Category: zerohedge

In what may be confirmation that the recent turmoil in Italian bonds has finally spooked Italy’s coalition government into “blinking” in its standoff with the EU Commission, newspaper Il Foglio reports that “some economic advisers” are pushing coalition partners to reduce Italy’s deficit target for 2019 as a result of pressure from Brussels (and bond vigilantes).

Specifically, the newspaper cites anonymous sources that some League and Five Star advisers would favor a reduction in the deficit target from the current 2.4% with 2.1% seen as possible compromise.

As a reminder, yesterday the commission rejected Italy’s proposed budget, saying it was excessive, and the deviation from EU guidelines was “unprecedented.”

Meanwhile, tensions within the ruling coalition are building up, Italian Deputy PM Salvini broke off from speaking events in northern Italy, where his party will fight a regional election Sunday, to return to Rome amid the standoff with Europe.

Bloomberg reported that while Italian markets tumbled Friday with the European Union shaping up to reject Italy’s 2019 budget, Salvini was embroiled in a spat with his coalition partner, Luigi Di Maio of the Five Star Movement, over tax policy. Specifically, Di Maio accused Salvini’s pro-business party, the League, of secretly sweetening a tax amnesty proposal that he’d only grudgingly agreed to in the first place. Salvini has denied any such thing ever happened and is flying back from Trentino near the border with Austria to thrash out the issue at a cabinet meeting in Rome at 1 p.m. on Saturday.

“Our enemies are outside, not inside the government — let’s talk about this as a family,” Salvini said in a Facebook Live video. Some Five Star lawmakers are acting as if they were in opposition to the government, he added.

The administration has been under fire from investors and the EU. With bond yields climbing, the 2019 spending program was attacked by several European leaders at a summit in Brussels this week as the European Commission warned that its budget draft won’t fly.

“If one breaks these rules and Italy diverges from Maastricht, then that means Italy is endangering itself and of course endangering others,” Austrian Chancellor Sebastian Kurz told reporters Friday, referring to the Maastricht Treaty which governs the single currency. “We as the European Union are not prepared to take on this risk.”

The market was quick to punish Italy on Friday morning when the spread between Italian and German 10-year bonds reached a five-year high of 341 basis points on Friday after Premier Giuseppe Conte failed to convince his European partners that Italy should be allowed to flout the EU’s fiscal rulebook.

Even as Di Maio and Salvini have both ruled out making any changes to the budget as they seek to deliver on election promises including a “citizen’s income” for the poor, tax cuts and a lower retirement age, they are fighting over the planned tax amnesty.

Di Maio on Wednesday said that someone had changed the language in the government’s draft decree to allow Italians to get around the 100,000-euro ($115,000) limit that his party had insisted on. The League had pushed for a ceiling of 1 million euros, according to local press reports, and Di Maio was clearly pointing the finger at Salvini’s team.

Meanwhile, prime minister Conte said in a Facebook post that debate between the different coalition groups was at times “vibrant” but the government has “proved it is able to work as a team.” However, growing acrimony within the coalition has cast doubt whether Italy’s biggest foes are indeed “outside”, and whether the lack of a compromise won’t lead to a collapse in the relatively new populist government.

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China’s National team rescued the world overnight…

It all started so well…

Today’s rally pic.twitter.com/4k3bVVlvte

— Joe Saluzzi (@JoeSaluzzi) October 19, 2018

Where’s The PPT?

 

And on the 31st anniversary of Black Monday too…

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The Mexican Peso has quickly extended yesterday’s losses following remarks by US Secretary of State that US and Mexico “still have serious issues between them,” indicating that they are “quickly reaching crisis levels on migrants at the border.“

Mexico Foreign Minister Luis Videgaray responded by noting that Mexican officials take the lead on its own migratory policies.

“What is the essence of our position; it is the respect to human rights, the dignity of people as well as the protection of this migrant group”

Mexico Foreign Minister Luis Videgaray says Mexican officials take the lead on its own migratory policies.

“What is the essence of our position; it is the respect to human rights, the dignity of people as well as the protection of this migrant group” #tictocnews pic.twitter.com/UBTUjGLrPK

— TicToc by Bloomberg (@tictoc) October 19, 2018

This has pushed the peso down to six-week lows…

 

 

 

 

 

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In what may be the deadest canary in the commercial real estate coal mine yet, Bank OZK shares have plunged 26% today after the bank reported abysmal third-quarter earnings that trailed expectations, with net income tumbling but what caught traders’ attention was two commercial real estate charge-offs of $45.5 million on the bank’s Real Estate Specialties Group (RESG) credits for unrelated projects in South and North Carolina.

The Little Rock-based regional bank, with just over $22 billion in assets, also reported that net income declined 23% to $74.2 million in its third quarter from the same period in 2017 due to these write-offs. Bank OZK’s earnings have been closely monitored by analysts since it is such an active real estate lender. The bank reported that the two write-offs during the third quarter were in its Real Estate Specialties Group (“RESG”) portfolio and were related to properties in South Carolina and North Carolina from loans originated in 2007 and 2008, the Real Deal reported.

The bank said in its management comments that its South Carolina charge-off was secured by a regional mall, which has suffered from both “declining property performance and increasing interest rates.” The project was further impacted by uncertainty related to anchor tenants Sears and JC Penney. The North Carolina charge-off was secured by a multi-phase land, residential lot and residential home project, with the bank noting that the homes have not sold well in part due to “cheaper pricing on existing homes.”

What shocked analysts, however, is that these properties had allowance allocations totaling only $19.1 million as of June 30. But after new appraisals, which were much lower than it initially presumed, the bank said it would have to write down each credit to about 80% of its recent appraised value. The combined charge-offs on the two loans in the third quarter came to $45.5 million. Since the bank already had the $19.1 million allowance, it had to make an additional provision expense of $26.4 million. Had it not, its earnings would have slightly surpassed its third quarter 2017 earnings of $96 million.

The bank then tried to placate shareholders noting that “other than these two substandard and one watch credit, the credit quality of the RESG portfolio is excellent” however judging by the share price, it failed at this task.

Meanwhile, the bad news continued with the bank also reporting that its net interest margin was down 37 basis points from the third quarter of 2017 to 4.47%. The bank said this was due to a lower than expected yield on non-purchased loans.

The regional bank has been a very active real estate lender, providing the biggest condo construction loan in the Miami area, $558 million for The Estates at Acqualina in Sunny Isles Beach. It also provided more than $1.2 billion in construction loans in the Miami metropolitan area from 2013 through 2017, according to its 2017 annual report.

Bank OZK was formerly known as Bank of the Ozarks until July, before rebranding itself in a campaign that cost it over $10 million, in an effort to free itself from “the limitations of a name tied to a specific geographic region,” according to a statement from the bank at that time.

Commenting on the results, Wall Street was relentless, with Raymond James analyst Michael Rose wiring “No Mas!” in a note downgrading OZK to market perform, adding that credit issues from OZK’s “seemingly-infallible RESG portfolio were a non-starter,” and had been key tenet of formerly-positive thesis; “with defenses penetrated, no matter how small a breach, confidence in OZK mystic has evaporated.”

Rose also said that his downgrade may be at/near bottom, given “expected fallout” in OZK shares; also flags slower loan growth, NIM outlook

Meanwhile, Morgan Stanley’s Ken Zerbe said that the two RESG loans had been on OZK books for 10, 11 years, and don’t represent more recent quality of loans; he sees one other loan, currently on watch list and also originated in 2008, as potentially posing credit problem. He also flagged the NIM drop of 19bps q/q to 4.47%, missing Morgan Stanley est. 4.65%; end-of-period loan balances gain of $257m q/q vs est. $525m; mgmt noting that 4Q non-purchased loan balances could be “near-zero or even negative,” which would put further pressure on future net interest income. Finally, he expects to “materially reduce” EPS estimates putting his rating and price target under review.

Finally, KBW’s Catherine Mealor wrote that when there are two “losses as large as this, no matter how different they are from the rest of the portfolio, the market is going to shoot first, ask questions later”, adding that OZK shares will stay at a significant discount vs peers “for the foreseeable future.”

One look at the stock price of OZK today confirms the bearish thesis.

 

 

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Long-simmering speculation that Amazon was leaning toward the Washington DC suburbs, either Montgomery County Maryland or somewhere in Northern Virginia, for its long-anticipated HG2 has just been dashed by a Wall Street Journal report claiming that Amazon executives have recently undertaken another round of location tours among its 20 ‘finalist’ cities, a sign that CEO Jeff Bezos could be having second thoughts about building the second headquarters near one of his homes, and the Washington Post, a newspaper that he owns.

Though cities comprise most of the finalists, the notion that Amazon might pick a more suburban location has started to fade, as the executive search team has focused mostly on cities like New York City and Chicago with easily walkable neighborhoods.

The visits over the past couple of months include New York City, Newark, N.J., and Chicago, according to people familiar with the matter. In addition, Amazon has been following up with other locations, including Miami and the Washington, D.C.-area, according to some of the people. Some cities, like Raleigh, N.C., haven’t heard from the retail giant in months, according to people familiar with the matter.

The discussions, which follow an initial round of visits early this year, have added to the already intense speculation regarding which way the technology giant is leaning. While Amazon appears to be narrowing its list of 20 finalists, it is still unclear which cities may be in the lead, and what exactly the additional visits indicate about specific cities’ chances.

[…]

Still, the visits have shed some additional light on the process. Amazon, for instance, appears to be favoring an urban site, say people familiar with the matter, which could be a problem for some sites in Northern Virginia and Montgomery County, Md. Those two suburbs of Washington, D.C., along with the district itself, have long been speculated to be front-runners, in part because Chief Executive Jeff Bezos has a home there and owns the Washington Post.

Even if Amazon has already made its final decision, investors, the public and even the cities themselves likely won’t know it right away, as the company is expected to negotiate several decoy “final” deals to avoid details of their true decision from leaking to the press.

They said the company may negotiate near-final deals with several of them before announcing its ultimate selection, something that could help avoid signaling its choice prematurely.

The flurry of recent discussions are part of the home stretch in a contest kicked off in September of last year, when Seattle-based Amazon announced a public search for what it dubbed HQ2. The company said it could hire as many as 50,000 employees and invest more than $5 billion in the new location over nearly two decades.

News of the company’s apparent keen interest in Chicago, New York City and Newark, NJ probably won’t sit well with city officials in Pittsburgh and Indianapolis, smaller cities where Amazon could have a significant impact on the city’s culture and economic development.

The HQ2 search has broken the mold for economic development in a way that experts say could have lasting impact on how companies invest in new sites—much like Amazon in its business has disrupted everything from the way consumers shop to the way companies compute and store their data.

The shortlist of 20 locations includes large, established cities like New York and Los Angeles, as well as smaller cities like Pittsburgh, Columbus, Ohio, and Indianapolis that have recently experienced an economic revival. The stakes for these smaller cities in winning HQ2 are especially high, promising drastic change by drawing in more highly-skilled workers, attracting other businesses and boosting real-estate prices, according to economic development experts.

Officials in these smaller cities are growing increasingly anxious, with some figuratively “sitting by the phone” waiting for a call from Bezos.

After more than a year, officials “are all sitting by their phone waiting,” said Jeff Finkle, president of the International Economic Development Council, an organization that represents economic development officials across the country.

Amazon is considering dozens of metrics and factors in its decision, including available tech talent and educational resources, cost of living, and public transportation.

And while the company could risk a speculative run-up in real estate prices if word of its preferred location leaks, WSJ reported that Long Island City, Queens has apparently attracted the interest of several Amazon executives.

In the recent visits, Amazon executives spent much of their time exploring neighborhoods around, or nearby, sites that have been proposed for HQ2, said the people. Executives appear to be more interested in an urban site that is already woven into the fabric of the city and less interested in having its own campus outside a city center, said the people. One reason would be shorter commutes. It could also help with recruiting employees, something that has proven true with its urban, downtown Seattle campus which is peppered with walkable apartment buildings and trendy restaurants.

In New York City, one of the neighborhoods Amazon is exploring is Long Island City, Queens, according to one of the people. The residential neighborhood is perched on the East River overlooking Manhattan, and is being gentrified by high-rise buildings and young professionals.

The potential prize for whatever city emerges as the company’s pick is huge. Amazon has pledged $5 billion in investment and 50,000 jobs. And while the company may be taking a second look at other cities, the New York Times pointed out earlier this week that Northern Virginia still checks the most boxes. The company’s largest office for its cloud-computing division outside of Seattle is already located there, and it would put Bezos close to Washington, which could help when negotiating lucrative government contracts like the $10 billion contract to migrate the Pentagon’s systems to the cloud. Some observers have even identified an office park that could be a prime location for Amazon’s new offices: Crystal City, an office park named after a neighborhood of Arlington, Va., which benefits from being just across the Potomac River from Washington. Online betting odds and analysts at Citigroup still see Northern Virginia as the most likely choice. Virginia is also seen as a more business-friendly state than Maryland. Of course, Bezos refused to offer clues about the company’s thinking during a speech at the Air, Space and Cyber Conference last month – though he did offer one new piece of information.

Amazon is planning to unveil its decision by the end of the year. So any real estate speculators hoping to front-run the company better get moving.

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Authored by Patrick Buchanan via Buchanan.org,

Our mainstream media remain consumed with the grisly killing of Washington Post columnist Jamal Khashoggi in the Saudi consulate in Istanbul, and how President Donald Trump will deal with Crown Prince Mohammed bin Salman.

Understandably so, for this is the most riveting murder story since O.J. Simpson and has strategic implications across the Middle East.

Yet far more critical to the future of our civilization is the ongoing invasion of the West from the Third World.

Consider the impact of the decision by Chancellor Angela Merkel in 2015 to throw open Germany’s doors to 1 million refugees from Syria’s civil war.

Last weekend, in a crushing blow to Merkel, the Christian Social Union, the Bavarian sister party of her CDU, won its smallest share of the vote in half a century, 37 percent. Her coalition party, the SPD, saw its share of the Bavarian vote fall to a historic low of less than 10 percent.

The right-wing Alternative for Deutchland saw its support rise to 10 percent and has become a force in German politics. Some conservatives are urging the CDU to adopt the AfD hardline on illegal immigration.

The message sent by the Bavarian electorate is the message voters across Europe have been sending to their own capitals for years: You are failing in your first duty — defense of the homeland from foreign invasion. Mass migration of unassimilable peoples and cultures from a global South represents an existential threat to our Europe.

As Merkel’s chancellorship approaches its end, French President Emmanuel Macron, her progressive EU partner, has seen his approval fall to below 30 percent.

The U.S.-led NATO alliance may guard the Baltic and Black Sea regions against a Russian invasion from the east. But in Central, Southern and Western Europe, the more feared invaders are the peoples of Africa and the Muslim world, whose numbers are expected to triple or quadruple by this century’s end.

And as their numbers grow, so, too, does their desperation to escape, even at risk of their lives, the poverty, wars and repression of their homelands to cross the Med and fill the empty spaces left by a depopulating Europe.

It also now appears that the U.S. elections, not three weeks away, may be affected by another immigration crisis on the U.S. border.

As of Thursday, a caravan of 4,000 refugees without visas had crossed from Honduras into Guatemala and was heading toward Mexico. By Election Day, it will either have been stopped, or it will be here. And this caravan is a portent of things to come.

According to The Washington Post, during FY 2018, which ended last month, 107,212 members of “family units” crossed over into the U.S., “obliterating the previous record of 77,857 set in 2016.”

Citing DHS figures, the Post adds, “Border patrol agents arrested 16,658 family members in September alone, the highest one-month total on record and an 80 percent increase from July.”

When Trump, under intense political fire, ended his “zero tolerance” policy of separating refugees from their children, this message went out to Mexico and Central America:

Bring your kids with you when you cross the border. They will have to stay with you, and they cannot be held for more than 20 days. Thus, when they are released, you will be released to await a hearing on your claim of asylum. The odds are excellent that you can vanish into the U.S. population and never be sent back.

Enraged, Trump has threatened to cut off aid to El Salvador, Honduras and Guatemala if they do not stop the caravans and has warned Mexico he will use the U.S. military to secure our border.

Unwanted mass migration is the issue of our time, as there is no foreseeable end to it before it alters America irremediably.

As these migrants are almost all poor, not highly skilled, and do not speak English, most will join that segment of our population that pays no income taxes but qualifies for social welfare benefits like food stamps, medical care and free education in our public schools.

They are thus a net drain upon the resources of a nation that is already, at full employment, running a deficit of $779 billion a year.

These migrants, however, are a present and future benefit to the Democratic Party that built and maintains our mammoth welfare state, and which, in presidential elections, routinely wins 70 to 90 percent of the votes of people whose trace their ancestry to Asia, Africa and Latin America.

Not without reason, Democrats believe that if they can change the composition of the American electorate, they can control America forever.

If Donald Trump was elected on any one issue, it was immigration and his promises to secure the border, build the wall and halt the invasion.

How he deals with the impending crisis of the migrant caravan may affect both the fate of his party in November and his presidency in 2020.

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President Trump praised Republican Congressman Greg Gianforte, who defeated Democrat Rob Quist in a special election for Montana’s lone seat in the House during the spring of 2017, for an infamous incident where he was filmed body slamming a Guardian reporter during a campaign event. Gianforte eventually pleaded guilty to a misdemeanor assault charge and was ordered to do community service and participate in anger management classes.

During a campaign rally in Missoula, Montana Thursday night, Trump lauded Gianforte’s assault, saying anybody who could do a “body slam” was “my guy.”

“Any guy that can do a body slam, he’s my kind of guy,” Trump said to applause. “I shouldn’t say that — (but) there’s nothing to be embarrassed about.”

Trump also claimed that he expected that the assault would only improve Gianforte’s chances during the election and praised him as a “tough cookie” and “great guy.”

“We endorsed Greg very early. But I heard that he body-slammed a reporter. This was the day of the election or just before, and I thought ‘Oh, this is terrible! He’s going to lose the election.'”

Trump said he initially thought Gianforte’s act of violence would hurt his election chances, but “then I said ‘well, wait a minute, I know Montana pretty well, I think it might help him.’ And it did!” Trump said. “He’s a great guy. Tough cookie.”

After Trump’s remarks, Gianforte took the stage to cheers. “Mr. President, thank you for giving us hope again,” he said.

Following Trump’s remarks, the Guardian released a statement criticizing Trump’s comments, arguing that they were made more inappropriate by the ongoing investigation into the disappearance of Jamal Khashoggi, a journalist who is believed to have been murdered by the Saudi government.

“To celebrate an attack on a journalist who was simply doing his job is an attack on the First Amendment by someone who has taken an oath to defend it,” Guardian US editor John Mulholland said in a statement, in which he brought up the apparent slaying of a Washington Post writer at the Saudi Arabian consulate building in Turkey.

“In the aftermath of the murder of Jamal Khashoggi, it runs the risk of inviting other assaults on journalists both here and across the world where they often face far greater threats.”

Per the Guardian, Gianforte’s Democratic opponent in November, Kathleen Williams, released a new advertisement responding to Trump’s comments.

In an statement, the campaign said “Gianforte’s assault and lies are not who we are as Montanans.”

Watch the full video below:

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Authored by Raul Ilargi Meijer via The Automatic Earth blog,

It’s no surprise that China has its own plunge protection team – but why were they so late? – now that Beijing blames its problems on Trump’s tariffs. GDP growth was disappointing at 6.5%, but whoever believed those almost always dead on numbers? It would be way more interesting to know what part of that growth has been based on debt and leverage. But that we don’t get to see.

So we turn elsewhere. How about the Shanghai Composite Index? It may not be a perfect reflection of the Chinese economy, no more than the S&P 500 is for the US, but it does raise some valid and curious questions.

Borrowing from Wolf Richter, here are some stats and a graph::

• Lowest since November 27, 2014, nearly four years ago

• Down 30% from its recent peak on January 24, 2018, (3,559.47)

• Down 52% from its last bubble peak on June 12, 2015 (5,166)

• Down 59% from its all-time bubble peak on October 16, 2007 (6,092)

• And back where it had first been on December 27, 2006, nearly 12 years ago.

The first thing I thought when I saw that was: how on earth is it possible that in an economy that’s supposedly been growing 6%+ for a decade, stocks have gone nowhere at all? And obviously the role of the Shanghai index is different from that of the S&P, the DAX or the FTSE, but at the alleged Chinese growth rate, the economy would have almost doubled in size in 10 years. And none of that is reflected in stocks?

And if you think Shenzhen is a better barometer of ‘real’ China, Tyler Durden had this graph yesterday. Not the same as Shanghai, but similar for sure.

But other aspects of the Chinese economy are perhaps more interesting, I think. China’s mom and pop are not typically in stocks. In the Zero Hedge article I took that graph from, there is also this:

“There’s a liquidity crisis in the stock market, and pledged shares are again starting to sound the alarm,” said Yang Hai, analyst at Kaiyuan Securities. [..] The fear is that if Beijing does nothing, the self-reinforcing liquidation is only set to get worse: with $603 billion of shares pledged as collateral for loans – or 11% of China’s market capitalization, – traders are increasingly concerned that forced sellers will tip the market into a downward spiral.

[..] China in June told brokerages to seek approval before selling large chunks of stock that have been pledged as collateral for loans, while the top financial regulator in August warned the industry that it’s closely watching corporate stock pledges. Neither of those warnings appears to have generated the desired outcome, and the result is that two-thirds of Shenzhen Composite stocks are now at 52-week lows or worse.

[..] what are investors to do in this time of panicked selling? Why demand more bailouts of course, like begging the National Team to step in and rescue them (just like in the housing market): “If there are no real policies to cure the array of problems and ailments in our market, no one will be willing to take the risk,” said Hai. “Authorities keep saying that there is room for more polices, but where are they?”

“It’s high time the state stepped in,” said Dong Baozhen, a fund manager at Beijing Tonglingshengtai Asset Management. “The national funds cannot just sit on the sidelines and watch this atmosphere of extreme pessimism.”

It’s this clamoring for the state to come to the rescue people who are losing money that would appear to define China today, where there is a stock market and housing market, and many ‘investors’ making lots of money, but where the mentality still seems to lurk back to days of old when things don’t only go up in a straight line.

There was another report recently of people demonstrating outside a property developer’s office because the firm had lowered purchase prices by 30%. Those that had paid full price now stood to lose that 30%. This happens frequently, and it can get violent. Mom and pop are not in stocks, they are in real estate:

Property accounts for roughly 70 per cent of urban Chinese families’ total assets – a home is both wealth and status. People don’t want prices to increase too fast, but they don’t want them to fall too quickly either,” said Shao Yu, chief economist at Oriental Securities.

The Chinese are thinking about leaders from Deng Xiao Ping to Xi Jinping that it’s great if they steer the country in a direction where everyone can get rich, but when things go awry, it’s still Beijing’s task to solve the problems if and when they occur. I would expect the same kind of thing in many western countries where people have borrowed heavily into housing bubbles, I don’t see mass foreclosures in Sweden, Denmark, Holland, but bailouts of people who grossly overpaid.

But the Chinese go a step further in their demands from central government. And that is an enormous problem for Xi going forward. One crucial facet of all this is psychological: when people count on being bailed out by their government, they will take much more risk, borrow more, with higher leverage etc. If you allow people things like pledging shares to but more shares, or homes, and shares fall, you have an issue.

China’s well-known for companies buying each other’s shares to appear viable. It’s also known for local governments borrowing heavily from shadow banks in order for party officials to look as if they’re performing real well.

Now of course, if Beijing keeps on presenting all those growth numbers that look so solid, it’s asking for it. Moreover, the Party has lost control over the shadow banks, and it couldn’t act to regain that control if it wanted. It could initiate a program to forgive debt owed to national banks, but what’s owed to the shadows will have to be paid. We’re talking many trillions.

The Party has let the shadows in, because it made its own debt numbers look so much better. But when this whole debt balloon, on which so much of the GDP growth has rested, and the roads to nowhere and empty apartment blocks and cities, starts to pop, who are the Chinese going to turn to? For that matter, who is Xi going to turn to?

Yes, much of the western wealth has turned into a mirage, but in that respect, too, China has done what we did in a fraction of the time. Trump’s tariffs may play a role in a slowdown, but wait until the western economies deflate their debt bubbles and stop buying much of China’s products.

Bubbles vs balloons, that seems a proper way to phrase this. And for better or for worse, Jerome Powell is hiking interest rates. There’s your Needles and Pins.

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The Texas Democratic Party has been sending pre-filled applications to non-citizens with the citizen box marked “yes,” according to new complaints filed Thursday by the Public Interest Legal Foundation. The organization notified district attorneys and the Department of Justice, and included a signed affidavit from a man who claims that several relatives who are not citizens received the mailing, according to the Washington Times. 

“This is how the Texas Democratic Party is inviting foreign influence in an election in a federal election cycle,” said PILF spokesman, Logan Churchwell. 

The Texas secretary of state’s office confirmed that it too had received complaints from immigrants and the relatives of dead people who said they were sent the registration mailings. 

“If true there will be serious consequences,” said Texas governor Greg Abbott, a Republican. 

A complaint says the Texas Democratic Party asked noncitizens to register to vote, sending applications with citizenship box pre-checked. This is being investigated. If true there will be serious consequences. #txlege #tcot #PJNET https://t.co/dgSPT8f77G

— Greg Abbott (@GregAbbott_TX) October 18, 2018

The PILF publicly released complaints it sent to Hidalgo and Starr counties asking for an investigation. The organization also provided copies of pre-marked voter applications and the affidavit from the man who said his non-citizen relatives received the mailing.

The applications were pre-addressed to elections officials, which is likely what left many voters to believe they were receiving an official communication from the state.

But the return address was from the State Democratic Executive Committee, and listed an address in Austin that matches the state Democratic Party’s headquarters.

The letter is emblazoned with “Urgent! Your voter registration deadline is October 9.” It continues: “Your voter registration application is inside. Complete, sign and return it today!”

Letter from PILF to the Hidalgo County DA, and a signed affidavit from David C. Kifuri, a former employee of the 229th Judicial District Attorney. 

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Authored by Tim Daiss via Oilprice.com,

Now that global oil markets have gotten used to Saudi-Russian oil production cooperation that first hit the scene in early 2017 in an effort to reign in global price concerns, it appears that the two fledgling allies are also going to cooperate in the liquefied natural gas (LNG) sector. And this time too, it looks as if the alliance could take aim at U.S. energy ambitions.

The kingdom’s media savvy energy minister Khalid Al-Falih said at the India Energy Forum in Delhi on Monday that Saudi state-owned Saudi Aramco is open to the idea of marketing some of the LNG from the proposed Russian Arctic LNG 2.

“Aramco has the mandate to go global and not only invest in downstream but also invest in gas and LNG. We have looked at projects in Africa and the Mediterranean, and of course the Arctic with some Russian companies, Novatek. The idea is that Aramco will trade that [LNG] globally and bring some of that to India and other markets,” Al-Falih said.

“We have looked at projects in Africa and the Mediterranean, and of course the Arctic with some Russian companies, Novatek,” he added.

Mammoth gas project

Arctic LNG 2 will be a mammoth facility and increase Russia’s gas ambitions for not only pipeline gas to Europe but to key LNG markets in Asia that account for over 70 percent of global LNG demand, with that demand growth projected to increase amid China’s ramped up natural gas usage. The project envisages the construction of three LNG trains at 6.6 million tons per annum (mtpa) each, or 535,000 barrels of oil equivalent per day. It is seen starting up sometime between 2022 or 2023.

As far back as the beginning of the year, Saudi Arabia and Russia indicated that they could become LNG partners when Aramco and Novatek signed a MoU over possible cooperation in Arctic LNG 2.

Aramco is “seriously” studying investing in the planned Arctic LNG plant, Saudi Energy Minister Khalid Al-Falih told reporters in Riyadh on February 14 at a joint briefing with his Russian counterpart. Saudi King Salman is keen to strengthen energy ties between the two nations following their oil-cuts collaboration that helped drive crude’s recovery, according to Al-Falih.

Russian President Vladimir Putin is keen on developing more LNG projects in an effort to rival top LNG producers Qatar and Australia. However, with Qatar projected to reach 110 mtpa of liquefaction capacity within around five years, that’s an ambition that may never materialize. Saudi Arabia for its part is also seeking to double its gas production over the next ten years.

Key take-aways

The possibility of a joint Saudi-Russian alliance in not only oil markets but in gas markets has significant take-aways for both energy markets and geopolitical developments, particularly in the Middle East. First, it comes as the Trump Administration and Riyadh are feverishly trying to do damage control over possible Saudi implication in the alleged killing of U.S. resident and journalist Jamal Khashoggi. While Trump is trying to tone down criticism both internationally and among an outraged Congress on both sides of the isle, it remains to be seen what will happen if Turkish or even international investigations find Saudi Arabia was instrumental in wrong doing over the incident.

Adding another layer of complexity to the issue, yesterday CNBC reported that Saudi Arabia was even considering a certain level of responsibility over the missing journalist, by admitting that Khashoggi was inside the Saudi consulate in Istanbul and that he could have even been killed inside the consulate.

Financing problems for U.S. projects

Moreover, Al-Falih’ comments on Monday over Saudi-Russian gas cooperation come as Russia and the U.S. jockey for geopolitical leverage in the Middle East. In essence, the U.S. has backpedaled its decades long dominance in the region while Russia, mostly in the ongoing Syrian civil war and with its pro-Tehran stance, is increasing its influence in the Middle East.

However, geopolitics aside, a Saudi-Russian alliance in global LNG markets could create problems for U.S. project proposals that are already facing headwinds as the U.S. second wave of projects seek financing and long term off-take agreements to go forward amid Chinese tariffs on U.S. LNG. With the prospects of a protracted trade war between Washington and Beijing likely, numerous LNG projects in the U.S. could fall behind schedule or not even receive financing and lose out to a host of other eager competitors, including Mozambique, Canada, and bringing the situation full circle – even Russia.

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