Month: December 2018

The Pentagon has announced US forces in Eastern Syria have killed a key ISIS leader responsible for beheading an American aid worker and former Army Ranger. 

“Earlier today, coalition air forces conducted precision strikes against a number of ISIS leaders in southeast Syria. Those targeted included Abu al-Umarayn,” anti-ISIL special presidential envoy Brett McGurk said in a statement late on Sunday. A Pentagon spokesman further confirmed, “Al Umarayn had given indications of posing an imminent threat to coalition forces and he was involved in the killing of American citizen and former US Army Ranger, Peter Kassig.”

In 2014 Abu al-Umarayn had overseen several executions of westerners captured in Syria, including American aid worker Peter Kassig, who was shown in a “Jihadi John” (or Mohammed Emwazi) execution video. Unlike other ISIS and al-Qaeda execution videos, the beheading itself wasn’t filmed, just the aftermath which included a masked Jihadi John standing over a severed head saying, “This is Peter Edward Kassig, a US citizen.”

Kassig had been abducted on his way to the Syrian city of Deir al-Zor on October 1, 2013 while part of a humanitarian group he founded which sought to supply food and supplies to internally displaced Syrians. He had entered Syria at a time when the western press had romanticized the “rebels” (the FSA in particular) as “freedom fighters” yet who in reality were cooperating with ISIS, resulting in a number of high profile kidnappings of western aid workers and reporters. 

Umarayn was considered a senior ISIS official still organizing operations even as ISIS has gone largely underground with the rapid advance of Syrian and Russian forces across the country. 

The Pentagon further said the airstrikes in eastern Syria killed “several other ISIS members” — something which the Syrian government is now disputing, as also on Sunday state-run SANA news reported US coalition jets fired “several missiles” targeting Syrian Army positions in  in the eastern Homs countryside south of al-Sekhneh, causing “material damage” but no deaths or injuries, according to the report. 

Syrian media stated the following: 

The US-led “International Coalition” launched a new aggression against positions of the Syrian Arab Army in Homs eastern countryside in support of the terrorist organizations, on top of Daesh (ISIS) which is a tool to implement its schemes in the region.

Both Syria and Russia have long accused the American military presence in eastern Syria — which now standings at multiple thousands of troops and support personnel occupying a region the size of Croatia — of protecting remnant ISIS pockets instead of rooting them out. This, say Syrian and Russian sources, is to continue to fuel a jihadi insurgency against Damascus and Iranian allies as a proxy force and buffer. 

The Pentagon denied the Syrian government charge that its operations were in support of ISIS and not aimed at rooting out the terror organization.

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Long-suffering European auto stocks ripped higher on Monday as they headed for their best session in over two years following a late night tweet from President Trump claiming that China had agreed to lower its punishing 40% tariff on US-made cars. Ironically, shares of German companies like Daimler and BMW outperformed US auto stocks because many of the cars they export to China are manufactured in the US.

“China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%,” Trump said.

China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.

— Donald J. Trump (@realDonaldTrump) December 3, 2018

Adding some confusion to the president’s claim, a top Chinese trade official declined to comment on the Trump tweet during a morning press conference, which failed to dent the upward momentum. Trump tweeted after China and the US agreed to a “temporary” 90-day trade truce where China agreed to buy more US agricultural products to try and help narrow its trade surplus with the US while Trump agreed to suspend a planned increase and expansion for US tariffs.

Beijing raised tariffs on U.S. auto imports to 40% in July, forcing many carmakers to hike prices in a major hit to the roughly $10 billion worth of passenger vehicles the United States sent to China last year. Last week, China called for a “negotiated solution” to the trade standoff, saying its tariffs on US-made cars would be only 15% if not for the trade spat (Chinese policy makers earlier this year had agreed to lower tariffs on US cars before the trade war erupted in the spring).

As Bloomberg pointed out, a reduction in Chinese tariffs would benefit Daimler and BMW more than US carmakers like General Motors and Ford, as the German luxury brands dominate the top 10 list of car imports to China.

Meanwhile, Chinese carmaker shares pared their gains, while shares of Chinese car dealerships climbed, as the threat of increased competition weighed on carmakers’ shares.

Elsewhere, Angela Merkel said around midday in Europe that a planned meeting between Germany auto company leaders and Trump on Tuesday wouldn’t focus on tariffs which probably means that the only thing they will take about is, you got it, tariffs.

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The Grinch may have stolen Thanksgiving profits, but Christmas came early for markets with world stocks rising over one percent and pushing emerging currencies higher against the dollar, as S&P futures jumped as much as 2%…

… and the Shanghai Composite soared 2.9% after the U.S. and China agreed to halt new tariffs for 90 days. Commodities spiked and the dollar rebounded from session lows. The MSCI’s all-country world index rose 0.9% in its sixth straight day of gains and hit its highest level since Nov. 9 while emerging equities rose 2.1% and were set for their strongest day in a month.

The gains came after China and the United States agreed during a Saturday dinner at the G-20 in Argentina to halt additional tariffs on each other. The deal prevents their trade war escalating as the two sides try to bridge differences with fresh talks aimed at reaching a deal within 90 days. If no deal is reached, Trump warned that the US will resume escalation, and hike tariffs to 25% from 10%.

“We have a deal. That’s wonderful news for global financial markets and signaling the start for a year-end rally in risky assets,” said Bernd Berg global macro strategist at Woodman Asset Management. “We are going to see a rally in emerging market and U.S equities, EM currencies and China-related assets like Australia. I expect the rally to last until year-end.”

Oil soared 4% higher after dipping below $50 briefly last Friday, jolted by efforts across the globe to support prices as Saudi Arabia and Russia extended their pact to keep production low (although without providing details ahead of this week’s OPEC+ meeting, while Canada’s largest producing province ordered unprecedented supply cuts. Optimism was dented slightly after Qatar said it was quitting OPEC, just as the group prepares to meet this week.

The risk-on mood initially drove the U.S. dollar as much as 0.4% lower against a basket of currencies before trimming some losses. The greenback was already under some pressure from the recent shift in the Fed’s policy communication to a slightly more dovish stance. Comments by Federal Reserve Chair Jerome Powell were interpreted by markets as hinting at a slower pace of rate hikes.

Emerging currencies were among the main beneficiaries of dollar weakness, with an MSCI index up 0.6 percent. It was led by China’s yuan which rose one percent for its biggest daily gain since Feb. 2016.

The euro pared a gain after data showing manufacturing activity slowed, with factory growth stumbling again in November, as business confidence remains the weakest in 6 years.

“Such positive sentiment won’t fade very soon … (the 90-day) period is not short, it’s long enough to soothe market sentiment,”  trader at a foreign bank in Shanghai told Reuters.

Powell was scheduled to testify on Wednesday to a congressional Joint Economic Committee but his hearing is expected to be postponed to Thursday because major exchanges will be closed on Wednesday in honor of former U.S. President George H.W. Bush, who died on Saturday.

While some have speculated that the trade war truce would bring back more hikes on the table, others disagreed: Florian Hense, economist at Berenberg, said the market rally would not bring a return to a more hawkish Fed stance. “We would need to see some rebound in economic activity to lift expectations of more rate hikes,” he said.

Maybe not: in a Bloomberg TV interview, Fed Vice Chairman Richard Clarida said the US economy is in “good shape” and the outlook is “very solid” as the central bank is focused on meeting its dual mandate. He added that the concept of a “Powell Put” isn’t a useful concept, noting that the Fed could operate somewhat above 2% inflation goal.

More importantly, Clarida said that the dot plot of Fed interest-rate forecasts “is not going anywhere”, though it may evolve.

Back to markets, where Asian shares kicked off the gains, with Chinese mainland markets rising more than 2.5% while Japan’s Nikkei gained as much as 1.3% to a six-week high.

Miners and automakers led gains in the Stoxx Europe 600 Index after President Donald Trump said in a late-night tweet that China agreed to “reduce and remove” tariffs on imported American-made cars.  The tweet sent the Dax 2.5% higher as auto stocks were set for best day in 2-1/2 yrs on Sino-US trade truce. Just before midnight on Sunday, Trump tweeted that China had agreed to remove car import tariffs, even though in a briefing in Beijing a few hours later, China’s foreign ministry spokesman Geng Shuang declined to comment on any car tariff changes.

China has agreed to reduce and remove tariffs on cars coming into China from the U.S. Currently the tariff is 40%.

— Donald J. Trump (@realDonaldTrump) December 3, 2018

Trump gave no other details in his late-night tweet, which came shortly after he agreed with Xi to a truce in the trade war during a meeting at the Group of 20 summit in Argentina.  Shares of German carmakers Daimler AG and BMW AG rallied Monday morning after the U.S. trade deal with China. Trump’s comments, if ratified, would also hand automakers like Tesla a potential reprieve after higher levies hit sales in the world’s biggest car market.

China said last week that tariffs on U.S. autos would be 15 percent if not for the trade dispute, and it called for a negotiated solution. Chinese officials discussed the possibility of lowering tariffs on U.S. car imports before Xi met Trump in Argentina, according to Bloomberg, but the magnitude and timing of such a reduction were unclear, the person said.

In EMs, South Africa’s stock market was on course for its best day in four years, while Russian stocks climbed with the ruble as oil-production curbs spurred the biggest jump in Brent crude in two years. The peso advanced after a report that the new government was ready to re-purchase bonds issued to build Mexico’s City new airport

Meanwhile, in rates, ten-year Treasury yields rose back above 3 percent; the Australian curve bear steepens with 10-year yield three basis points firmer. Mexican peso rallies 1.3%, rand 1.1% stronger; won rose to its strongest since October.  Germany’s 10-year government bond, the benchmark for the euro area, was set for its biggest one-day yield jump in a month, rising four basis points to a high of 0.347%. Yields on riskier southern European bonds fell across the board, with Italian yields sliding as much as 10 bps to new two-month lows.

As noted above, WTI (+4.1%) and Brent (+3.9%) were both stronger following the positive US-China trade news and reports that Russia and Saudi Arabia are agreeing to extend the OPEC+ agreement; although no production cut figure has been announced so far. Additionally, Qatar, which produces approximately 600,000 BPD of oil, has announced that they are withdrawing from OPEC as of January with this being in-line with their long-term plan. Separately, Canada’s Alberta province is to reportedly mandate a 9% oil output reduction, which amounts to 325,000 BPD, in order to ease a supply glut with this to come into effect from January.

Gold (+0.7%) was firmer, albeit off of a 3-week high of USD 1232.30/oz reached earlier in the session; after gaining support from the dollar being weighed on by positive US-China trade news from the G20 summit. Steel and copper prices have also benefited from the positive trade news, with Chinese rebar steel increasing by its 7% exchange-set trading; with copper’s London benchmark prices nearing a two-month high. Elsewhere in commodities, Chicago soybeans rally as much as 3.2%. Base metals gain with LME copper up 2%; Dalian iron ore 3.4% stronger.

In other news, Italian PM Conte stated they are examining several options for a budget deal with the EU in which a solution could be made within days. Later it was reported, that Italian PM Conte is reportedly preparing for a deficit of 1.9%-2.0%, while Italian Deputy PMs Salvini and Di Maio are said to be ready to accept new target, according to Messaggero.  Italy’s Deputy PM Salvini says that the EU cannot ask for a 1.9% target.

In the latest Brexit developments, UK PM May was reportedly under renewed pressure as the DUP threatened to abandon support for her in a confidence vote if she failed to get her Brexit deal approved in Parliament. May’s chief Brexit adviser Oliver Robbins secretly warned her the PM that customs backstop is a “bad outcome” for the UK which will see regulatory checks in the Irish Sea and put security co-operation at risk, according to the Telegraph. UK Secretary of State for Environment, Food and Rural Affairs Gove, has told Conservative rebels that there was a “real risk” of a second Brexit referendum if they don’t back PM May’s deal with Brussels.

In geopolitical news, South Korean President Moon and US President Trump agreed to revive momentum regarding negotiations for North Korea denuclearization. In related news, South Korean President Moon said a visit by North Korean Leader Kim to Seoul is still open and possible this year, while US President Trump is said to be targeting a summit with North Korean leader early 2019.

Expected data include manufacturing PMI and construction spending. Finisar, Coupa Software, RH and Smartsheet are among companies reporting earnings.

Market Snapshot

• S&P 500 futures up 1.7% to 2,805.50
• STOXX Europe 600 up 1.8% to 363.80
• MXAP up 1.9% to 156.55
• MXAPJ up 2.3% to 502.97
• Nikkei up 1% to 22,574.76
• Topix up 1.3% to 1,689.05
• Hang Seng Index up 2.6% to 27,182.04
• Shanghai Composite up 2.6% to 2,654.80
• Sensex up 0.05% to 36,210.60
• Australia S&P/ASX 200 up 1.8% to 5,771.16
• Kospi up 1.7% to 2,131.93
• Brent futures up 5.3% to $61.79/bbl
• Gold spot up 0.8% to $1,230.66
• U.S. Dollar Index down 0.5% to 96.84
• German 10Y yield rose 1.1 bps to 0.324%
• Euro up 0.4% to $1.1362
• Italian 10Y yield rose 0.9 bps to 2.846%
• Spanish 10Y yield fell 1.1 bps to 1.491%

Top Overnight News

• U.S. President Donald Trump said China has agreed to “reduce and remove” tariffs on American cars from 40 percent currently. He gave no other details in the late-night tweet, which came shortly after he agreed with President Xi Jinping to halt the imposition of new tariffs for 90 days as the world’s two largest economies negotiate a lasting agreement. In a briefing in Beijing a few hours later, China’s foreign ministry spokesman Geng Shuang declined to comment on any car tariff changes
• Oil rebounded from the biggest monthly loss in a decade after Russia and Saudi Arabia agreed to extend their deal to manage the crude market into 2019 and Canada’s largest producing province ordered an unprecedented output cut
• Leaders of the world’s largest economies agreed the global system of rules that’s underpinned trade for decades is flawed, in a post-summit statement Saturday that the White House quickly claimed as a win for Donald Trump’s protectionist agenda
• U.K. Prime Minister Theresa May faces yet another grueling battle this week as members of Parliament sink their teeth into her Brexit deal ahead of a crucial vote. On Monday, politicians on all sides will ratchet up the pressure on May to justify the terms she’s agreed to with the European Union by demanding she publish the government’s internal legal advice underpinning the accord
• France’s “Yellow Vest” anti-government demonstrations intensified Saturday. More than 400 people were arrested and at least 133 injured after rioters in Paris burned cars, looted stores and restaurants, and sprayed graffiti on the Arc de Triomphe. Emmanuel Macron convened an emergency cabinet meeting amid demands to alter his environmental and budget policies
• As the Brexit deadline approaches, about 50 banks and other financial institutions are having or have had talks with the Dutch central bank about setting up shop in the Netherlands
• The compromise to safeguard the euro is set to underwhelm supporters of the sweeping vision of an integrated and assertive Europe set out by French President Emmanuel Macron last year as the banking union, bailout plans and euro budget are all bogged down

Asian equity markets were higher across the board with global risk appetite boosted following the US-China trade truce at the G20. News of the tariff ceasefire spurred a rally in US equity futures in which the Emini S&P and DJIA futures reclaimed the 2800 and 26000 levels respectively, with the blue-chip index up nearly 500 points. ASX 200 (+1.8%) and Nikkei 225 (+1.1%) advanced with Australia led by commodity-related sectors as energy benefitted from the positive trade developments and Russia-Saudi agreement to extend the OPEC+ accord, while the JPY-risk dynamic was very much in play for Tokyo trade. Elsewhere, Hang Seng (+2.4%) and Shanghai Comp. (+2.6%) outperformed on the easing of trade tensions, with sentiment also supported by better than expected Chinese Caixin Manufacturing PMI and after the CFFEX relaxed domestic stock index futures trading conditions. Finally, 10yr JGBs initially saw a bout of weakness at the open amid the heightened risk appetite, although prices later recovered amid the BoJ’s presence in the market for JPY 800bln of JGBs with maturities of up to 5yrs.

Top Asian News

• Trump’s Auto Tariff Tweet Boosts Stocks, Leaves Beijing Silent
• Goldman Sachs-Funded Group Bids A$2.4 Billion for GrainCorp
• Macau Casinos Rise as J.P. Morgan Calls November Beat Impressive
• Saudi Prince Finds Both Friends and Disapproval at G-20 Summit
• India Is Said to Seek Seizure of IL&FS Officials’ Properties

European equities (Eurostoxx 50 +1.8%) trade with firm gains as markets react to the fallout of the G20 summit which saw US President Trump and Chinese President Xi Jinping agree to delay hiking tariffs on USD 200bln of Chinese goods to 25% for 90 days  to allow for trade discussions between the two nations. In terms of sector specifics, mining names have been the main beneficiary  from the trade optimism thus far with price action in metals markets giving a lift to Antofagasta (+8.0%), Arcelormittal (+6.6%),  Anglo American (+6.3%), Glenore (+6.5%) and many more. Elsewhere, luxury names are also seeing some reprieve from the US-China developments with the sector previously hampered by tensions between the two nations; as such, Swatch (+6.1%), Kering (+5.5%), LVMH (+4.3%) and Burberry (+3.3%) all trade with firm gains. Auto names are also seen higher amid the spillover from US President Trump tweeting that China has agreed to reduce and remove tariffs on cars coming into China from the US which are currently at 40%; BMW (+6.1%), Daimler (+6.2%), Volkswagen (+3.9%). Finally, tech names have also been supported by the weekend’s developments with tech a key focus for negotiations, subsequently, STMicroelectronics (+7.3%), Infineon (+5.8%) and Wirecard (+4.4%) are also near the top of the Stoxx 600 leaderboard.

Top European News

• U.K. Manufacturing Growth Recovers From 27-Month Low in November
• Spanish Establishment Suffers Another Fracture in Andalusia
• Sewing’s Options Dwindle as Fresh Scandals Hit Deutsche Bank
• Albert Frere, Belgian Billionaire Investor, Dies at 92
• $80 Billion Locked in a ‘Golden Cage’ in Austria May Be Set Free

FX: DXY, CNY, JPY – An optimistic end to the G20 summit with Trump and Xi agreeing on a 90-day tariffs ceasefire until a trade deal can be negotiated (with sticking points such as IP remaining). As such DXY fell to lows of 96.710 vs. last week’s low of 96.622, though the index is nursing losses in an attempt to take another jab at 97.000. USD/CNY fell below the key 6.90 level despite a higher USD/CNY fix by the PBOC overnight, while JPY unwound some risk premium with USD/JPY stopping just shy of 114.00, but the headline pair supported just ahead of a downside tech-level (Tenken at 113.34).

• AUD, NZD, CAD – Major high-beta beneficiaries in the aftermath of the G20, with AUD/USD within striking distance of 0.7400 (where 1.365bln in option expiries lie) ahead of its 200DMA at 0.7418, while the Kiwi holds above 0.6900, marginally hampered by weaker than expected Q3 terms of trade and softer export volumes. Meanwhile, CAD also takes advantage of the rising oil prices after Russia and KSA extended their OPEC+ pact, on top of the tactical 325k BPD production cut at Canada’s Alberta refinery. USD/CAD currently sub-1.3200 but off post-G20 lows of 1.3160.
• GBP, EUR – Little reaction in the pound and the single currency following mixed manufacturing PMIs with Cable back down below 1.2750 (after having breached its 10DMA at 1.2800 where stops were reportedly tripped) and through the Raab-low at 1.2724 to test bids ahead of 1.2700, while EUR/USD couldn’t sustain gains to 1.1400 before retreating through 1.1350 and towards 1.1300. Note, the single currency was supported earlier on Italian press reports that PM Conte is said to be preparing for a deficit/GDP target in the range of 1.9%-2.0%, with the Deputy PMs apparently ready to accept the new target but has eased back in wake of the ECB’s announcement of Capital Key changes, including a perhaps surprisingly lower Italian ratio. In terms of option expiries, EUR/USD sees 1.32bln around 1.1380-90 ahead of reported offers at 1.1400.
• EM – TRY back in focus with softer than expected Turkish CPI helping the Lira retest recent highs around 5.1500 vs. the buck at one stage, but unable to breach resistance as the USD stage a broad comeback.

In commodities, WTI (+4.1%) and Brent (+3.9%) are both stronger following the positive US-China trade news and reports that Russia and Saudi Arabia are agreeing to extend the OPEC+ agreement; although no production cut figure has been announced so far. Additionally, Qatar, which produces approximately 600,000 BPD of oil, has announced that they are withdrawing from OPEC as of January with this being in-line with their long-term plan. Separately, Canada’s Alberta province is to reportedly mandate a 9% oil output reduction, which amounts to 325,000 BPD, in order to ease a supply glut with this to come into effect from January. Gold (+0.7%) is firmer, albeit off of a 3-week high of USD 1232.30/oz reached earlier in the session; after gaining support from the dollar being weighed on by positive US-China trade news from the G20 summit. Steel and copper prices have also benefited from the positive trade news, with Chinese rebar steel increasing by its 7% exchange-set trading; with copper’s London benchmark prices nearing a two-month high.

US Event Calendar

• 6:30am: Fed Vice Chairman Clarida Interviewed on Bloomberg TV & Radio
• 8am: Fed’s Quarles speaks at Council on Foreign Relations in NYC
• 9:15am: Williams Speaks at a NY Fed Conference on Treasury Market
• 9:45am: Markit US Manufacturing PMI, est. 55.4, prior 55.4
• 10am: Construction Spending MoM, est. 0.35%, prior 0.0%
• 10am: ISM Manufacturing, est. 57.5, prior 57.7
• 10:30am: Brainard Gives Keynote at NY Fed’s Treasury Market Conference
• 1pm: Fed’s Kaplan Speaks at Community Forum in Laredo, Texas
• Wards Total Vehicle Sales, est. 17.2m, prior 17.5m

via RSS https://ift.tt/2ALJrjT Tyler Durden

It’s only Dec. 3, but international investors already have a lot to be grateful for this holiday season. In what was perhaps the most important development for global markets this weekend, President Trump and his Chinese counterpart, Xi Jinping, helped soothe investors’ trade war fears by agreeing over the weekend to a truce – essentially a three-month detente in the US-China trade war that will put the next round of tariffs on hold while the two countries try to forge an agreement on some of the US’s more contentious demands (like putting an end to IP theft by Chinese companies).

The deal inspired shouts of jubilation from Wall Street. But while sell side analysts were busy cranking out bullish sell-side notes with almost unbelievably corny titles (as was to be expected, regardless of which way the Trump-Xi dinner broke)…

inevitable from Citi after the Buenos Aires summit pic.twitter.com/a5HR47OkHK

— Paul McNamara (@M_PaulMcNamara) December 3, 2018

…Italy has taken some serious strides toward calming fears about the “beginning of the end” of Europe by reportedly agreeing to work with the EU to lower its budget deficit target.

According to Bloomberg, Italian with a duration longer than 5 years climbed, sending yields to a two-month low, after the coalition government said it is ready to accept new budget deficit targets, according to Messaggero. Meanwhile, German bunds have pared losses which followed a trade truce between Presidents Donald Trump and Xi Jinping.

It was only weeks ago that Italian Deputy Prime Ministers Luigi Di Maio and Matteo Salvini, as well as the country’s ‘moderate’ economy minister, Giovanni Tria, had claimed that capitulating to the EU would be tantamount to “suicide” for the Italian people. However, that position softened a couple weeks later when Salvini, followed by the rest of the Italian populist establishment, told reporters that Italy would consider a lower deficit target, so long as the populists could still pay for all of the generous social programs promised in their platform. After consulting with Prime Minister Giuseppe Conte, the populists said they were ready “to accept new targets”, with Tria predicting that the EU will suggest a deficit of 2% rather than 2.4%. Such a number seems like a happy medium, that would allow the populists to save face (and preserve their popular mandate) while allowing the EU to crow about preserving fiscal discipline. Conte, who has emerged as the most moderate voice in the Italian government (even surpassing Tria in recent weeks), will lead negotiations with the EU, instead of Tria.

Though the yield on the Italian 10-year has climbed off its lows, it remains down 4.5 basis points on the day.

Last week, Italy’s European peers took the first step toward punishing it as representatives from the EU governments agreed to back the European Commissions call for an “Excessive Debt Proceeding” against Italy. While any sanctions likely wouldn’t materialize until the spring, the anxiety-inducing climb in Italian bond yields, and the ever-present threats of a downgrade from the world’s ratings agencies, has apparently convinced the populists that it would be better for the country – if not politically advantageous – to try and avert a banking crisis.

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Just days before the cartel (along with its outside accomplices) is due to meet in Vienna for what could be another historic meeting, OPEC is dissolving right before our very eyes, as the perceived “US influence” over Saudi Arabia has strained ties within the bloc. As we pointed out on Friday, the increasingly “problematic” perception that Saudi Arabia is accelerating production to appease President Trump – and subsequently that the entire bloc’s policy is now subject to undue US influence – has reportedly brought several OPEC members to the verge of mutiny.

And on Monday, just hours after the conclusion of the G-20 summit in Buenos Aires, Qatar announced that, after more than 55 years of membership, it would be leaving the bloc effective Jan. 1. While countries have left OPEC before, Qatar’s departure is more significant than its declining oil production might suggest: Since forming in 1960, no other Persian Gulf Countries have left (though Ecuador and Gabon once left, only to return, and Indonesia has suspended its membership).

Saad Sherida al-Kaabi

According to Al Jazeera, the Qatari television network, Qatari Energy Minister Saad Sherida al-Kaabi broke the news overnight. It was later confirmed by Qatar’s state energy company, which clarified that Qatar would be leaving OPEC effective Jan. 1.

Qatar announces it was withdrawing from the Organization of Petroleum Exporting Countries “OPEC” effective 1 January 2019.

— Qatar Petroleum (@qatarpetroleum) December 3, 2018

Qatar, of course, has every reason to be angry with the Saudis. A blockade against Qatari exports remains intact following the GCC crisis of summer 2017. And just like then, when we pointed out that the “real reason for the Qatar crisis was natural gas”, so the Qataris have teased that they are leaving OPEC to “focus on LNG”.

Speaking at a news conference in Doha, al-Kaabi said: “The withdrawal decision reflects Qatar’s desire to focus its efforts on plans to develop and increase its natural gas production from 77 million tonnes per year to 110 million tonnes in the coming years.”

The country’s reason for leaving is evident in the numbers: Since 2013, the amount of oil it is pumping has declined by more than 725,000 barrels a day even as global oil production has soared.

Al Jazeera’s correspondent Charlotte Bellis said that Qatar made the decision just days ahead of a December 6 OPEC meeting.

“They say it has nothing to do with the blockade on Qatar and that they have been thinking about it for several months now,” Bellis said, referring to a diplomatic blockade on Qatar by Saudi Arabia, the United Arab Emirates (UAE), Egypt and Bahrain.

“They also said that if you want to withdraw from OPEC it had to be done before the end of the year,” she added.

“They said they wanted to do this now and be transparent ahead of a December 6 OPEC meeting.”

Since 2013, the amount of oil Qatar produced has steadily declined from about 728,000 barrels per day in 2013 to about 607,000 barrels per day in 2017, or just under 2 percent of OPEC’s total output.

Meanwhile, total production during the same period increased from 30.7 million barrels per day to 32.4 million barrels per day.

Despite Putin’s claim that he and Saudi Crown Prince Mohammad bin Salman had agreed to extend the current OPEC+ production cuts, Wall Street analysts – not to mention investors – are still pricing in further cuts for the bloc. Goldman expects production to be reduced by 1.3 million b/d, nearly double the 700k b/d priced in by the Brent futures curve.

Ultimately, Qatar’s departure won’t have much of an immediate impact on OPEC. As its oil production has declined, Qatar has become the world’s biggest supplier of LNG; it produces almost 30% of the world total. Development of its North Field, which is shares with Iran, is the country’s top priority, as it should be. Following the news, Brent crude futures have traded higher all morning.

Even if OPEC doesn’t cut production later this week, Canadian producers in Alberta, the country’s production hub, announced an “unprecedented” production cut over the weekend.

 

But given the recent reports about the discontent with Saudi Arabia’s borderline dictatorial rule over the bloc, the political ramifications of a Gulf producer – particularly Qatar – are difficult to ignore. But in terms of how it might impact the overall production capacity of OPEC, the answer could very well be “minimal”. Because according to media reports, Colombia is reportedly in talks to join the bloc.

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Via Greg Hunter’s USAWatchdog.com,

The International Monetary Fund (IMF) previously deemed Deutsche Bank as the most systemically dangerous bank in the world.

Professor of Economics and Law, William Black, knows why and contends:

“Deutsche Bank (DB) poses as what is called a ‘National Champion’ bank and the largest bank by far in Germany, but it’s actually the largest criminal enterprise in Germany. This is quite a statement because VW is such a massive fraud…

It is insane that we allow Deutsche Bank to go from fraud to fraud to fraud…

They cheat on everything else you can possibly imagine and, typically, they are getting caught, which is also not a very good sign in terms of their competence even as thieves. Even in the United States, there has been reluctance to crack down on Deutsche Bank…

When the New York Commissioner tried to crack down, the Office of the Comptroller of the Currency, the premier banking regulator, actually sought to impede that. He disparaged the New York folks and said there really wasn’t that big of problems and such, and all of that proved to be lies.”

Deutsche Bank was raided by German regulators last week on more allegations of fraud and money laundering.

DB is the epitome of “Too Big To Fail.”

So, it will never be allowed to fail, and regulators will not be allowed to regulate them properly. Professor Black says, “Why you should care is Deutsche Bank impedes effective regulation everywhere and because God only knows the next thing they are going to do…”

“This is going to continue until something dramatic changes. Eventually, they can cause the next crisis…

There will be a bailout in these circumstances, but that could help trigger another economic crisis. When the largest bank in the third largest economy in the world is completely dysfunctional, then the German economy is more likely to go into recession as well. That is one of the potential sources of the next recession, and you can see lots of people warning that there are signs that a serious recession is pretty likely relatively soon. Relatively could be two years.”

Professor Black, who was a top regulator in the S&L crisis, says,

“The whole system weakens itself because it gets caught in this big lie that says we have to pretend that Deutsche Bank is a bank instead of a criminal enterprise.”

In closing, Professor Black says,

“I am going to give you the advice you get after the recession before the recession. Pay off your debt, all that you can. Do not keep borrowing except in certain circumstances like you are going to buy a home, and it is prudent purchase. Buy a car when you can buy it with cash whenever possible…and always try to be a net saver.”

Join Greg Hunter as he goes One-on-One with Dr. William Black, Professor of Economics and Law at University of Missouri Kansas City.

(Correction: Deutsche Bank has a market cap of $19.5 billion and not $1.5 billion as I mistakenly said at the beginning of the interview. Also, Germany’s GDP fell .2% recently and not 2% as I stated later in the interview.)

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For three weeks, tens-of-thousands of French protesters have donned yellow vests and marched throughout Paris. While the “yellow vest” movement began on November 17 as a grassroots protest against president Emmanuel Macron’s gas tax – levied in the name of climate change, it has morphed into a general rage against the French government in general at a time when Macron’s approval rating is at an all time low. 

What’s more, the movement is spreading – with yellow vest demonstrations seen in Belgium, Italy and the Netherlands by those expressing frustration over similar issues. The protests have turned violent, as disaffected rioters have been setting cars on fire, causing structural damage, and assaulting the police.

Riot cops in Brussels, for example, were pelted with billiard balls, cobblestones and other hard objects last week, while the yellow vest movement is now working to form a Belgian political party under the name Mouvement citoyen belge.  

What’s behind the movement?

French authorities have predictably blamed the right-wing for the protests – with interior minister Christophe Castaner denouncing National Rally (*formerly National Front) leader Marine Le Pen of encouraging the violence. 

“Marine Le Pen urged people to come to the Champs Elysees, and there are members of the ultra-right putting up barriers,” said Castaner, adding “They have responded to Marine Le Pen’s call and want to take the institutions of state. We want people to be responsible.”

The real cause, however, may be quite a bit more nuanced and a long time coming. As political commentator Kark Sharro suggests in a seven-part tweetstorm, the Yellow Vest movement is “about marginalsation and the impotence felt by ordinary people.” 

An organic, leaderless protest movement with no clear ideology has emerged in France. I’ve been waiting for this since 2011. Let me explain the French Spring to you.

— Karl Sharro (@KarlreMarks) December 1, 2018

Firstly, why the colour yellow? In traditional French culture, yellow represents the Mediterranean regions of France which always felt oppressed by Paris. These protests represent ancient regional grievances.

— Karl Sharro (@KarlreMarks) December 1, 2018

Secondly, why the vests? In the French psyche, the lack of arms represents ‘helplessness’. The protests are about marginalisation and the impotence felt by ordinary people.

— Karl Sharro (@KarlreMarks) December 1, 2018

A respected Lebanese anthropologist has studied the protests and concluded that the burning of cars represents ‘anger’. These protesters appear to be unhappy about something, and it’s more than just typical French grumpiness.

— Karl Sharro (@KarlreMarks) December 1, 2018

In overturning cars the yellow vests are symbolically overturning the entire Cartesian premise of France. This is not merely against the authoritarian Macron but a revolt against the centuries old republican order.

— Karl Sharro (@KarlreMarks) December 1, 2018

Experts are already warning of a ‘domino effect’ leading the protests to spread from France to neighbouring countries. In all of this it’s not clear how we in the East should respond, aside from calling on the French authorities to respect the right to protest.

— Karl Sharro (@KarlreMarks) December 1, 2018

Lastly, and I say this with supreme delight as a Middle Eastern person, it’s clearly all about the oil.

— Karl Sharro (@KarlreMarks) December 1, 2018

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Authored by Richard Galustian via TheDuran.com,

The G20 in Argentina was nothing short of a circus; a distasteful display of imperialism, greed, corruption and elitism. These leaders do not speak for the poor or downtrodden or oppressed…

As for America, Trump continues his theatrics by saying he would not meet Putin; whether he did or didn’t, us ordinary folk will never know. These are games. Though President Trump canceled his meeting with Putin, Trump met with China’s President Xi, let us not fool ourselves about prospects for any real breakthrough over their two countries’ trade disagreements from a so-called ‘truce’.

China emerges as ‘the grown up’ of all world nations; the 21st Century will eventually, one can predict, belong to them.

However one must admire the charm, intellect and humour of the exceptional Russian Foreign Minister Lavrov, who on the subject of a cancelled meeting between Trump and Putin, he brilliantly described the dance between the two nations by saying he was saddened by President Trump’s decision, adding “love can’t be forced.”

Do we have any person in the West that comes close to the class of Lavrov?

One cannot fail to mention though no more revolting images imaginable were the mostly warm welcome by many leaders given to the psychopath Crown Prince of Saudi Arabia, Mohamad bin Salman (MBS).

However the one that disappoints the most is the sight of President Putin with MBS, laughing and joking.

The main reason is that for the last few years, Russia and Putin and his exceptionally capable Foreign Minister Sergei Lavrov have maintained a very high moral ground on most of the world’s issues and outrageous actions, in the main, made by America. This has been Russia’s success these recent years, especially their brilliant handling of the World Cup.

But to see President Putin’s animated display of friendship towards MBS was nothing short of disgusting.

Putin’s advisors should never have allowed their President to make such a disillusioning mistake for all of us to see.

MBS and the Saudi regime are the most distasteful murderous regime on the planet. Putting the heinous murder by the Saudi’s of Jamal Khashoggi to one side, what Saudi is doing in Yemen is without doubt a war crime of huge proportions. They also are the real exporters of terrorism not Iran. Remember who were the alleged hijackers on 9/11. Saudis or Iranians? Only Israel match being as murderous a regime as Saudi, evidenced by what they have done and continue to do in the ‘open prison’ that is Gaza.

When did we all lose our moral compass?

You think these second rate leaders can solve the most important planet’s problems of over population, the environment and nuclear proliferation? Dream on.

For some of us there was hope that Russia could counter the imperialistic ambitions of America and it’s penchant for regime change. Now that hope seems to have been a false.

All these spineless amoral leaders attending the G20 meeting should be in many cases simply arrested or put up against a wall. Where is the anger, the indignation from the world’s populace against their leaders? Where is the media? Why is Assange not spoken of, etc.

In a nutshell, the G20 only reinforces a fact most of us know which is that corrupt leaders control our planet.

We need, though it will never happen, a ground swell of revolution by the people, by citizens, to change the system, of most countries, even if it be violent, which seems the only way anything will change.

The G20 meeting was of corrupt people on a scale akin to a mafia get together.

Corruption is the World’s greatest enemy and in Buenos Aires we saw ‘the Dons’ get together and, be sure of one thing above all else, there will be no real result except the leaders attending will increase their personal self interests and wealth.

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