsberg – America’s most famous whistleblower, the former military analyst who leaked the Pentagon Papers which helped end the Vietnam war – has just published a book revealing that he was also one of the main nuclear war planners for the United States in the 1960s.
Ellsberg said in an interview this morning that the U.S. had plans for a first strike on every city in Russia and China … and that numerous field-level commanders had the power to start nuclear Armageddon:
[Interviewer] So, you made copies of top-secret reports for plans about nuclear war years before you copied the Pentagon Papers—
DANIEL ELLSBERG: That’s right.
[Interviewer] —and released them to the press?
DANIEL ELLSBERG: Essentially, my notes, and sometimes verbatim excerpts, not the entire plans themselves, but on plans that were then unknown to the president, to begin with, to President Kennedy. I briefed his aide, McGeorge Bundy, in his first month in office on the nature of the plans and some of the other problems, like the delegation of authority to theater commanders for nuclear war by President Eisenhower, which was fairly shocking to McGeorge Bundy, even though Kennedy chose to renew that delegation, as other presidents have.
But I was given the job of improving the Eisenhower plans, which was not a very high bar, actually, at that time, because they were, on their face, the worst plans in the history of warfare. A number of people who saw them, but very few civilians ever got a look at them. In fact, the joint chiefs couldn’t really get the targets out of General LeMay at the Strategic Air Command.
…click on the above link to read the rest of the article…
Qassem Soleimani’s letter to the US: Leave Syria or else! Could Al-Hasaka 2018 become Beirut 1983?
Well informed sources have said the commander of the Iranian Revolutionary Guards Corp Brigadier General Haj Qassem Soleimani sent a verbal letter, via Russia, to the head of the US forces commander in Syria, advising him to pull out all US forces to the last soldier “or the doors of hell will open up”.
“My message to the US military command: when the battle against ISIS (the Islamic State group) will end, no American soldier will be tolerated in Syria. I advise you to leave by your own will or you will be forced to it”, said Soleimani to a Russian officer. Soleimani asked the Russian responsible to expose the Iranian intentions towards the US: that they will be considered as forces of occupation if these decide to stay in north-east Syria where Kurds and Arab tribes cohabit together.
The Russians are not against the US presence and can adapt to this after defining the demarcation lines to avoid any clash. But Iran has a clear position and has decided not to abandon the Syrian President alone to face the US forces, if these stay behind.
Soleimani’s letter to the US clearly indicated the promise of ‘surprise measures’ against the US: ” You shall face soldiers and forces you have not experienced before in Syria and you will leave the country sooner or later”.
Russia conveyed to the US that Iran will stay in Syria as long as President Assad decides, he who insists in liberating the entire territory from all forces without exception. Russia confirmed to the US its intention to refrain from offering any air support to Iran and its allies in the case of attacks on US forces. From the Russian perspective, the Iran-US dispute is not its concern nor on its agenda.
…click on the above link to read the rest of the article…
Finally, An Honest Inflation Index – Guess What It Shows
Central bankers keep lamenting the fact that record low interest rates and record high currency creation haven’t generated enough inflation (because remember, for these guys inflation is a good thing rather than a dangerous disease).
To which the sound money community keeps responding, “You’re looking in the wrong place! Include the prices of stocks, bonds and real estate in your models and you’ll see that inflation is high and rising.”
Well it appears that someone at the Fed has finally decided to see what would happen if the CPI included those assets, and surprise! the result is inflation of 3%, or half again as high as the Fed’s target rate.
New York Fed Inflation Gauge is Bad News for Bulls
(Bloomberg) – More than 20 years ago, former Fed Chairman Alan Greenspan asked an important question “what prices are important for the conduct of monetary policy?” The query was directly related to asset prices and whether their stability was essential for economic stability and good performance. No one has ever offered a coherent answer even though the recessions of 2001 and 2008-2009 were primarily due to a sharp correction in asset prices.A new underlying inflation gauge, or UIG, created by the staff of the New York Fed may finally provide the answer. Its broad-based measure of inflation includes consumer and producer prices, commodity prices and real and financial asset prices. The New York Fed staff concluded that the new inflation gauge detects cyclical turning points in underlying inflation and has a better track record than the consumer price series.
The latest reading shows inflation of almost 3 percent for the past 12 months, compared with 1.8 percent for the consumer price index and 1.8 percent for core consumer prices, which exclude food and energy. Since the broad-based UIG is advancing 100 basis points above CPI, it indicates that asset prices are large, persistent and reflect too easy monetary policy.
…click on the above link to read the rest of the article…
Pakistan Air Force Ordered To Shoot Down US Military Drones
The Pakistan Air Force (PAF) has just been ordered to shoot down any foreign drones that violate the country’s airspace including attack drones operated by the United States, Chief Marshal Sohail Aman said on Thursday.
The announcement is a complete change from the air force’s previous view, of which foreign drone strikes on its soil were condemned but the air force never threatened to shoot them out of the sky. “We will not allow anyone to violate our airspace. I have ordered PAF to shoot down drones, including those of the US, if they enter our airspace, violating the country’s sovereignty and territorial integrity,” Air Chief Marshal Sohail Aman told an audience in Islamabad.
The statement was made about two weeks after a US drone strike targeted a militant compound in Pakistan’s tribal region along the border of Afghanistan, leading to multiple casualities, The Times of India reported.
This is the first time, the Pakistani government has taken a hard stance against foreign drones, especially the ones operated by US forces based in Afghanistan. The comment from Aman was shocking despite the US has been launching missiles into Pakistan and violating the country’s sovereignty since about 2004. The CIA was responsible for most US drone strikes in Pakistan until November 30, 2017, said The Times of India.
It’s believed, senior members of terrorist groups have been killed over the years in drone strikes, but it has come at a cost of “hundreds of civilian” deaths in the form of collateral damage.
…click on the above link to read the rest of the article…
Avoiding Nuclear War Is Our First Priority
Michel Chossudovsky, a distinguished professor in Canada, directs the Centre for Research on Globalization and the website Global Research, a font of important information unavailable from the presstitute Western media. In this article he tells us that if we do not focus on peace instead of war, we are all going to die: https://www.globalresearch.ca/what-you-need-to-know-about-north-korea-and-the-dangers-of-nuclear-war/5615328
Professor Chossudovsky makes an important point, made to me some years ago by my colleague Zbigniew Brzezinski and recently by former Secretary of Defense William Perry (see: https://www.paulcraigroberts.org/2017/12/05/walking-into-armageddon/ ). Professor Chossudovsky reminds us to “bear in mind that mistakes are often what determine the course of world history.” A US attack on North Korea would be a mistake that could precipitate a nuclear war.
There is no doubt that Chossudovsky is correct.
Additionally, the continued demonization of Russia, China, and Iran could precipitate a nuclear war. In other words, we are surrounded by very real threats created by Washington that receive no attention from Western governments and the presstitute media. As I wrote on December 5, we are “walking into Armageddon.” https://www.paulcraigroberts.org/2017/12/05/walking-into-armageddon/
Professor Chossudovsky has amassed a huge amount of information that makes clear the vast difference between the level-headed era of JFK/Khrushchev and the insanity of the post-Reagan era of the re-start of hostilities for the sake of the power and profit of the US military/security complex and the neoconservatives’ ideology of US world hegemony.
I am unsure that the peoples of the Western world can without violence against their governments do anything to prevent nuclear war, because the Western politicians are in the pay of the military/security complex and the financial and corporate interest groups that benefit from US hegemony. American hegemony produces profits, and for the sake of these profits Western leaders will risk the fate of the world.
…click on the above link to read the rest of the article…
The Zealous Pursuit of State-Sponsored Collapse
When Bakers Go Fishing
Government intervention into a nation’s economy is as foolish as attempting to control the sun’s rise and fall by law or force. But that doesn’t mean governments don’t meddle each and every day with the best – and worst – of intentions. The United States government is no exception.
From the “When the government helps the economy” collection: Breaking a few eggs while baking the bridge to nowhere omelet. [PT]
Over the years, layers and layers of interference by various federal, state, and local agencies have built up like grime on a kitchen window. The grease shines and smells of something fierce. The layers of government grime also drip and ooze into every crack and crevice of the economy.
These days, for example, it is impossible to carry out a simple private transaction with your barber or barista without some form of government interference. Has your barber obtained the required license and paid the obligatory fees to be able to legally taper your neck line? Has your barista’s espresso bean grinder passed city health inspection?
Is the hot Cup of Joe served in a paper cup of appropriate recycled material composition? Did the hot beverage exceed the legally accepted temperature standard? Did state and local governments receive their tax exaction upon payment?
The licensing racket – left panel: the basic definition of the racket; middle panel: how long it takes and what it costs to obtain licenses for assorted jobs in the US; right panel: the inexorable growth of rules and regulations. One shouldn’t be surprised that the pace of real economic growth has steadily declined since peaking in the late 19th century (or if one wants to focus on the modern era, since it peaked not too long after WW2).
…click on the above link to read the rest of the article…
