November 2016 – Page 8

OPEC Agrees To Cut Oil Production By 1.2 Million Barrels A Day, Details Pending

The much anticipated headline is out and, as Bloomberg reports, OPEC has reached a deal agreeing to cut oil production by 1.2 million barrels per day to 32.5mmbpd, according to a delegate.

OPEC REACHES AGREEMENT TO CUT OIL OUTPUT: DELEGATE
OPEC AGREES TO CUT OUTPUT BY 1.2M B/D TO 32.5M B/D: DELEGATE

We now await the details of who will cut and by how much, how will the production cuts be implemented and supervised, and whether the deal is conditional on Non-OPEC, mostly Russia, participation. Having soared over 7% in advance of the announcement, crude remained near its highs of the day. The front-month Brent contract also resumes climb, trading $3.55 higher at $49.93.

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ADP Employment Report Jumps Most In 5 Months After Trump Win

Following October’s disappointment (+147k), November’s ADP employment printed a much better than expected 216k (over 170k exp), thanks to a notable downward revision to October to 119k. Goods-producing jobs dropped once again (-11k) with a renewed surge in services employment (+228k). While this November post-Trump spike is noteworthy (highest in 5 months), there continues to be a medium-term trend of weakening job growth in America.

A good post-trump spike, but the 24-month trend continues to deteriorate:

Spot the odd one out…

From the report:

“For the month of November 2016 we saw very strong job growth that has almost doubled in gains over October 2016,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “This growth was seen in primarily consumer-driven industries like retail and, leisure and hospitality – across all company sizes. Overall, consumers are feeling confident and are driving the strong performance we currently see in the job market.”

Mark Zandi, chief economist of Moody’s Analytics, said, “Businesses hired aggressively in November and there is little evidence that the uncertainty surrounding the presidential election dampened hiring. In addition, because of the tightening labor market, retailers may be accelerating seasonal hiring to secure an adequate workforce to meet holiday demand, although total expected seasonal hiring may be no higher than last year’s.”

Change in Nonfarm Private Employment

Change in Total Nonfarm Private Employment

Breakdown:

Full Infographic…

ADP National Employment Report: Private Sector Employment Increased by 216,000 Jobs in November

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FDA Approves Final Stage of MDMA Drug Trials

More than three decades after the Drug Enforcement Administration banned MDMA, federal regulators have approved research that could make the compound legally available as a psychotherapeutic catalyst by 2021. The New York Times reports that researchers studying MDMA as a treatment for posttraumatic stress disorder (PTSD) yesterday received permission from the Food and Drug Administration for Phase 3 clinical trials, the final step before approval of a new medicine.

The Multidisciplinary Association for Psychedelic Studies (MAPS), which is sponsoring the research, funded six Phase 2 studies involving a total of 130 subjects. Hundreds of subjects will participate in the next phase.

In one Phase 2 study, scores on the Clinician-Administered PTSD Scale fell by almost two-thirds, on average, among 19 subjects who underwent MDMA-assisted psychotherapy. A follow-up study found that the improvements generally persisted an average of almost four years later.

“It changed my life,” an Iraq and Afghanistan veteran who participated in one of the Phase 2 trials told the Times. “It allowed me to see my trauma without fear or hesitation and finally process things and move forward.” Another subject, a firefighter traumatized by “years of responding to gory accidents,” said MDMA-assisted psychotherapy “gave me my life back.”

The psychotherapeutic potential of MDMA, which enhances empathy, reduces fear, and encourages openness, was apparent back in the late 1970s and early ’80s, when the drug gained a following among psychiatrists. But once it was dubbed Ecstasy and became popular as a party drug, its fate was sealed. Like marijuana, LSD, and psilocybin, it has only recently re-emerged as a subject of legitimate medical research.

Reason TV covers the MAPS-sponsored MDMA research:

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RBS Tumbles After Failing BoE’s “Toughest Ever Stress Test”

While the term ‘stress test’ has been applied almost mockingly to European and US banks in an effort to create confidence for investors (because if the government sees risks ‘contained’ then why worry), this morning’s Bank of England stress test results highlighted “capital inadequacies” for three major UK banks. While Barclays and Standard Chartered fell short, it is taxpayer-owned Royal Bank of Scotland that is slumping on a need to cut costs, raise capital, and sell assets.

As Bloomberg reports, RBS has agreed to deepen cost cuts and sell additional assets to improve its resilience, the bank said in a separate statement.

Eight years after its 45.5 billion-pound ($56.6 billion) bailout from taxpayers, the Edinburgh-based lender still has work to do to bolster its financial strength. The test poses the latest setback in McEwan’s efforts to return the lender to profitability and full private ownership. The CEO has said he’ll unveil plans to further shrink the bank and reduce costs alongside full-year results next year.

“They have fallen short of the hurdles, and they have some more work to do,” Bank of England Deputy Governor Sam Woods said at a press conference in London. RBS’s new capital plan is “fully credible, the PRA board looked at that carefully and reached that conclusion as well. We’ll hold them to delivery.”

RBS is down over 12% from post-Trump euphoric highs, erasing all of the gains since the election

As Bloomberg reports, some “capital inadequacies” were revealed at two other banks, Barclays Plc and Standard Chartered Plc, though neither was required to submit a revised capital plan, the BOE’s Prudential Regulation Authority said on Wednesday.

So to sum up – 8 years after the financial crisis was ‘fixed’, with financial asset prices at record highs, 3 UK banks remain “undercapitalized,” but do not worry as The BOE’s Financial Policy Committee judged that no system-wide macroprudential action on bank capital was needed in response to the test.

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Mnuchin, Ross Confirm Trump Nominations On CNBC

Following yesterday’s press reports that Steve Mnuchin and Wilbur Ross would be selected for two of the top economic posts in Donald Trump’s administration, earlier today the two confirmed their nominations to lead the U.S. Treasury and Commerce Department, respectively. Mnuchin and Ross spoke on CNBC’s “Squawk Box.”

Steven Mnuchin made his comments on “Squawk Box,” as his selection was being announced. He said he believes the U.S. economy can grow at a sustained rate of 3 percent to 4 percent. Fair trade will also help boost the economy, Mnuchin said — sentiments echoed on CNBC by Trump’s choice for commerce secretary, Wilbur Ross. Mnuchin said tax reform is going to be a major driver of that growth, and added that the Trump administration is going to bring a lot of money back into the U.S. by cutting the corporate rate to 15 percent.

Ross said he aims to fix “dumb trade” deals, while getting rid of tariff barriers. The Dodd-Frank banking regulations are too complicated and a headwind to lending, said Mnuchin, a key Trump campaign figure and a Wall Street veteran with ties to Hollywood. Mnuchin said interest rates are likely to stay low for a few years, but the recent rise in bond yields make sense. “We’ll look at potentially extending maturity of the debt because eventually we’re going to have higher interest rates.”

Regarding the Fed, Mnuchin said that Fed Chair Janet Yellen has done a good job, said Mnuchin. Ross, a billionaire distressed asset investor, also said he thinks Yellen has done a “reasonably good job” under tough circumstances.

Mnuchin, 53, will be the second Goldman Sachs alumnus with a key role in the incoming administration, following Stephen Bannon’s nod as chief strategist and senior counselor. If confirmed by the Senate, Mnuchin would become the third former Goldman Sachs executive to head the Treasury Department since the mid-1990s.

With the Mnuchin and Ross selections, Trump’s economic team is taking shape. As Treasury chief, Mnuchin would be a crucial player in carrying out Trump’s campaign pledges to quickly tackle some of the nation’s most contentious political and economic issues. Those include overhauling the tax code, reconsidering a deal that lifted some sanctions on Iran, renegotiating trade agreements to help American manufacturers and designating China a currency manipulator.

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Frontrunning: November 30

Oil soars on OPEC hopes, dollar renews its surge (Reuters)
Oil Rallies on OPEC Optimism, Spurring Gains in Energy Producers (BBG)
Saudis say to take ‘big hit’ on oil output for OPEC deal, Iran can freeze (Reuters)
Leaner and meaner: U.S. shale greater threat to OPEC after oil price war (Reuters)
an the U.S. Become an Energy Superpower in 2017? (BBG)
RBS Fails Toughest-Ever BOE Stress Test, Boosts Capital Plan (RBS)
Romney heaps praise on Trump after dinner (Reuters)
Trump announces December 15 news conference to discuss leaving business (Reuters)
U.S. to Forgive at Least $108 Billion in Student Debt in Coming Years (WSJ)
Euro-Area Inflation Accelerates Before Key ECB Decision on QE (BBG)
GM’s Ready to Lose $9,000 a Pop Chasing the E-Car Boom (BBG)
Bank of England sees global financial risks after Trump victory (Reuters)
President Obama: ‘Michelle will never run for office’ (Rolling Stone)
Air France Workers Get Suspended Jail Terms in Torn-Shirt Case (WSJ)
Italy: The Next Stop on Populism’s Global March (WSJ)
Philip Morris CEO looks towards phasing out cigarettes (Reuters)
Manhattan Home Resellers Slow Deals With Dreams of 40% Returns (BBG)
CIA’s Brennan says tearing up Iran deal would be ‘folly’ (Reuters)

Overnight Media Digest

WSJ

– President-elect Donald Trump will name long-time banker and former Goldman Sachs executive Steven Mnuchin as Treasury secretary, turning to a campaign loyalist and fundraiser for the incoming administration’s top economic cabinet post, a transition official said Tuesday. http://on.wsj.com/2fK56fO

– Residents of Chapeco, Brazil, struggle with news that a plane crash has decimated their soccer team, Chapecoense, a scrappy bunch of no-names, who clawed their way into the top ranks of Brazilian soccer, and were preparing for the biggest match of their lives. http://on.wsj.com/2guv8oO

– At least three people died in the wildfires raging in Gatlinburg, Tenn., and at least 14 people were transported to hospitals with fire-related injuries, according to city officials. http://on.wsj.com/2fKcEPq

– Wilbur Ross Jr., who has been picked as the next commerce secretary, will be tasked with trying to bring home manufacturing jobs that have fled overseas, a key plank of President-elect Donald Trump’s trade agenda. http://on.wsj.com/2gId7mc

– Carrier Corp has agreed to keep in Indiana roughly half of the 2,100 jobs it had planned to shift to Mexico, after a lobbying effort from the incoming Trump administration. http://on.wsj.com/2fAD76W

– U.S. home prices have climbed back above the record reached more than a decade ago, bringing to a close the worst period for the housing market since the Great Depression and stoking optimism for a more sustainable expansion. http://on.wsj.com/2fHPZ6z

– Corporate profits continued to rebound in the third quarter alongside solid growth in the broader U.S. economy. Compared with a year earlier, after-tax profits rose 5.2 percent in the third quarter, the first annual increase since late 2014. http://on.wsj.com/2gEnAPE

– In tapping Rep. Tom Price and Medicaid consultant Seema Verma for top health positions, President-elect Donald Trump has signaled that he intends to put conservative health-policy goals at the forefront of his administration. http://on.wsj.com/2gGsH1Q

– Altice USA, the fourth largest U.S. cable operator, said it plans to convert its entire network into an ultrafast fiber-to-the-home network capable of 10 gigabits-per-second speeds within the next five years, a bold plan that takes aim at the company’s fierce rival, Verizon Communications Inc’s Fios. http://on.wsj.com/2gHlq34

Co-operative Energy has been chosen to supply customers of bankrupt GB Energy, British energy regulator Ofgem said. Ofgem said the company will honour all outstanding credit balances for present and past customers.

German industrial gases group Linde has received a fresh approach from U.S. rival Praxair for a merger of equals and its executive board is reviewing the proposal. The two parties abandoned talks in September to create a $60 billion-plus market leader after failing to agree on where important functions would be located and who would occupy key positions.

Sky Plc said it would enter the UK mobile market with a SIM-only deal that allows data allowances to roll over each month, and offers free calls to the 11 million British households that take its TV services. It was “time to shake up” the mobile market, particularly in data, where many customers paid for more than they used because they were worried about exceeding their allowance, the pay-TV group said on Tuesday.

Britain’s telecoms regulator will go to the European Commission to try to force BT Group Plc to legally separate Openreach, the division that supplies broadband to millions of homes and businesses, in a major reform aimed at spurring investment in the country’s ageing network.

South Korea said on Tuesday it plans to disallow sales of two Nissan Motor Co Ltd, one BMW AG and three Porsche AG car models after finding errors in certification documents for the car makers’ imported models.

NYT

– Steven Mnuchin, a financier with deep roots on Wall Street and in Hollywood, is expected to be named Donald Trump’s Treasury secretary as soon as Wednesday. http://nyti.ms/2gikMuK

– Uber, at the European Court of Justice, defended itself by asserting that it was helping to bolster Europe’s digital economy, in a long-awaited hearing to decide how the ride-hailing service should be able to operate across the region. Uber’s legal challenge in Europe represents a direct attack on how Uber operates in the region. http://nyti.ms/2giot3x

– President-elect Donald Trump proposed that Americans who protest government policies by burning the flag could lose their citizenship – meaning, among other things, their right to vote – as punishment. http://nyti.ms/2giounT

– Intel, Delphi Automotive and Mobileye plan to collaborate in an alliance in which Intel will provide specialized computer chips to Delphi, an auto supplier, and Mobileye, which specializes in vision systems that have been used in some of the autonomous-driving systems made by Tesla. Delphi and Mobileye would begin using the Core i7 Intel chip, and later would use a more powerful and unnamed processor to be unveiled in a few weeks. http://nyti.ms/2gipfgE

– – President-elect Donald Trump and Mike Pence, Indiana’s governor and the vice president-elect, plan to appear at Carrier’s Indianapolis factory on Thursday to announce a deal with the company to keep roughly 1,000 jobs in the state. http://nyti.ms/2gii1JF

– In a decision that will prompt showdowns with environmentalists, indigenous groups and some political allies, Canada’s Prime Minister Justin Trudeau approved the expansion of a pipeline linking the oil sands in Alberta to a tanker port in British Columbia. http://nyti.ms/2gijq2M

Canada

THE GLOBE AND MAIL

** The federal government has approved two major crude oil pipelines, including the controversial expansion of Kinder Morgan’s Trans Mountain line to Vancouver. Ottawa will also impose a moratorium on crude oil tankers off the northerly coast of British Columbia. (https://tgam.ca/2fCpGDB)

** Canadians have increasingly been spending more to visit Cuba as resorts switched pricing to U.S. dollars in preparation for a flood of American tourists. (https://tgam.ca/2fCoPCF)

** Executives from Air Miles parent company LoyaltyOne Inc, one of Canada’s largest loyalty program companies, went to Queen’s Park on Tuesday to state their objection to a bill that would deny them the right to have points in their programs expire in Ontario. (https://tgam.ca/2gIWjeH)

** Donald Trump is taking direct aim at Barack Obama’s legacy as he assembles an administration team bent on rolling back some of his signature reforms in health care, immigration and more. (https://tgam.ca/2fCcGOd)

NATIONAL POST

** Prime Minister Justin Trudeau announced approvals for two major export pipelines Tuesday, while dismissing a third pipeline and imposing a ban on oil tanker traffic on the northern section of British Columbia’s coast. (http://bit.ly/2gIZzqG)

** Amazon Inc remains tight-lipped about its plans to launch its video streaming service in Canada, but local players anticipate the deep-pocketed competitor will enter the market by the end of the week. (http://bit.ly/2gIUizr)

** Foreign home ownership levels have nudged their way up in Vancouver despite a tax brought in by the provincial government which adds an extra 15 percent to the purchase price for any overseas buyers. (http://bit.ly/2gIYejM)

Britain

The Times

* Polish Foreign Minister Witold Waszczykowski has cast doubt on Brexit ever happening, saying that Britain should stay in the European Union as long as possible. http://bit.ly/2gDKQkz

* German Chancellor Angela Merkel delivered a terse message to British Prime Minister Theresa May that she would not help Britain by agreeing on specific issues, even ones supported by Germany. http://bit.ly/2gDRves

The Guardian

* A mining company, Scotgold Resources Ltd, hoping to open the only underground goldmine in the Scottish Highlands has sold its first gold in the form of 11 commemorative coins. http://bit.ly/2fOpzU2

* British regulator Ofcom has chosen Co-operative Energy – a company that last month paid out 1.8 million pounds ($2.25 million) in compensation to customers – to take over the supply GB Energy’s gas and electricity customers. http://bit.ly/2gGQFeo

The Telegraph

* Motorists could see the price of foreign cars jump by 1,500 pounds if Britain fails to agree a deal on trade tariffs when it leaves the European Union, warned Gareth Jones, president of the Society of Motor Manufacturers and Traders. http://bit.ly/2gGrA36

* Sky Plc has launched its attack on the mobile market, hoping to convince millions of its pay-TV customers to defect from their current provider with the offer of unlimited free calls and texts. http://bit.ly/2fAv3Dp

Sky News

* Hauts-de-France, the northern part of France encompassing Calais and Lille, is calling on British businesses to consider using it as a foothold inside the European Union after Brexit. http://bit.ly/2fOBcdD

* One of Britain’s leading industrialists, George Buckley, has emerged as a surprise candidate to lead Tata, the giant Indian conglomerate that is among the UK’s largest inward investors. http://bit.ly/2gCzrkP

The Independent

* British regulator Ofcom says it will file plans to force BT Group to set the broadband infrastructure provider up as a legally separate entity with the European Commission as talks over a voluntary deal drag on. http://ind.pn/2gRIQpm

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Challenge Grant Time in the Reason Webathon! Because We Still Treat Presidential Politics as if (Bad) Ideas Matter

#NeverForget ||| Jerry Lewis Telethon We are here on the second day of Reason’s annual Webathon, in which we ask you, the people who fight in the comments over which staffer to fire first, to nonetheless throw some tax-deductible money our way so that we can bring you even more in journalism and commentary defending and extending Free Minds and Free Markets.

Please donate right the Fletch now to get us closer to our $250,000 goal!

As of around 7:30 this morning, 151 of you generous human-bots had gifted us around $23,000, or 9.2% of the goal at the halfway point of the first quarter of the Webathon. Now, while we treasure each and every dollar and Bitcoin and Bubble-world Sandersback, we’re basically still at our own 10-yard line (and even then with a generous spot!), at a time when we really should be around, oh, the 13. WE NEED A TOUCHDOWN, IS WHAT I AM SAYING….Oh wait, what are those footsteps I hear coming from the runway leading from the locker room, clanking closer and closer, a modern-day Tom Jarrett here to inhabit our mortal bodies and finally lead my Youngblood-era L.A. Rams to the Super Bowl? Why it’s a $25,000 CHALLENGE GRANT!

Gillespie could still throw a mean spiral back in '78. ||| Paramount Pictures That’s right, ladies and gents and less classifiable creatures, the beloved Reason donor (and Trustee) Kerry Welsh (no relation) and his even lovelier wife, Helen Welsh, have announced a $25,000 challenge grant here to kick off Day Two. What does such magick mean for us non-math majors? That the next $25,000 in donations, IF AND WHEN IT COMES, will be literally doubled. It’s like a government-spending multiplier, only not totally fake!

So why double your giving pleasure? Today, in singing for my supper, I’m going to jump head-first into a hornet’s nest of a coverage category: politics (ducks away from flying shoe).

Like all zero-sum scrums, politics is intrinsically divisive, including/especially amongst quarrelsome libertarians. And like all taxation-based entities, government is inherently confiscatory and brutish. This is why Reason magazine has spent 48-plus years on this earth trying to roll back the influence of both factors in our lives, while celebrating the wonders conjured far from their grasp. As Katherine Mangu-Ward put it in her very first (and very great!) column as editor in chief, it’s “Trump vs. Clinton vs. Everything Good.”

We cover politics for two main reasons, and from two main angles: 1) As an act of defense against policies that that harm human liberty and flourishing, and 2) as an attempt to smuggle into the very diverting (particularly this year!) yet largely calorie-free National Conversation about politics some ideas that help us out with Task #1. Because even if any given political competition isn’t necessarily determined by the quality of policy proposals, the discussion generated by campaigns does end up translating into government action—maybe in the future, with different politicians, in far-flung jurisdictions. The collective exertion of power always affects the lives of individual humans, and, well, you know which side we’re on.

Bern baby Bern! ||| Reason Here’s how such a 1-2 approach works in practice. Remember when Hillary Clinton was having her heels nipped repeatedly by the unlikely longshot Bernie Sanders, whom some libertarians were going a bit wobbly for (which our work directly helped talk them out of)? At the zenith of the Democratic competition our mag published a special package on the cantankerous Vermont democratic socialist that delved into his past and his popularity, concluding in sadness more than anger that what was animating his would-be revolution and sending shivers down Clinton’s pantsuit wasn’t the promising civil liberties/foreign policy part of his issue-set, but rather his genuinely terrible economic policies. Look around you at any blue state or big, progressive city, and you will see these Bernieite Fights for $15 playing out all around you. In like 340 cities just yesterday, for example.

So renowned classical liberal author and known Swede Johan Norberg wrote for this issue a terrific essay, titled “Bernie’s Right—America Should Be More Like Sweden,” that in a fell swoop dismantled for all time the lazy American-left love affair with Scandinavian economics of which it knows next to nothing. My favorite Norbergian tidbit: “[W]hen President Barack Obama visited Sweden in 2013, the three big Swedish trade unions sent him a letter requesting a meeting. Their agenda: a discussion of ‘how to promote free trade.’ The chairman of the largest Social Democratic trade union scolded the American president for his insufficient commitment to the free flow of goods.” In the same edition I had a piece on “Bernie’s Bad Ideas,” limiting myself to just 10 of his economic howlers. Both articles drew more than 100,000 page views, a kind of reach almost unheard of back when we first started these Webathon thingies, but now fairly routine (for instance, we’ve cleared that hurdle at least seven times already this month).

Bernie’s eventual vanquisher, alas, lacked even his leavening civil liberties component and endearing ear-hair. We published cover stories on Hillary Clinton’s long and woefully undercovered war on free speech, treated seriously her unrepentant warmongery, documented her open hostility to the sharing economy and public school reform, reminded readers of her awful track record on guns and drugs, and pointed out in careful detail her habit of saying knowingly untrue things in relation to her willfully obfuscatory email management system. Within hours of FBI Director James Comey’s remarkable press conference, Reason TV’s Austin Bragg issued forth this damning video laying bare Clinton’s disproven lies. It was viewed more than 650,000 times on YouTube, and more than 13 million times on Facebook:

There is a handy if not always safe-for-polite-society phrase deployed by the Reason commentariat that goes a little something like this: “No, fuck you, cut spending.” One of our consistent critiques of the new president-elect, and the new flavor of politics he’s adding to the mix, is that he has untethered conservatism from fiscal sanity even more explicitly than Mitt Romney and George W. Bush before him. In my October cover story “Debt Denialists,” after laying out how Democrats under President Barack Obama went from promising to reform entitlements to campaigning on expanding them, I turned my attention to the Republican who won his primary in part by promising to “save your Social Security…and your Medicare,” and running to the left of Hillary Clinton on trade:

Trump walked back [his promise to cut the debt] three weeks later, largely on the grounds that the federal government has some big-ticket spending items to accomplish, in addition to fulfilling his promises to protect entitlements. “I’d rather not be so aggressive,” he told Fortune. “Don’t forget: We have to rebuild the infrastructure of our country. We have to rebuild our military, which is being decimated by bad decisions. We have to do a lot of things.” In August, he unveiled a plan to outspend even Hillary Clinton on infrastructure, throwing a half-trillion dollars at rebuilding bridges and highways and so forth. […]

On July 27, the independent, bipartisan Committee for a Responsible Federal Budget estimated that under Trump’s announced plans thus far, the national debt would double over the next decade to $39.5 trillion. As Peter Suderman has observed at reason.com, the Republican nominee’s “proposed Social Security reform would attempt to cover a $150 billion fiscal gap by cutting waste, fraud, and abuse—which only amounts to about $3 billion. Trump has also suggested that the government could save $300 billion through savings in a program that only spends $78 billion. It’s total nonsense.”

While Trump’s unique campaigning style presents equally unique challenges to political and policy journalists in distinguishing literal from serious, realignment from pendulum swing, and our own personal/professional mores from those of the electorate, he has already shown an ability to jerk a rudderless GOP even further in his direction on such freedom-impacting issues as immigration and trade, and is weeks away from wielding all that delicious executive power that his two predecessors aggrandized. So when he tweets such intentionally distracting, constitutional non-starters as revoking the citizenship of flag-burners, we will more or less live by this Popehat motto—”Prudence requires us to put Trumpisms in perspective; it shouldn’t prevent us from continuing to articulate our core values and talk about the things that are important to us”—and then get on with the business of discussing in knowledgeable detail how his proposed policies and personnel may actually affect us in the real world.

It's all over, Mr. Garrison. ||| Reason In a political atmosphere that looks to be suffused in semi-permanent hysteria, you can count on Reason under Trump to simultaneously play defense against any hints of authoritarianism, while being open to and even encouraging about the very real possibility that he could be the most deregulatory U.S. president in decades. Check out our coverage on his intriguing picks for the Departments of Education and Health and Human Services, as well as his less inspired choices for Attorney General and CIA director, for the basic template going forward.

Look, it’s politics, so people (including us!) can get emotional about things sometimes. But unlike just about every other media outlet except three, we wear our political preferences on our sleeves, and labor always to keep near our frontal lobes both your idiosyncratic coverage desires—and we’ll get to some of those later in the Webathon—and the end goal of advancing the free society.

Now, speaking of end goals, CHALLENGE GRANT! DONATE TO REASON RIGHT THE HELL NOW.

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Bank Of England Warn Of “Challenging” Outlook For Britain’s Financial System

Ulster Bank Parent RBS Fails Bank of England Stress Test

“Royal Bank of Scotland (RBS)(RBS.L) will cut costs and sell assets to boost capital levels, it said on Wednesday after failing this year’s Bank of England stress test, which warned of a “challenging” outlook for Britain’s financial system.

The state-backed lender rushed out a statement following the announcement to say it would take a range of actions, including selling off bad loans and cutting costs to make up the capital shortfall identified by the tests of around 2 billion pounds.

The unexpected result underlines the litany of problems RBS is grappling with, which include a mounting legal bill for misconduct ahead of the 2008 financial crisis and difficulties selling off assets such as its Williams & Glyn banking business.

The lender said it had agreed a plan of action with the Prudential Regulation Authority, the Bank of England’s enforcement arm, that should mean it does not have to tap markets to raise the money needed.”
From Reuters

We warned of the RBS, Ulster Bank ‘£100 Billion Black Hole’ and the bail-in risk due to the ‘danger of failing’ in June 2014 here

Bail-ins can now be used in the UK, EU, U.S. and G20 countries. Banks internationally and especially in Europe remain vulnerable.

After Cyprus, which country will be the next to suffer bail-ins? Will RBS and by extension Ulster Bank, be the first UK and Irish banks to be subject to bail-ins?

Download Guide Here

Gold and Silver Bullion – News and Commentary

Gold prices firm as markets brace for OPEC meeting (Reuters.com)

Trump to tap ex-Goldman Sachs banker Steven Mnuchin as Treasury secretary (MarketWatch.com)

Trump to name Wilbur Ross as commerce secretary (MarketWatch.com)

Gold prices register third decline in 4 sessions (MarketWatch.com)

Trump is meeting with an ex-bank CEO who wants to abolish the Federal Reserve and return to the gold standard (BusinessInsider.com)

War on Cash and Gold In India to Benefit Silver? (TheConversation.com)

Trump Considers Strong Gold Standard Advocate for Treasury Secretary (AveryBGoodMan.com)

Italy Seen More Likely To Exit Eurozone Than Greece; Italian Bond Yields Surge (ZeroHedge.com)

What Investors Can Learn From Gold Priced In Yen? (Gold-Eagle.com)

Palladium: Signals of Market Supply Shortage (SafeHaven.com)

Gold Prices (LBMA AM)

30 Nov: USD 1,187.40, GBP 952.06 & EUR 1,115.44 per ounce
29 Nov: USD 1,187.30, GBP 952.45 & EUR 1,119.98 per ounce
28 Nov: USD 1,189.10, GBP 956.51 & EUR 1,117.99 per ounce
25 Nov: USD 1,187.50, GBP 953.30 & EUR 1,121.83 per ounce
24 Nov: USD 1,187.25, GBP 953.60 & EUR 1,125.04 per ounce
23 Nov: USD 1,213.25, GBP 980.00 & EUR 1,143.00 per ounce
22 Nov: USD 1,217.55, GBP 978.91 & EUR 1,144.98 per ounce

Silver Prices (LBMA)

30 Nov: USD 16.67, GBP 13.39 & EUR 15.66 per ounce
29 Nov: USD 16.54, GBP 13.26 & EUR 15.61 per ounce
28 Nov: USD 16.68, GBP 13.45 & EUR 15.73 per ounce
25 Nov: USD 16.47, GBP 13.21 & EUR 15.55 per ounce
24 Nov: USD 16.31, GBP 13.09 & EUR 15.43 per ounce
23 Nov: USD 16.56, GBP 13.36 & EUR 15.59 per ounce
22 Nov: USD 16.76, GBP 13.46 & EUR 15.77 per ounce

Recent Market Updates

– Peak Silver – Supply Deficits Mean Higher Prices
– Bail In Risk – €4 Trillion Banking System In Italy Poses Contagion Risk as Referendum Looms
– Gold Down 13.5% In 13 Days – Trump Bearish For Gold?
– War On Cash Just Got Real – India and Citibank In Australia
– Russia Gold Buying In October Is Biggest Monthly Allocation Since 1998
– Stocks, Bonds, Pension Funds “Will Be Wiped Out…” – Rickards
– Physical Gold Is A “Long-Term Position” as “Hedge Against Governments”
– Gold Sell Off On Fed Noise – “Interesting Times” To “Support Gold”
– Islamic Gold – Vital New Dynamic In Physical Gold Market
– Peak Gold Globally – “Bullish For Gold”
– Gold Price Should Go Higher On Global Risks and Trump – Capital Economics
– President Trump – Why Market Loves Him and Experts Wrong
– ‘Helicopter Money President’ Trump To Create Inflation and Gold Will Rise

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This Short Squeeze in the Oil Market Could Go On For Days! (Video)

By EconMatters

OPEC did such a good job of putting many oil traders on the wrong side of the market for the last month, this short squeeze could go for a while. There is a lot of money positioned in the oil market for the deal not getting done!

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Saudis Said To Take “Big Hit” On Output As OPEC “Close” To Condition Deal Involving Russia

Oil continued to rise higher, now over 7% sending Brent above $50 for the first time since October, after Saudi Energy Minister Khalid al-Falih said on Wednesday OPEC was close to clinching a deal to limit oil output, adding Riyadh was prepared to accept “a big hit” on its own production and agree to arch-rival Iran freezing output at pre-sanctions levels. The comments was interpreted as a compromise by the Saudis who in recent weeks insisted that Iran fully participate in any cut.

OPEC was said to be “close” to reaching a deal to cut supply by 1.4 mmbpd, assisted by a 600kbpd cut coming from non-OPEC nations. However, as Reuters adds, if such a deal is agreed it would be conditional on non-OPEC involvement as OPEC would need non-OPEC members, such as Russia to agree to the 600kbpd and may require another meeting as early as December.

This may be problematic as according to a Bloomberg headline blast, Russia would be willing to consider a 200kbpd cut if there is an OPEC deal, less than the 400kbpd number floated earlier by an OPEC “source”, suggesting that any subsequent meeting may once again prove “problematic.”

Furthermore, assuming OPEC does agree to a 1.4mmbpd production cut, it is still unclear how it will be achieved and if indeed, the Saudis will be forced the bulk of the production cut.

While the details so far remain unclear, Falih also said that OPEC was focusing on reducing output to a ceiling of 32.5 million barrels per day, or cutting by more than 1 million bpd, and hoped Russia and other non-OPEC members would contribute a cut of another 0.6 million bpd.

“It will mean that we (Saudi) take a big cut and a big hit from our current production and from our forecast for 2017. So we will not do it unless we make sure that there is consensus and an agreement to meet all of the principles,” Falih said.

Hedging in case no deal were to emerge, the Saudi said that even if OPEC failed to reach a deal, the market would slowly recover: “We believe that non-OPEC growth has reversed and also most of the OPEC growth we’ve seen is already behind us,” he told reporters. “If we can’t come to an agreement, then the other scenario of rolling over and waiting for the market to recover on its own is not a bad outcome.”

As previously reported, yesterday Iran wrote to OPEC saying it wanted Saudi Arabia to cut production by as much as 1 million bpd, more than Riyadh was willing to offer. However the tone changed on Wednesday. “I’m optimistic,” said Iranian Oil Minister Bijan Zanganeh, adding there had been no request for Iran to cut output. He also said Russia was ready to reduce output.

“Moscow have agreed to reduce their production and cut after our decision,” Zanganeh said, although even that statement remains in question as it is unclear just how much Russia would cut with Iran floating a number of 400kbps, which has since been reduced to 200kbpd by the Russian energy minister.

A likely outcome, then, is that OPEC will announce a 1.4mmpd conditional cut, and will also announce a subsequent meeting when a pledge to cut by Russia will also have to be ratified. Meanwhile, US shale companies are already preparing to pump more courtesy of today’s oil surge even as global demand – most notably out of China – continues to decline.

Finally, there is the question of deal compliance and just who within OPEC will monitor the other members to keep within the agreed upon production quotas: considering everyone in the cartel has a conflict of interest to keep prices as high as possible by representing as low an output as possible, this too will be, well, problematic.

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