I’ll be on vacation and will not be posting 12/30 through 1/3/20. Posting will resume 1/4. I wish everyone a prosperous and Happy New Year.
Posted in Uncategorized
There’s more trouble looming for the Permian Basis petroleum industry. From Wolf Richter at wolfstreet.com:
“The capital markets for oil and gas remain extremely difficult.”
The Dallas Fed’s Forth Quarter Energy Survey, released today, portrays an industry that is turning increasingly somber. The data is based on responses of executives (names are not disclosed) of 170 energy companies – 111 exploration and production (E&P) companies; and 59 oil field services companies – located or headquartered in the Dallas Fed’s district, which covers Texas, northern Louisiana, and southern New Mexico and includes the most prolific shale oil-and-gas field in the US, the Permian Basin.
This time, there were additional questions, including on the reasons for “flaring” of natural gas in the Permian Basin. Natural gas is so abundant in the hydrocarbon mix produced at these wells (“associated” natural gas), and natural-gas pipeline takeaway capacity is so insufficient, that the surge in production led to the collapse of the price of natural gas in the area, reportedly dropping below zero on occasion. And it led to a record amount of natural gas getting flared in 2019.
Flaring large amounts of gas is a waste of natural resources, a source of air pollution, and a big financial drag for the already struggling oil-and-gas companies, investors, and banks.
Posted in Business, Debt, Economy, Energy, Financial markets
Tagged Dallas Federal Reserve, Natural gas, Oil, Permian Basin
For 2020, three contestants are at the starting line in the race to see what initiates a global credit crisis: European banks, the repo market, or Chinese banks. From Tim Staermose at sovereignman.com:
[Editor’s note: This letter was written by Tim Staermose, Sovereign Man’s Chief Investment Strategist]
The Chinese government isn’t exactly famous for its honesty and transparency.
So when the Chinese regulators are starting to openly report trouble in their banking system, it’s time to take notice.
According to the People’s Bank of China (PBOC)’s “2019 China Financial Stability Report,” 586 out of 4,379 Chinese lenders were officially deemed to be “high risk”.
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But that overall figure, bad as it is, may be masking the true extent of the problem.
According to the same report, over one third of rural lenders are deemed to be “high risk.” One in three banks in rural China. Hmmm.
And this lack of confidence is beginning to cause bank runs.
Yingkou Bank in Liaoning Province, and Yichuan Rural Commercial Bank in Henan Province, both faced bank runs in early November.
In May, the government took over troubled Baoshang Bank in Inner Mongolia – the first such government intervention to nationalize a private Chinese financial institution in more than 20 years.
A joint bailout by three state-owned financial institutions was also organized for the Bank of Jinzhou in July.
Posted in Banking, Business, Collapse, Currencies, Debt, Economy, Government, Trade
Tagged Chinese banks
Social media may be even more addicting than nicotine. From Charles Hugh Smith at oftwominds.com:
If we set out to design a highly addictive platform that optimized the most toxic, destructive aspects of human nature, we’d eventually come up with social media.
Social problems arise when initially harmless addictions explode in popularity, and economic problems arise when the long-term costs of the addictions start adding up. Political problems arise when the addictions are so immensely profitable that the companies skimming the profits can buy political influence to protect their toxic products from scrutiny and regulation.
That describes both the tobacco industry before its political protection was stripped away and social media today, as the social media giants hasten to buy political influence to protect their immensely profitable monopolies from scrutiny and regulation.
It’s difficult to measure the full costs of addictions because our system focuses on price discovery at the point of purchase, meaning that absent any regulatory measuring of long-term consequences, the cost of a pack of cigarettes is based not on the long-term costs but solely on the cost of producing and packaging the tobacco into cigarettes, and the enterprise side: marketing, overhead and profit.
(I address the consequences of what we don’t measure in my latest book, Will You Be Richer or Poorer?)
To take tobacco as an example, the full costs of smoking two packs of cigarettes a day for 20 years is not limited to the cost of the cigarettes: 365 days/year X 20 years X 2 packs (14,600) X cost per pack ($5 each) $73,000.
The full costs might total over $1 million in treatments for lung cancer and heart disease, and the reduction in life span and productivity of the smoker. (The emotional losses of those who lose a loved one to a painful early death is difficult to assign an economic value but it is very real.)
If the full costs of the nicotine addiction were included at the point of purchase, each pack of cigarettes would cost about $70 ($1,000,000 / 14,600). Very few people could afford a habit that costs $140 per day ($51,000 per year).
What are the full costs of the current addiction to social media? These costs are even more difficult to measure than the consequences of widespread addiction to nicotine, but they exist regardless of our unwillingness or inability to measure the costs.
A hard Brexit might be in both Macron’s and Johnson’s interests. From Tom Luongo at tomluongo.me:
Something odd is happening with Brexit. It looks like Prime Minister Boris Johnson is pushing for a hard Brexit much to my surprise.
Johnson’s strong showing in the recent election which secured the Tories its biggest majority since the days of Margaret Thatcher should have set the stage for the great Brexit bait and switch.
This has been my argument for months since Johnson became the front-runner to replace Theresa May. All Johnson had to do was manipulate events to get a majority which marginalizes the hard Brexiteers of the European Research Group (ERG).
Then he could undermine Brexit by giving back all the concessions during his subsequent negotiations with the EU over a trade deal.
This analysis should have been the correct one given the staunch opposition by the political elite in the U.K. to Brexit.
But something has changed.
Posted in Business, Geopolitics, Governments, Insurrection, Law, Politics, Trade
Tagged Boris Johnson, Brexit, Emmanuel Macron, EU, Germany
The Democrats and Deep State’s moves to get rid of Trump can best be thought of as a preemptive strike to keep Trump from going after them. From Robert Bridge at strategic-culture.org:
In the time-honored tradition of Machiavellian statecraft, all of the charges being leveled against Donald Trump to remove him from office – namely, ‘abuse of power’ and ‘obstruction of congress’ –are essentially the same things the Democratic Party has been guilty of for nearly half a decade: abusing their powers in a non-stop attack on the executive branch. Is the reason because they desperately need a ‘get out of jail free’ card?
Due to the non-stop action in Washington of late, few believe that the present state of affairs between the Democrats and Donald Trump are exclusively due to a telephone call between the US leader and the Ukrainian President Volodymyr Zelensky. That is only scratching the surface of a story that is practically boundless.
Back in April 2016, before Trump had become the Republican presidential nominee, talk of impeachment was already in the air.
“Donald Trump isn’t even the Republican nominee yet,” wrote Darren Samuelsohn in Politico. Yet impeachment, he noted, is “already on the lips of pundits, newspaper editorials, constitutional scholars, and even a few members of Congress.”
Posted in Crime, Cronyism, Government, History, Intelligence, Investigations, Law, Politics
Tagged Democrats, FBI, Hillary Clinton
The year almost past saw the ascendence of some uncommonly stupid ideas. From Max Gulker at aier.com:
At first glance 2019 was a rough year for anyone in favor of an economy and society guided from the bottom up by people with the freedom to exchange, cooperate, and think as they choose. The highly visible left flank of the Democratic Party, fully embracing socialism in name and approach, erupted with proposals that would drastically change the country in ways they intend and many more in ways they do not. Meanwhile, the Republican Party’s debt from its Faustian bargain with President Donald Trump began to come due.
What can we learn from bad ideas? Plenty, if we approach them with curiosity rather than assumed intellectual or moral deficiency on the part of those trafficking in them. The truth, that people have a really hard time understanding the benefits of free markets and bottom-up organization, is both difficult and galvanizing. Free-market ideas don’t really have a place in the current incarnation of our two-party system. We’re free agents and that can open a world of new possibilities if we let it.
Posted in Business, Capitalism, Economics, Economy, Governments, Politics, Technology, Trade
Tagged Big Tech, Elizabeth Warren, Green New Deal, protectionism
Here is a bunch of history about which most Americans have no clue. From Darius Shahtahmasebi at themindunleased.com:
US-led wars in the Middle East have killed some four million Muslims since 1990.
U.S.-led wars in the Middle East have killed some four million Muslims since 1990. The recently published Afghanistan papers, provided an insight into the longest war in U.S. history and revealed how U.S. officials continuously lied about the progress being made in Afghanistan, lacked a basic understanding of the country, were hiding evidence that the war was unwinnable, and had wasted as much as $1 trillion in the process.
Unfortunately, this phenomenon is nothing new. While most people accept that the United States has been interfering with Muslim populations quite heavily since World War II, the truth is that the U.S. has been fighting “forever wars” against Muslim populations for well over 100 years. (If you want to reallygo back into history, Thomas Jefferson was also fighting Muslims in the oft-forgotten Barbary Wars in the early 1800s).
The average American school curriculum likely doesn’t feature the fact that the U.S. waged a war from 1899 to 1913 in the southernmost island of the Philippines. Known as the Moro War, it was the longest sustained military campaign in American history until the war in Afghanistan surpassed it a few years ago. As a result, the U.S. and the Philippine governments are stillembroiled in a battle with Islamist insurgents in the southern Philippines, which takes the meaning of “forever war” to a whole new level.
Posted in Foreign Policy, Geopolitics, Government, History, Imperialism, Insurrection, Military, War
Tagged Moro War, Muslim insurgency, Philippines, Spanish-American War
The OPCW scandal has been virtually blacked out by the mainstream media. From Caitlin Johnstone at caitlinjohnstone.com:
This is getting really, really, really weird.
WikiLeaks has published yet another set of leaked internal documents from within the Organisation for the Prohibition of Chemical Weapons (OPCW) adding even more material to the mountain of evidence that we’ve been lied to about an alleged chemical weapons attack in Douma, Syria last year which resulted in airstrikes upon that nation from the US, UK and France.
This new WikiLeaks drop includes an email from the OPCW Chief of Cabinet Sebastien Braha (who is reportedly so detested by organisation inspectors that they code named him “Voldemort”) throwing a fit over the Ian Henderson Engineering Assessment which found that the Douma incident was likely a staged event. Braha is seen ordering OPCW staff to “remove all traces, if any, of its delivery/storage/whatever” from the organisation’s secure registry.
Posted in Geopolitics, Governments, Intelligence, Investigations, Media, Politics, War
Tagged Bellingcat, Douma gas attack, OPCW scandal, Syria
Britain’s military intelligence that deals with internal security, MI5, has been given de facto immunity for any crimes it might commit. From Finian Cunningham at strategic-culture.org:
In a landmark ruling last week, a panel of five senior British judges ruled that a secret government policy of granting immunity to its state security service was “legal”. Below is an interview with one of the human rights groups which challenged the murky policy demanding that it be banned.
First though, some background to the issue. British government policy holds implicitly that agents or informants operating for the state’s security service, MI5, are permitted to commit crimes without fear of prosecution if those crimes are committed in the line of duty to protect national security.
This is tantamount to the British state granting its agents and proxies a “license to kill”. The judges in the panel of the so-called Investigatory Powers Tribunal (IPT) have formally recognized this hitherto secret government policy as “legal”. The panel voted by 3 to 2 in favor. The two dissenting judges expressed deep concern that the ruling was “opening the door to future abuses” of power by British state agents.
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