Tag Archives: Saudi Arabia

The Putin Stimulus: $30 Oil Will Be Great for the Global Economy, by Marko Marjanović

Posted on March 15, 2020 | 1 comment

Cheap gas will make life easier for those of us who drive. It might put a dent in electric car sales, though. From Marko Marjanović at anti-empire.com:

The world should be mailing thank-you letters to Moscow right about now

$30 dollar oil will be great for the global economy (and in turn, a good global economy is good for oil). At a time when the global economy is visibly losing steam, when we’re overdue for another business cycle recession, and when nobody seems to have an answer, Moscow delivered what nobody else could — a massive economic boost for the whole world.

Sure there will be losers, chief among them US shale and the Saudis who need far higher prices to make their budgets work.

But then as a whole, the US shale has always been a loss-making enterprise for America. The scaling-down of shale is not bearish for the US at all. It’s bullish. If Putin can make Americans stop throwing more good money down the shale pit that’s not a bad thing, that’s a giant favor to the US and the health of its economy right there.

To say nothing of the effect of cheap energy itself. Personally I don’t think even $30 oil will be enough to avert a crash but if anything could, it would be that.

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Posted in Business, Economics, Economy, Energy, Geopolitics, Governments

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Saudi’s Brave Women Pull Back the Curtain on Crown Prince MBS, by Medea Benjamin and Ariel Gold

Posted on March 12, 2020 | Leave a comment

Somehow the plight of women in Wahhabist Saudi Arabia never enters into discussion of either the multiculturalism we’re supposed to embrace or American policy towards Saudi Arabia. From Medea Benjamin and Ariel Gold at antiwar.com:

This week, Crown Prince Mohammad bin Salman (MBS), Saudi Arabia’s 34-year-old de facto ruler, was on a tear. He arrested members of his own royal family and initiated an oil price war with Russia that has sent the price of oil – and the world’s stock markets – plummeting. Behind the headlines, however, another critical event will take place in Saudi Arabia starting March 18: women’s rights activist Loujain al-Hathloul, who was arrested almost two years ago for advocating the right to drive, is due in court. The diabolical MBS wants the world to believe he is the Arab world’s liberal reformer and took credit for eventually granting women the right to drive, but he is also the one who had al-Hathloul and nine other women thrown in prison, charging them as foreign agents and spies. The imprisonment of these peaceful women activists exposes the brutal nature of MBS’s regime and the duplicity of the Western democracies that continue to support him.

Loujain al-Hathloul gained notoriety in 2013 for campaigning against the driving ban when she posted videos of herself driving as an act of civil disobedience. She was first arrested in December 2014 when she attempted to drive from the United Arab Emirates to Saudi Arabia and spent 73 days in prison at that time. Al-Hathloul has also been an outspoken advocate for an end to the male guardianship system that treats women as no more than children throughout their entire lives.

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Posted in Civil Liberties, Foreign Policy, Geopolitics, Governments, Politics, Religion

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How Black Swans Are Shaping Planet Panic, by Pepe Escobar

Posted on March 11, 2020 | Leave a comment

One interesting possibility raised in this article is that Russia’s decision not to support OPEC and let the price of oil fall was directed at US shale oil producers and was payback for the Trump administration’s opposition to Nord Stream 2. From Pepe Escobar at consortiumnews.com:

Is the planet under the spell of a range of Black Swans – a Wall Street meltdown caused by an alleged oil war between Russia and the House of Saud, plus the uncontrolled spread of Covid-19 – leading to an all-out “cross-asset pandemonium,” as billed by Nomura, the Japanese holding company?

Or, as German analyst Peter Spengler suggests, whatever “the averted climax in the Strait of Hormuz had not brought about so far, might now come through ‘market forces’”?

Let’s start with what really happened after five hours of relatively polite discussions last Friday in Vienna. What turned into a de facto OPEC+ meltdown was quite the game-changing, plot twist.

OPEC+ includes Russia, Kazakhstan and Azerbaijan. Essentially, after enduring years of OPEC price-fixing – the result of relentless U.S. pressure over Saudi Arabia – while patiently rebuilding its foreign exchange reserves, Moscow saw the perfect window of opportunity to strike, targeting the U.S. shale industry.

Shares of some of these U.S. producers plunged as much as 50 percent on “Black Monday.” They simply cannot survive with a barrel of oil in the $30s – and that’s where this is going. After all, these companies are drowning in debt.

A $30 barrel of oil has to be seen as a precious gift/stimulus package for a global economy in turmoil – especially from the point of view of oil importers and consumers. This is what Russia made possible.

And the stimulus may last for a while. Russia’s National Wealth Fund has made it clear it has enough reserves (over $150 billion) to cover a budget deficit from six to 10 years – even with oil at $25 a barrel. Goldman Sachs has already gamed a possible Brent crude at $20 a barrel.

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Posted in Banking, Business, Debt, Economics, Economy, Energy, Financial markets, Foreign Policy, Geopolitics, Governments, Medicine

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And the Winner is? Deflation. By Tom Luongo

Posted on March 10, 2020 | Leave a comment

While central banks may try to inflate their way out of a debt deflation, when the bubble they’ve blown is as big as the current “everything” bubble, such efforts will be fruitless. From Tom Luongo at tomluongo.me:

Back in August I penned a post called, “The Battle of the ‘Flations Has Begun.”

With an historic 2000 point drop in the Dow Jones Industrials on Monday in response to Saudi Arabia and Russia declaring an oil price war on, well, everyone it’s clear that one of the two ‘flations, deflation, has won out.

In retrospect the timing out that post was pretty good, because just a few weeks later the repo markets seized up, SOFR zoomed to an all-time high of more than 10% and the Fed was awoken from its slumber to begin intervening to keep markets from collapsing.

It initiated a reflation trade based on the hope that the Fed just being there was all that was needed to restore confidence in global markets.

In that post I made the point that the choice between inflation and deflation is a non-choice. They are two sides of the same coin. The question is only who benefits from which side.

Those in power always choose inflation because, in their minds, it is less upsetting to the social order than deflation.

And their power rests on maintaining the current social order.

Deflation benefits savers and, frankly, normal people who don’t have access to new money at the lowest available prices, those set by the Fed’s discount window.

It gives them back power stolen from them through inflation.

The media helps this narrative limp along bamboozling all of us with poorly-conceived first order analysis of why we want inflation while refusing to admit they are a recipients of this government/central bank largess through advertising fees paid with a portion of this fake capital.

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Posted in Banking, Business, Economics, Economy, Energy, Geopolitics, Governments

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The Great American Shale-Oil Bust Turns into Massacre, by Wolf Richter

Posted on March 9, 2020 | 1 comment

There is carnage in the oil patch. From Wolf Richter at wolfstreet.com:

Shares of shale oil drillers collapsed by 25%-50% today. Their bonds got massacred. Saudi-Russia price-war strategy appears successful in wiping out investors in the US shale-oil sector.

It was so chaotic and brutal in the crude oil market today that the EIA, which is part of the US Department of Energy, emailed out this statement: “We have delayed the release of the Short-Term Energy Outlook to allow time to incorporate recent global oil market events. The outlook will now be released Wednesday, March 11, at 9:00 a.m.”

Shares of Occidental Petroleum, which is heavily involved in US shale oil and gas, collapsed by 53% today to $12.51. They’re down 85% since October 2018, when phase two of the Great American Oil Bust set in, with phase one having commenced in July 2014:

Oxy’s bonds – those that even traded – collapsed today. For example, this $750 million 30-year senior unsecured bond, with a coupon interest of 4.1%, closed on Friday at 92.5 cents on the dollar. Like many bonds, they don’t trade much, but are stuck in bond funds or held by institutional investors, and it’s hard to sell them because there are not many buyers.

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Posted in Banking, Business, Debt, Energy, Financial markets, Governments, Investing

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Saudi Arabia Starts All-Out Oil War: MbS Destroys OPEC By Flooding Market, Slashing Oil Prices, by Tyler durden

Posted on March 8, 2020 | 1 comment

This won’t knock the Russians, who produce oil cheaply and have little debt, out of the oil market, but it may well knock out an appreciable percentage of American frackers, who have both high debt and a higher production costs. From Tyler Durden at zerohedge.com:

With the commodity world still smarting from the Nov 2014 Saudi decision to (temporarily) break apart OPEC, and flood the market with oil in (failed) hopes of crushing US shale producers (who survived thanks to generous banks extending loan terms and even more generous buyers of junk bonds), which nonetheless resulted in a painful manufacturing recession as the price of Brent cratered as low as the mid-$20’s in late 2015/early 2016, on Saturday, Saudi Arabia launched its second scorched earth, or rather scorched oil campaign in 6 years. And this time there will be blood.

Following Friday’s shocking collapse of OPEC+, when Russia and Riyadh were unable to reach an agreement during the OPEC+ summit in Vienna which was seeking up to 1.5 million b/d in further oil production cuts, on Saturday Saudi Arabia kick started what Bloomberg called an all-out oil war, slashing official pricing for its crude and making the deepest cuts in at least 20 years on its main grades, in an effort to push as many barrels into the market as possible.

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Posted in Business, Debt, Economics, Energy, Geopolitics, Governments

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Saudi Arabia – As New Budget Problems Arise The Clown Prince Arrests More Family, by Moon of Alabama

Posted on March 7, 2020 | 1 comment

Things go from bad to worse for Saudi Arabia’s megalomaniac clown prince, Mohammad bin Salman. From Moon of Alabama at moonofalabama.org:

The Saudi Clown Prince Mohammed bin Salman removed his competition within the royal family:

Saudi Arabia has detained three senior Saudi princes including Prince Ahmed bin Abdulaziz, the younger brother of King Salman, and Prince Mohammed bin Nayef, the king’s nephew, for allegedly planning a coup, sources with knowledge of the matter said.Four sources told Reuters that Prince Ahmed and Mohammed bin Nayef were detained in the latest operation. Two sources, including a regional source, said Mohammed bin Nayef and his half-brother, Nawaf, were detained while at a private desert camp on Friday.

Crown Prince Mohammed, who is also referred to as MbS, “accused them (the princes) of conducting contacts with foreign powers, including the Americans and others, to carry out a coup d’etat,” the regional source said.

“With these arrests, MbS consolidated his full grip on power. It’s over with this purge,” the source added, indicating that no rivals remain to challenge his succession to the throne.

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Posted in Energy, Foreign Policy, Government, War

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Russia Just Told the World, “No.” by Tom Luongo

Posted on March 6, 2020 | 2 comments

For a supposed global pariah, many nations want a lot from Russia. Not surprisingly, Russia’s response is often no. From Tom Lungo at tomluongo.me:

There is real power in the word “No.”

In fact, I’d argue that it is the single most powerful word in any language.

In the midst of the worst market meltdown in a dozen years which has at its source problems within global dollar-funding markets, Russia found itself in the position to exercise the Power of No.

Multiple overlapping crises are happening worldwide right now and they all interlock into a fabric of chaos.

Between political instability in Europe, presidential primary shenanigans in the U.S., coronavirus creating mass hysteria and Turkey’s military adventurism in Syria, the eastern Mediterranean and Libya, markets are finally calling the bluff of central bankers who have been propping up asset prices for years.

But, at its core, the current crisis stems from the simple truth that those prices around the world are vastly overvalued.

Western government and central bank policies have used the power of the dollar to push the world to this state.

And that state is, at best, meta-stable.

But when this number of shits get this freaking real, well… meeting the fan was inevitable.

And all it took to push a correction into a full-scale panic was the Russians saying, “No.”

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Harvard, Yale, Others on the Take; Unreported Billions in Foreign Nations’ Contributions, by Joe Guzzardi

Posted on February 22, 2020 | 3 comments

What kind of influence are foreign nations exercising on US colleges and universities? From Joe Guzzardi at ustechworkers.com:

Harvard

The U.S. Department of Education (DOE) has opened an ongoing investigation into an aggregate $6.5 billion in unreported cash gifts donated by foreign nations to America’s leading universities. China, Iran, Russia, Qatar and Saudi Arabia are, according to The Wall Street Journal, among the most prominent foreign countries that made gifts that exceeded $250,000 annually, the total which requires reporting to federal authorities.

DOE documents reveal that, in some cases, the universities actively solicited foreign funding from nations potentially looking to steal research or “spread propaganda benefiting foreign governments.” The foreign donors, the DOE’s probe discovered, showed that “opaque foundations, foreign campuses, and other sophisticated legal structures to generate revenue” have been used to disguise actual funding sources.

Harvard and Yale universities are the DOE’s principal targets. In January, federal authorities charged Harvard’s chemistry department chair, Charles Lieber, with lying about the university’s Chinese grants. The Federal Bureau of Investigation said Lieber had established, apparently without Harvard’s knowledge, a research lab in China’s central city of Wuhan.

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Posted in Academia, Education, Governments, Law

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The Deeper Story Behind the Assassination of Soleimani, by Federico Pieraccini

Posted on January 9, 2020 | 1 comment

Iraq’s prime minister is telling an entirely different story about Qassem’s assassination than the one Trump, Pompeo, and the US news media are telling. From Federico Pieraccini at strategic-culture.org:

Days after the assassination of General Qasem Soleimani, new and important information is coming to light from a speech given by the Iraqi prime minister. The story behind Soleimani’s assassination seems to go much deeper than what has thus far been reported, involving Saudi Arabia and China as well the U.S. dollar’s role as the global reserve currency.

The Iraqi prime minister, Adil Abdul-Mahdi, has revealed details of his interactions with Trump in the weeks leading up to Soleimani’s assassination in a speech to the Iraqi parliament. He tried to explain several times on live television how Washington had been browbeating him and other Iraqi members of parliament to toe the American line, even threatening to engage in false-flag sniper shootings of both protesters and security personnel in order to inflame the situation, recalling similar modi operandi seen in Cairo in 2009, Libya in 2011, and Maidan in 2014. The purpose of such cynicism was to throw Iraq into chaos.

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