Baltic Dry Index. 751 -19 Brent Crude 49.45
LIR Gold Target in 2019: $30,000. Revised due to QE programs.
There
is no such uncertainty as a sure thing.
Robert
Burns.
Will Saudi Arabia’s new King Salman change the late King Abdullah’s oil
policy and cut oil production to raise the oil price? No, says Bloomberg, at
least for now, though the news of King Abdullah’s death made the oil shorts
greatly nervous forcing the weak into covering. At 79 and reportedly in poor
health, Saudi Arabia’s aged leadership adds yet more uncertainty into a Middle
East increasingly in violent turmoil. For now the price of Brent crude is still
struggling to hold just below 50. To this old dinosaur commodities trader, it’s
definitely a weekend to join the SNB in the bunker.
Saudi Arabia’s New King Will Likely Stick With Current Oil Policy
Jan 23, 2015 5:45 AM GMT
King Salman, Saudi Arabia’s new ruler, will probably stick to the oil policy
of his predecessor, the late King Abdullah,
maintaining production levels to preserve market share even at the cost of
depressing prices. A key indicator will be whether Salman, 79, retains the oil minister, Ali al-Naimi, who has driven decision-making since 1995. Al-Naimi, who turns 80 this year, has said he’d like to devote more time to his other job as the chairman of the science and technology university named after the late sovereign.
With production of 9.5 million barrels a day and exports of 7 million a day, Saudi Arabia accounts for more than a 10th of global supply and a fifth of the crude sold internationally. The kingdom’s refusal to surrender market share to rising U.S. production has contributed to the worst price slump since the global financial crisis of 2008.
“The Saudi leadership has already taken the tough decision to live with lower oil prices,” Florence Eid-Oakden, the chief economist at Arabia Monitor, a London-based consultant, said by phone. “Naimi is well-established, he’s respected and there shouldn’t be a change as long as the current cabinet is in place.”
Salman, in his previous capacity as crown prince, read a speech on behalf of the monarch on Jan. 6 that confirmed the continuity of Saudi oil policy in the face of market “tensions” caused by slow growth in the global economy.
More
Oil Jumps as Saudi King’s Death Spurs Speculation Over Policy
Jan 23,
2015 5:53 AM GMT
Oil jumped after the death of King Abdullah of Saudi Arabia, the biggest
producer in the Organization of Petroleum Exporting Countries. Futures rallied as much as 3.1 percent in New York and 2.6 percent in London after the Saudi royal court announced the death in a statement. Crown Prince Salman bin Abdulaziz will succeed Abdullah on the throne. The kingdom, the world’s largest crude exporter, led OPEC’s decision to maintain its oil-production quota at a meeting in November, exacerbating a global glut that’s driven prices lower.
“The passing of King Abdullah is going to increase uncertainty and increase volatility in oil prices in the near term,” Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co., said by phone. “I wouldn’t expect a change in policy in the near term to be known, but the passing comes at a challenging time for Saudi Arabia.”
Oil fell almost 50 percent last year as the U.S. pumped at the fastest rate in more than three decades and OPEC resisted calls to cut output. Crude stockpiles in the U.S., the world’s biggest oil consumer, rose by 10.1 million barrels through Jan. 16, the Energy Information Administration reported on Thursday. That was the biggest volume gain since March 2001.
More
Oil Drillers ‘Going to Die’ in 2Q on Crude Price Swoon
Jan 22, 2015 9:39 PM GMT
Oil drillers will begin collapsing under the weight of lower crude prices
during the second quarter and energy explorers who employ them will shortly
follow, according to Conway Mackenzie Inc., the largest U.S. restructuring
firm. Companies that drill wells and manage fields on behalf of oil producers will be the first to fall after the benchmark American crude, West Texas Intermediate, lost 57 percent of its value in seven months, said John T. Young, whose firm led the city of Detroit through its 2013 bankruptcy.
Oil companies have slashed thousands of jobs, delayed billions of dollars in projects and dropped or scaled back expansion plans in response to the prolonged rout in crude prices. For oilfield service providers that test wells and line the holes with steel and cement, the impact of price reductions forced upon them by explorers will start to pinch hard during the second quarter, Young said Thursday.
“The second quarter is going to be devastating for the service companies,” Young said in a telephone interview from Houston. “There are certainly companies that are going to die.”
More
Yesterday’s other big news was the ECB rolling out its one trillion euro
QE program to do whatever it takes to trash the euro. It’s a funny old world in
the death throes of the Great Nixonian Error of fiat money. Central planning
sure doesn’t work like it used to. Italian ex-Goldmanite central bankster
Draghi pulled a neocon Vickie Nuland yesterday essentially saying F**k Germany.
Stay long fully paid up, physical precious metals. Yesterday’s ECB action
Should suggest to Greek voters that the ECB and IMF parts of the troika, can be
turned. The German jackboot of slavery can be overthrown after all. The pity is
that it’s coming several years too late for the hapless Greek serfs.
Operator!
Give me the number for 911!
Mario
Draghi, with apologies to Homer Simpson.
Mario Draghi's QE blitz may save southern Europe, but at the risk of losing Germany
The ECB has put German political consent for the euro project at risk
Mario Draghi has achieved a spectacular triumph. His headline offering of €60bn (£45bn) a month in quantitative easing comes in the face of scorched-earth resistance from the German Bundesbank and the EMU creditor core. It is finally big enough to make an economic difference.Yet today's shock-and-awe action by the European Central Bank (ECB) comes three years late, after the eurozone has already been allowed to drift into deflation, and very nearly into a triple-dip recession.
The fact that the ECB is having to act on this scale a full six years into the world's post-Lehman recovery is in itself an admission that policy has been horribly behind the curve. Mr Draghi told us year ago in Davos that warnings of deflation were jejune and that QE was out of the question.
His hands were tied, of course, whatever he really thought at the time. He could not move too far beyond the ECB's centre of gravity. He had to demonstrate that all else had failed, and all else did then fail.
It comes after six years of mass unemployment that has ravaged southern Europe, eroded the job skills of a rising generation, left hysteresis scars, and lowered the growth trajectory and productivity speed limit of these countries for a quarter century hence. It comes as the eurozone's GDP is still languishing well below its pre-Lehman peak, with Italian industrial output down 24pc, back to levels first achieved in 1980.
The bond purchases will not begin
until March. They are cribbed about with conditions that may ultimately prove
damaging and possibly fatal.
Adam Posen, a former UK
rate-setter and now head of Washington's Peterson Institute, said the QE blitz
is large, but not as overwhelming as some think. "It will make some
difference. It's not going to be enough to fully offset deflationary forces,
let alone restore growth, but to the degree that Draghi was able to make it
sound open ended is a good thing," he said.
"Ultimately, €1.1 trillion
over 18 months versus euro area GDP is roughly a third of what the Bank of
England or Federal Reserve did under similar circumstances, and it's likely to
take more money to get the same effect in Europe right now," he said.
----The decision
amounts to an act of political defiance by a majority bloc in the Governing
Council - unmistakably a debtors' cartel of Latin states and like-minded states
- and therefore opens an entirely new chapter of the EMU story.
This Latin revolt is to violate
the sacred contract of EMU: that Germany gave up the D-Mark and bequeathed the
Bundesbank's legacy to the ECB on the one condition that Germany would never be
out-voted on monetary issues of critical importance.
Nor is the irritation confined to
Germany. The Tweede Kamer of the Dutch parliament was up in arms today, the
scene of fulminating protests from across the party spectrum. "Dutch
taxpayers should not be made liable for the debts of the Italian state,"
said the liberal VVD party
More
And in Greece.
22 January 2015 Last updated at 23:34
Greek elections: Syriza asks voters to end 'humiliation'
The leader of Greek left-wing
party Syriza says an end to "national humiliation" is near, as opinion
polls put the party ahead three days before the general election.
Alexis Tsipras asked supporters
for a clear mandate to enable him to end the country's austerity policies.
He repeated his promise to have
half of Greece's international debt written off when the current bailout deal
ends.
Greece has endured deep budget
cuts tied to the massive bailout.
Sunday's election is being
closely watched by financial markets which fear that a Syriza victory could
lead Greece to default on its debt and exit from the euro.
"On Monday, national
humiliation will be over. We will finish with orders from abroad," Mr
Tsipras told thousands of cheering supporters at the party's final election
rally in Athens.
"We are asking for a first
chance for Syriza. It might be the last chance for Greece."
The BBC's Mark Lowen says many
Greeks are prepared to give Mr Tsipras a chance, believing life cannot get any
worse.
Greece has gone through a deep
recession and still has a quarter of its workforce unemployed.
More
To
Start Press Any Key'. Where's the ANY key?
Mario
Draghi, with apologies to Homer Simpson.
At the Comex silver
depositories Thursday final figures were: Registered 66.61 Moz, Eligible 109.55
Moz, Total 176.16 Moz.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Son,
if you really want something in this life, you have to work for it. Now quiet!
They're about to announce the lottery numbers.
Mario
Draghi, with apologies to Homer Simpson.
Mario Draghi: Charlatan Of The Apparatchiks
by David Stockman •
Well, he finally launched
“whatever it takes” and that marks an inflection point. Mario Draghi has just
proved that the servile apparatchiks who run the world’s major central
banks will stop at nothing to appease the truculent gamblers they have
unleashed in the casino. And that means there will eventually be a monumental
crash landing because the bubble beneficiaries are now commanding the
bubble makers.
There is not one rational reason
why the ECB should be purchasing $1.24 trillion of existing sovereign bonds
and other debt securities during the next 18 months. Forget all
the ritual incantation emanating from the central bankers about
fighting deflation and stimulating growth. The ECB has launched
into a massive bond buying campaign for the sole purpose of
redeeming Mario Draghi’s utterly foolish promise to make speculators
stupendously rich by the simple act of buying now (and on huge repo
leverage, too) what he guaranteed the ECB would be buying latter.
So today’s program amounts to a
giant bailout in the form of a big fat central bank “bid” designed to prop
up prices in the immense parking lot of French, Italian,
Spanish, Portuguese etc. debt that has been accumulated by hedge funds, prop
traders and other rank speculators since mid-2012. Never before have so
few—-perhaps several thousand banks and funds—-been pleasured with so many
hundreds of billions of ill-gotten gain. Robin Hood is spinning madly in his
grave.
The claim that euro zone
economies are sputtering owing to “low-flation” is just plain ridiculous. For
the first time in decades, consumers have been blessed with approximate price
stability on a year/year basis, and this fortunate outbreak of honest money is
mainly due to the global collapse of oil prices—not some insidious
domestic disease called “deflation”. Besides, there is not an iota of proof
that real production and wealth increases faster at a 2% CPI
inflation rate compared to 1% or 0%.
Nevertheless, Draghi had no
problem gumming the following absolute gibberish in announcing that his big
monetary bazooka would be soon firing at will on the hapless citizens of the
E-19.
Today’s monetary policy decision
on additional asset purchases was taken…..(because) the prevailing degree
of monetary accommodation was insufficient to adequately address heightened
risks of too prolonged a period of low inflation.
This assertion is blatantly
contradicted by the facts. Outside of the commodities and industrial
materials complex, where prices are being weakened by the
rapid cooling of China’s construction madness, it is still”creeping
inflation as usual” in the EU-19 economies. There is flat out no emergency that
could possibly justify an ECB action which will result in the creation out of
thin air of what amounts to fraudulent credit equal to nearly 10% of
euro zone GDP in less than two years.
And folks, it is fraudulent
credit——really dangerous, toxic stuff. The $1.2 trillion of debt securities to
be purchased by the ECB (and its constituent national central banks) in
the secondary market originally financed that amount of labor, material and
capital consumption. Can you actually pay such massive sums
to vendors of real goods and services with central bank manufactured
digital credits and still pretend that the economy is functioning on the level?
If so, why not manufacture $5 trillion or even $15 trillion of ECB credit
and buy up the entire euro bond market?
In short, Draghi is presiding
over a gargantuan fraud and can’t be so stupid as not to recognize it.
Indeed, the dictionary definition of a “charlatan” could not more aptly
describe his current gambit:
“….a person falsely claiming to
have a special knowledge or skill; a fraud”.
More
Another bleak weekend, with Greek voters getting ready to poke an
already ECB thumped, Mrs Merkel in the eye with a sharp stick. Who’d want the
job of paymaster of Euroland if Germany opts out of the EUSSR? Have a great
weekend everyone.
I'm
in no condition to drive...wait! I shouldn't listen to myself, I'm drunk!
Mario
Draghi, with apologies to Homer Simpson.
The monthly Coppock Indicators finished December.
DJIA: +138 Up. NASDAQ:
+247 Down. SP500: +198 Down.
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