Tuesday, 17 November 2015

It Was All About Oil.

Baltic Dry Index. 550 -10        Brent Crude 44.47

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

Today, a look at oil. Lower for longer and the reality of the continuing ISIS disaster of the American War Party.

Hollande Calls on U.S.-Russia Alliance to Combat Islamic State

November 16, 2015 — 11:22 AM GMT Updated on November 17, 2015 — 3:59 AM GMT
French President Francois Hollande called on the U.S. and Russia to forge a new alliance to destroy Islamic State as he tried to rally a stunned nation behind a new drive to eradicate domestic terrorism after last week’s carnage in Paris.

The attacks that killed at least 129 people were “planned in Syria, organized in Belgium, and carried out in France,” Hollande told a rare joint session of parliament in Versailles, just outside the capital. A global effort was needed, he said, to raze “the biggest terrorist factory the world has ever known.”

----France will test the appetite for such a collaboration at the United Nations with a resolution that can only pass with the support of veto-carrying Russia and the U.S., which are conducting separate bombing campaigns and have clashed over political goals.

OPEC Export Price Falls Below $40 for First Time Since 2009

The average price of crude sold by OPEC fell below $40 a barrel for the first time 2009, underscoring the financial cost of the group’s strategy to defend its market share.
The daily OPEC Basket Price fell to $39.21 a barrel on Nov. 13, according to an e-mail on Monday from the organization’s secretariat in Vienna. The basket, an average of export grades from each of the group’s 12 members, typically trades below international oil futures as some OPEC nations pump denser or higher-sulfur crude that’s less profitable to refine.
Oil has slumped since the middle of last year as the Organization of Petroleum Countries keeps output elevated to pressure rivals it sees as responsible for creating a global surplus. A decline in production among its higher-cost competitors including U.S. shale drillers has now slowed, with output still above last year’s level. With OPEC members’ revenues diminished, the group may reconsider its approach if the price slump persists, according to the International Energy Agency.
Low oil prices aren’t just problematic for higher-cost producers, said Olivier Jakob, managing director at consultants Petromatrix GmbH in Zug, Switzerland. “It is also providing a challenging fiscal environment” for OPEC nations, he said.
OPEC’s annual revenues may be curbed to $550 billion at current prices from an average of more than $1 trillion in the last five years, Fatih Birol, executive director at the IEA, said in London on Nov. 10. Even Saudi Arabia, the group’s biggest member, faces a budget deficit this year that the International Monetary Fund predicts will exceed 20 percent of gross domestic product.
Still, IEA expects the price slump would need to persist for several years before the kingdom reconsiders its current strategy. OPEC Secretary-General Abdalla El-Badri, said this month that the global market is on track to rebalance next year.
OPEC ministers will meet to review their current policy on Dec. 4 in Vienna.

Oil Theft Soars as Downturn Casts U.S. Roughnecks Out of Work

November 16, 2015 — 10:00 AM GMT
The moon was a waning crescent sliver Sept. 9 when a man emerged from an oil tanker, sidled up to a well outside Cotulla, Texas, and siphoned off almost 200 barrels. Then, he drove two hours to a town where he sold his load on the black market for $10 a barrel, about a quarter of what West Texas Intermediate currently fetches.
“This is like a drug organization,” said Mike Peters, global security manager of San Antonio-based Lewis Energy Group, who recounted the heist at a Texas legislative hearing. “You’ve got your mules that go out to steal the oil in trucks, you’ve got the next level of organization that’s actually taking the oil in, and you’ve got a gathering site -- it’s always a criminal organization that’s involved with this.”
From raw crude sucked from wells to expensive machinery that disappears out the back door, drillers from Texas to Colorado are struggling to stop theft that has only worsened amid the industry’s biggest slowdown in a generation. Losses reached almost $1 billion in 2013 and likely have grown since, according to estimates from the Energy Security Council, an industry trade group in Houston. The situation has been fostered by idled trucks, abandoned drilling sites and tens of thousands of lost jobs.
“You’ve got unemployed oilfield workers that unfortunately are resorting to stealing,” said John Chamberlain, executive director of the Energy Security Council.
In Texas, unemployment insurance claims from energy workers more than doubled over the past year to about 110,000, according to the Workforce Commission. In North Dakota, average weekly wages in the Bakken oil patch decreased nearly 10 percent in the first quarter of 2015, compared with the previous quarter, according to the Federal Reserve Bank of Minneapolis.
With dismissals hitting every corner of the industry, security guards hired during boom times are receiving pink slips. That’s leaving sites unprotected.

Blowback—–The Washington War Party’s Folly Comes Home To Roost

by David Stockman • 

Exactly 26 years ago last week, peace was breaking out in a manner that the world had not experienced since June 1914. The Berlin Wall—-the symbol of a century of state tyranny, grotesque mass warfare and the nuclear sword of Damocles hanging over the planet—-had come tumbling down on November 9, 1989.
It was only a matter of time before the economically decrepit Soviet regime would be no more, and that the world’s vast arsenal of weapons and nuclear bombs could be dismantled.

Indeed, shortly thereafter according to Gorbachev, President George H.W. Bush and Secretary Baker promised that NATO would not be expanded by “as much as a thumb’s width further to the East” in return for acquiescing to the reunification of Germany.

So with its “mission accomplished” there was no logical reason why NATO should not have been disbanded in parallel with the Warsaw Pact’s demise, and for an obvious and overpowering reason: On November 9, 1989 there were no material military threats to US security anywhere on the planet outside of the suddenly vanishing front line of the Cold War.

As it turned out, however, there was a virulent threat to peace still lurking on the Potomac. The great general and president, Dwight Eisenhower, had called it the “military-industrial complex” in his farewell address, but that memorable phrase had been abbreviated by his speechwriters, who deleted the word “congressional” in a gesture of comity to the legislative branch.

So restore Ike’s deleted reference to the pork barrels and Sunday afternoon warriors of Capitol Hill and toss in the legions of beltway busybodies that constituted the civilian branches of the cold war armada (CIA, State, AID etc.) and the circle would have been complete. It constituted the most awesome machine of warfare and imperial hegemony since the Roman legions bestrode most of the civilized world.

----So the demise of the Soviet Union in 1991 meant the world could have reverted to the status quo ante. That is, to a normalcy of peace, liberal commerce and a minimum of armaments that had prevailed in the late 19th century. The 20th century curse of militarism, totalitarianism and global warfare was over.

Needless to say, the sudden end to 20th century history posed an existential threat to Imperial Washington. A trillion dollar complex of weapons suppliers, warfare state bureaucracies, intelligence and security contractors, arms exporters, foreign aid vendors, military bases, grand poobahs and porkers of the Congressional defense committes, think tanks, research grants and much more——were all suddenly without an enemy and raison d’etre.

As it has happened, Imperial Washington did find its necessary enemy in the rise of so-called “global terrorism”.

But the everlasting truth is that the relative handful of suicidal jihadi who have perpetrated murderous episodes of terror like 9/11 and this weekend’s carnage in Paris did not exist in November 1989; and they would not be marauding the West today save for the unrelenting arrogance, stupidity, duplicity and mendacity of Imperial Washington.

----So what has metastasized from the ruins left by American intervention is not an organized military threat or state sponsored attacks on the civilian life of the West; it is the random blowback of suicidal flotsam and jetsam that have been puked from the jaws of hell which Washington so foolishly opened.

It did so under the banner of two stunningly false predicates. One of these was the long-standing Washington error that America’s security and economic well-being depends upon keeping an armada in the Persian Gulf in order to protect the surrounding oilfields and the flow of tankers through the straits of Hormuz.

That doctrine has been wrong from the days it was officially enunciated by one of America’s great economic ignoramuses, Henry Kissinger, at the time of the original oil crisis in 1973. The 42 years since then have proven in spades that its doesn’t matter who controls the oilfields, and that the only effective cure for high oil prices is the free market, not the Fifth Fleet.

Every tin pot dictator from Libya’s Muammar Gaddafi to Hugo Chavez in Venezuela to Saddam Hussein, to the bloody-minded chieftains of Nigeria, to the purportedly medieval Mullahs and fanatical Republican Guards of Iran have produced oil—-and all they could because they desperately needed the revenue.

----Way back when Jimmy Carter was telling us to turn down the thermostats and put on our cardigan sweaters, those of us on the free market side of the so-called energy shortage debate said the best cure for high oil prices is high prices. Now we know.

So the Fifth Fleet and its overt and covert auxiliaries should never have been there—–going all the way back to the CIA’s coup against Iranian democracy in 1953. It was in the name of protecting the oil fields that the Washington war machine installed the monstrous Mohammad Reza Pahlavi on the Peacock Throne and thereby inaugurated 25 years of plunder and Savak terror.

Likewise, it was the Washington war machine that decided upon the “tilt to Saddam” in his 1980s war on the Islamic Republic, and which provided him with satellite based tracking and targeting services when he rained chemical weapons on barely armed Iranian forces.

----But having turned Iran into an enemy, Imperial Washington was just getting started when 1990 rolled around. Once again in the name of “oil security” it plunged the American war machine into the politics and religious fissures of the Persian Gulf; and did so on account of a local small potatoes conflict that had no bearing whatsoever on the safety and security of American citizens.

As US ambassador Glaspie rightly told Saddam Hussein on the eve of his Kuwait invasion, America had no dog in that hunt. Kuwait wasn’t even a country; it was a bank account sitting on a swath of oilfields around an ancient trading city that had been abandoned by Ibn Saud in the early 20th century. That’s because he didn’t know what oil was or that it was there, and, in any event, it had been made a separate protectorate by the British in 1913 for reasons that are lost in the fog of diplomatic history.

Likewise, Iraq’s contentious dispute with Kuwait had been over its claim that the Emir of Kuwait was “slant drilling” across his border into Iraq’s Rumaila field. Yet it was a wholly elastic boundary of no significance whatsoever.

In fact, the dispute over the Rumaila field started in 1960 when an Arab League declaration arbitrarily marked the Iraq–Kuwait border two miles north of the southernmost tip of the Rumaila field.

And that newly defined boundary, in turn, had come only 44 years after a pair of English and French diplomats had carved up their winnings from the Ottoman Empire’s demise by laying a straight ruler on the map. So doing, they thereby confected the artificial country of Iraq from the historically independent and hostile Mesopotamian provinces of the Shiite in the south, the Sunni in the west and the Kurds in the north.

In short, it did not matter who controlled the southern tip of the Rumaila field—–the brutal dictator of Baghdad or the opulent Emir of Kuwait. Not the price of oil, nor the peace of America nor the security of Europe nor the future of Asia depended upon it.

----What the neocon doctrine of Regime Change actually did, of course, was to foster the Frankenstein that became ISIS. In fact, the only real terrorists in the world which threaten normal civilian life in the West are the rogue offspring of Imperial Washington’s post-1990 machinations in the middle east.

The CIA trained and armed Mujahedeen mutated into al-Qaeda not because Bin Laden suddenly had a religious epiphany that his Washington benefactors were actually the Great Satan owing to America’s freedom and liberty. His murderous crusade was inspired by the Wahhabi fundamentalism loose in Saudi Arabia—–a religious fanaticism which was agitated to a fever pitch by Imperial Washington’s violent plunge into Persian Gulf political and religious quarrels, the stationing of troops in Saudi Arabia, and the decade long barrage of sanctions, embargoes, no fly zones and covert actions against the Sunni regime in Bagdad after 1991.
At the Comex silver depositories Monday final figures were: Registered 43.34 Moz, Eligible 118.27 Moz, Total 161.61 Moz. 

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.
Today, public relations German Style. Volkswagen follows up last week’s not quite a $1,000 a dirty diesel, killer  car insult, with an ad campaign that could only have been thought up in Wolfsburg. I’ve never been to Wolfsburg, but it must be an incredibly dull, unimaginative place.
Nobody ever went broke underestimating the taste of the American public.

H. L. Mencken. (Though VW might be an exception.)

Volkswagen apologizes for emissions scandal with full-page ad in dozens of papers

By Dante D'Orazio on November 15, 2015 05:30 pm
Volkswagen is apologizing. The company's American arm rolled out its first ad campaign today addressing the emissions scandals that have rocked the company over the past couple of months. The understated full-page ad, published in over 30 newspapers across the US today, says in large type: "We're working to make things right."

It continues, "Over the past several weeks, we've apologized to you, our loyal customers, about the 2.0L VW emissions issue. As we work tirelessly to develop a remedy, we ask for your continued patience." Volkswagen has yet to develop a solution for fixing the emissions on vehicles that utilized a defeat device to fool regulators into recording low emissions values on certain diesel vehicles.

Beyond serving as a much-needed apology to its customers — who woke up after the scandal to find the resale value on their cars had depreciated — the ad also promotes the company's "goodwill package" announced this past week. The German carmaker is offering $500 in the form of a Visa gift card to owners of models effected by the scandal. It's also tossing in a $500 gift card towards the purchase of a new Volkswagen, and three years of no-cost roadside assistance.

If that doesn't quite seem like enough to make up for Volkswagen's major failures that led up to the scandal, the company says in the public letter that "we sincerely hope you see this as a first step toward restoring your invaluable trust."


Solar  & Related Update.

With events happening fast in the development of solar power and graphene, I’ve added this new section. Updates as they get reported. Is converting sunlight to usable cheap AC or DC energy mankind’s future from the 21st century onwards? DC? A quantum computer next?

Apple forges deal to run all Singapore operations on solar power, confirms first local Apple Store

By Roger Fingas Sunday, November 15, 2015, 08:43 pm PT (11:43 pm ET)

Apple on Sunday announced a deal that will see its Singapore operations fully powered by solar energy, expanding on similar efforts in countries like the U.S. and China, and also confirmed an upcoming local Apple Store that will be the first in Southeast Asia.

Beginning in January, local firm Sunseap Group will supply power to Apple from a network of panels built on top of 800 buildings in the city, Reuters said. Apple should in fact be the first company in Singapore to operate entirely on renewable energy.

Apple's VP of Environment, Policy and Social Initiatives, Lisa Jackson, noted that her company will supply Sunseap with financing to complete a solar build-out. The executive didn't say how much money would be offered, but the project as a whole will generate 50 megawatts of power, with 33 megawatts going to Apple. Jackson added that Singapore's development board offered backing because some of the energy will flow to public-owned housing.

Apple is gradually working towards making all of its global operations and facilities supported by renewable energy. It recently finished a 40-megawatt project in China's Sichuan Province, for instance, finally making its operations in both that country and the U.S. either fully powered or offset by renewables.

The trickier problem has been third-party suppliers, which still rely heavily on coal. Apple and its primary supplier, Foxconn, have however announced solar projects that will
produce hundreds of megawatts of solar energy, and the long-term goal is to reach 2 gigawatts of clean sources for the Apple supply chain.

As part of today's announcement, Apple confirmed the opening of its
first local retail outlet in Singapore, which also happens to be the company's first in Southeast Asia. Apple SVP of Retail Angela Ahrendts added color to the announcement in a statement to TechCrunch.


The monthly Coppock Indicators finished October

DJIA: +31 Down. NASDAQ: +125 Down. SP500: +53 Down. 

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