“Uninvestable”: Interest In Oil Service Stocks At A “Career Low”, Piper Warns
There have been few sectors dripping with apathy of late quite like the oil services sector.
On Tuesday, The Philadelphia Oil Service Sector Index fell 2% again, adding to a 15% drubbing it has taken this year so far, according to Bloomberg. Over the same period of time, the S&P 500 index has risen 25%.
Piper Jaffray sent analysts to New York recently to gauge investor interest in the industry, which remains tepid. The company’s analysts wrote in a note: “Not surprisingly, interest in oil service stocks is at a career low, if one’s marketing schedule is an indication of interest.”
They stated that marketing trips in the oil services sector consist of “a sparse two-day schedule featuring plenty of coffee time between meetings.” Years prior, such trips would often include back-to-back meetings along with group lunches and dinners, the analysts said.
Oilfield stocks remain a concern due to their leverage, profitability concerns and poor well returns.
Bank of America even commented in a recent note that Apple, on its own, is worth more than the S&P 500 Energy Index, which includes names like Conoco, Exxon and Chevron.
Many oil stocks now have dividend yields between 3% and 5%, but that hasn’t been enough to convince investors to buy into the weakness. “Collectively, the consensus view is that the oil service sector remains un-investable,” Piper’s analysts concluded.
But not everybody agrees. Recall, just last week we noted that Sam Zell and other billionaires were starting to circle the oil industry like vultures, scooping up assets from distressed companies on the cheap.
TheObama holdoverheading the Pentagon office reportedly under investigation by the U.S. attorney who is conducting the criminal probe of the Trump–Russia investigation was accused of leaking a classified document, in a recent court filing for retired Lt. Gen. Michael Flynn.
The connection hasn’t been previously reported.
According to a Nov. 21 report by independent journalist Sara Carter, U.S. Attorney John Durham is questioning personnel in the Pentagon’s Office of Net Assessment (ONA). ONA awarded about $1 million in contracts to FBI informant Stefan Halper, who appears to have played a key role in alleged U.S. intelligence agency spying on 2016 Trump campaign advisers Carter Page and George Papadopoulos.
In addition, however, a court filingindicates that ONA’s director, James H. Baker, “is believed to be the person who illegally leaked the transcript of Mr. Flynn’s calls” to The Washington Post. Specifically, the filing states, “ONA Director Baker regularly lunched with Washington Post Reporter David Ignatius.”
The filing adds that Baker “was Halper’s ‘handler’” at ONA. Moreover, according to the court filing, the tasks assigned to “known long-time operative for the CIA/FBI” Halper “seem to have included slandering Mr. Flynn with accusations of having an affair with a young professor (a British national of Russian descent).”
Baker didn’t respond to a request for comment by The Epoch Times as of press time.
The filing notes that Flynn’s defense team has requested phone records for then-Director of National Intelligence James Clapper, likewise in order to confirm contacts with Ignatius. The filing singles out records for Jan. 10, 2017, when, according to the filing, “Clapper told Ignatius in words to the effect of ‘take the kill shot on Flynn.’”
Clapper didn’t respond to a request for comment by The Epoch Times as of press time.
The Pentagon’s current inspector general has already found that Baker’s office “did not maintain documentation of the work performed by Professor Halper or any communication that ONA personnel had with Professor Halper.” As a result, according to the inspector general, ONA staff “could not provide sufficient documentation that Professor Halper conducted all of his work in accordance with applicable laws and regulations.”
Acting Pentagon Inspector General Glenn A. Fine in November 2017 started an investigation into charges that Baker retaliated against a whistleblower who red-flagged “rigged” contracts, including Halper’s. Another $11 million in contracts under scrutiny went to the Long Term Strategy Group (LTSG), which is run by a schoolmate of Chelsea Clinton, whom she has referred to as her “best friend.”
According to the whistleblower’s attorney, “Baker’s interest was his awareness of the LTSG-Clinton connection; his presumptive desire to exploit that to his advantage in the event of a Clinton election win; and the fact that contractors like LTSG served as a lucrative landing pad for ONA retirees.”
The attorney charged that Baker’s claims about the whistleblower were “demonstrably false,” calling Baker “partisan and highly vindictive.”
At the time, Richard Perle, Ronald Reagan’s former Assistant Secretary of Defense, called Baker “a shallow and manipulative character that should have gone with the change in administration.” Perle further charged that the whistleblower “clearly was the target, for political reasons, of an effort to push him out of government,” saying “he’s a Trump loyalist, and it was launched and sustained by an Obama holdover.”
That inquiry is being carried out by the inspector general’s Investigations of Senior Officials Directorate.
Raising additional questions, a 2016 report further revealed that the ONA had failed to produce the top-secret net assessments the office was established to conduct for more than 10 years, even with a yearly budget approaching $20 million.
Baker was named as ONA director on May 14, 2015, during the Obama administration. A contemporaneous report called his appointment “part of a wave of new Pentagon personnel moves in recent days, senior-level officials who will outlast President Obama’s final term in office.” Baker replaced Andrew W. Marshall, nicknamed “Yoda” for his “wizened appearance, fanatical following in defense circles, and enigmatic nature.” Obama Defense Secretary Ash Carter, in selecting Baker, “passed over several of Marshall’s acolytes who were in the running for the position.”
The House Judiciary and Oversight committees—which interviewed almost two dozen witnesses—concluded in December 2018 that the Obama Justice Department treated Trump and Clinton unequally, affording Clinton and her associates extraordinary accommodations, while potentially abusing surveillance powers to investigate Trump’s associates.
Jacqueline Deal, president of LTSG, wrote in an email to The Epoch Times: “My colleagues and I began performing work in support of the Office of Net Assessment during the George W. Bush administration, over a decade before the office’s current director was appointed. … None of the awards received by LTSG from the Department of Defense resulted directly or indirectly from the actions or influence of Secretary [Hillary] Clinton. Any statement or implication otherwise is false.”
Most desks may be quietly emptying ahead of the holiday but there was more than enough traders to gobble up today’s 7Y treasury auction.
In the week’s last coupon auction which due to a truncated holiday schedule took place one day earlier than normal, the US Treasury sold $32 billion in 7 Year notes, which printed a t a high yield of 1.719%, right on the screws with the When Issued, and up from 1.657% in October. This was also the fourth consecutive month of rising 7Y auctton rates, although as recently as July, the 7Y stopped just shy of 2%.
The Bid to Cover of 2.442 was just above the six auction average of 2.35, and was just below last month’s 2.457.
The internals were most impressive, however, with Dealers taking down 20.3%, in line with last month’s 20.0%, and with Directs taking down just 10.1%, the lowest since October 2018, Indirects were left with 69.6%, the highest since January 2018.
The strong auction came as the 10Y yield jumped as much as 3bps earlier following the stronger than expected Q3 GDP and capital goods data; that said, the morning’s modest concession was enough to build up substantial demand for the paper, and 10Y rates dipped modestly after the impressive auction.
Here’s How Reuters Gamed A Poll To Show Rising Support For Trump Impeachment
After several major polls revealed a sharp decline in support for impeaching President Trump in the wake of unconvincing public testimony by aggrieved bureaucrats (and at least one House Democrat publicly opposing the move), Reuters/Ipsos now claims support for impeachment has increased.
The latest poll, conducted on Monday and Tuesday, found that 47% of adults in the United States felt Trump “should be impeached,” while 40% said he should not.
The result, combined with Reuters/Ipsos polling over the past several weeks, showed that the number of Americans who want to impeach the president increasingly outnumbers those who do not. –Reuters
The problem? Reuters sampled a disproportionate number of Democrats. Buried at the bottom of their report, they disclose:
The Reuters/Ipsos poll was conducted online, in English, throughout the United States. It gathered responses from 1,118 adults, including 528 Democrats, 394 Republicans and 111 independents. It has a credibility interval, a measure of precision, of 3 percentage points.
In other words, Reuters sampled more Democrats than Republicans and independents combinedto arrive at their conclusion. They also reveal that ” about eight in 10 Democrats [were] supportive of impeaching Trump, and eight in 10 Republicans opposed,” and that seven in 10 Republicans felt the House impeachment inquiry had not been conducted fairly.
Moreover, “Only two in 10 [Republicans] said an inquiry would be justified for a president who uses his powers for unfair political advantage over an opponent, as Trump is accused of doing.”
Reuters being Reuters…
As we noted during the 2016 US election, Reuters/Ipsos wasoversampling Democrats when they found that Hillary Clinton had a giant lead over Donald Trump – using a poll that sampled 44% Democrats and 33% Republicans.
But hey, Adam Schiff needs something to back his claim that support for impeachment has grown “dramatically” over the past two months.
Adam Schiff says that public support for impeachment has grown dramatically in the past two months.
He conveniently left out the polls from this week showing a decrease in support, especially among independents, after finally allowing public testimonies. pic.twitter.com/rLalX1PEqb
Brazil, Russia, India, China and South Africa, or the BRICS economic bloc, are engaging in discussions to issue cross-national digital money in order to reduce the dependence of their economies on the United States, as reported by Cointelegraph on Nov. 14. What will the new cryptocurrency look like, how does the BRICS group plan to use it and are there any existing projects underway that seek to achieve a similar goal of independence on such a high level?
BRICS is the largest geopolitical block of countries, spanning three continents and wielding substantial economic power in global affairs. As of 2018, the five nations of the BRICS block had a combined nominal gross domestic product of $40 trillion, or about 23.2% of the gross world product.
However, such economic power does not come without competitive penchants from other nations that are vying for the markets that BRICS nations cater to. The greatest competition comes from the European Union and the U.S.
The political experience of recent years has shown that BRICS countries’ diplomacy has arguably failed in alleviating international sanctions, especially in politically sensitive markets such as the arms and the energy carriers markets. However, advances in technology are here to help out where politics cannot, as blockchain and digital assets have the potential to open entirely new horizons for finance.
The idea of a single cryptocurrency as a means of payments and value transmission is not a new one, but it is one that is being actively purported not only in countries like Venezuela with its Petro, but also among BRICS countries. The advantages of a single cryptocurrency as a universal means of settlements among BRICS nations would solve many of the problems they face on the global economic market.
A means of circumventing U.S. sanctions
The BRICS Business Council discussed creating a common cryptocurrency as a potential solution to these problems during the 11th BRICS summit that was held in Brazil on Nov. 13–14, according to reports that cite Kirill Dmitriev, a member of the council. Dmitriev, who is the director-general of the Russian Direct Investment Fund, went on to say that an efficient BRICS payment system could be used to stimulate settlements between the countries while reducing the use of the U.S. dollar for these purposes.
It was also reported that the new system may become an alternative to the international payment mechanism SWIFT to facilitate trade with countries under U.S. sanctions.
Dmitriev also noted that in recent years, the share of U.S. dollars payments made between the BRICS countries has significantly decreased. In Russia, for example, over the past five years, the share of USD in foreign trade transactions fell from 92% to 50%, while those made in the Russian ruble rose from 3% to 14%.
At the same time, the potential for reducing the U.S. dollar’s dominance is still great, according to macroeconomic analyst Oleg Dushin, who told Russian media outlet BFM that such could be the case if Russia and India changed the currency they use to make payments between each other.
Dushin also said that Russia and China have already stopped using U.S. dollars in half of their mutual settlements and that there is currently a general trend of driving the dollar out of the international payments system. This, according to the expert, will help BRICS countries weaken the influence of the dollar in the global monetary system and reduce the risk of payments being frozen by Washington.
Denis Smirnov, a blockchain consultant from Russia, noted to BFM the convenience and reduction of transaction costs as some of the advantages of creating a single cryptocurrency system for the BRICS countries, calling it an alternative to bonds.
Commenting on the possibility of BRICS countries using a single cryptocurrency, Vladimir Rozhankovsky, an expert at the International Financial Center, told BFM:
“If it is possible to reduce currency risks, then it is better to carry out trading payments directly, and not through the purchase of dollars — this is obvious. The vast majority of more or less large global economies are now working on this issue.”
Peg to gold, not the U.S. dollar
While it is still unknown what the BRICS cryptocurrency will look like exactly, experts are discussing what it could potentially be tied to. Commenting on the possible options that the international cryptocurrency may be tied, Elina Sidorenko, the head of the Russian State Duma’s working group on cryptocurrency issues, said that there are several options on the table.
For example, it could be tied to the value of another cryptocurrency, she told Russian media outlet Dp, “but in this case, it’s impossible to avoid either the continuation of the U.S. dollar’s monopoly,” or it can be pegged to the price of a raw material or a good, but then the risk of market manipulation becomes a threat. She concluded:
“The third option is a link to gold, and taking into account the latest Basel Accords, such a decision seems very convincing and timely.”
Olinga Taeed, a council member and expert advisor at the China E-Commerce Blockchain Committee, told Cointelegraph that the Chinese have been researching the possibility of issuing a gold-backed token due to the country’s access to natural mineral reserves in Africa through China’s Belt and Road Initiative. He went on to add:
“More recently frictionless international trade has come to the fore with DLT looked upon as a possible solution for Brexit for example, replacing the usual 5-10 year gestation period. So the thinking is well rehearsed but what is new here is the willingness to enact it and for evidence of this there is absolute clarity. Trump has made transparent the long established use of the financial instrument of the dollar to pressurise Iran, Russia, China, etc for non-financial gain.”
Russia seeks an alternative to SWIFT
Russia has been the target of sanctions since 2014. As a result of multiple economic restrictions, Russian authorities have been considering the possibility of creating alternatives to SWIFT.
One of them — the System for Transfer of Financial Messages, or SFPS — is reportedly being used in 18% of money transfers in the country, and foreign financial organizations began to join SPFS in 2018. However, in April, Russian Finance Minister Anton Siluanov noted that SPFS is not a full-fledged replacement for SWIFT and that it is unlikely to become one in the near future.
Now, the Russian government is considering another alternative: a national cryptocurrency secured by gold. Elvira Nabiullina, head of the Central Bank of Russia, said that such a currency could be used to carry out settlements with other countries for trade transactions. However, Nabiullina is also of the opinion that it is more important to develop international settlements facilitated by national currencies rather than crypto.
The sanctions had blocked at least 20% of Russia’s defense transactions in 2018 due their tether to the U.S. dollar. Though Russian authorities are gradually moving toward settlements in national currencies with BRICS states, the idea of a unified cryptocurrency is being openly discussed as an effective, transparent, untraceable and stable instrument for circumventing U.S. sanctions and decreasing dependence on the U.S. dollar.
BRICS states would be able to disregard any exchange rate differences in settlements in a single cryptocurrency, and Russia would gain solid support for its national currency — the ruble — which suffered a twofold drop in value.
China considering a national crypto to bypass U.S. sanctions
China is the leading nation of the BRICS bloc in terms of GDP and the most open nation when it comes to discussions about blockchain implementation. China is intent on accelerating the development of its own central bank-backed digital currency and is working toward the integration of blockchain technologies into other important financial mainstays of the country, such as Alibaba, Tencent and various banking institutions.
Such hasty development could in part be the result of a heated debates about Facebook’s Libra coin. Chinese analysts fear that the development of a global digital currency by a company, which is regarded to have strong affiliations with the U.S., would threaten the existence of national currencies and weaken their exchange rates. Such a stablecoin backed by the U.S. dollar may increase the power of its penetration into the global economy and thus solidify the political positions of Washington.
Chinese authorities are interested not only in the development of a unified cryptocurrency for settlements with BRICS countries but also in the launch of a national cryptocurrency that would serve as a shield against the economic adversary across the Pacific.
Brazil has a positive stance on using stablecoins
Brazil is demonstrating the highest rate of Bitcoin (BTC) trade in Latin America. Such broad penetration of digital assets in Brazil makes it both fertile ground for the development of a national cryptocurrency and firm ground to support for a unified BRICS cryptocurrency for settlements with member states.
Given the country’s positive stance toward blockchain, Brazilian authorities seem to be open to discussions with stablecoin issuers. One recent example is that of the Mile Unity Foundation, whose representatives met with members of Brazil’s Ministry of Industry, Foreign Trade and Services to discuss the use of the XDR stablecoin for international transfers of funds.
Given that Brazil had an export/import balance of $219 billion to $140 billion in 2017 alone, the potential for using a single cryptocurrency with BRICS member states for increasing such figures is immense.
Although Brazil does not suffer from sanctions, its main trade partners in technology, such as Russia, are subject to them. Using the U.S. dollar for mutual settlements between countries leaves little room to maneuver.
India is fighting with poverty and corruption
The Indian authorities are reportedly discussing the introduction of a national digital currency. There may be significant reasons for such a move, not the least of which being the alleviation of the poverty that many of the country’s 1.3 billion are languishing in.
The Reserve Bank of India is pushing for such a digital currency backed and regulated by the central bank as legal tender. The RBI hopes that blockchain can alleviate the issue with corruption, which is rampant in India, and significantly reduce the dependence of millions of Indians working abroad on financial intermediaries in cross-border transfers.
The Indian authorities are also proponents of a national digital currency for reducing the population’s reliance on other digital currencies. Given India’s stance within BRICS as a major buyer of Russian arms and as one of the most important energy trade partners, having mutual settlements in a unified digital currency would open up entirely new prospects for trading.
South Africa is making money transfers accessible for citizens
The possibility of issuing a national digital currency has even been discussed by the South African Reserve Bank, which could allow for its citizens to freely transact without the need for banks.
Given the staggering number of unbanked individuals (estimated to be around 11 million people) and those without any form of official IDs in the country, the availability of a national digital currency would help millions of citizens gain access to financial services and boost economic development. South Africa is just as bound to the U.S. dollar as all the other BRICS members in its settlements with China and Russia, meaning that is also feels the impact of the sanctions regime.
Experts say
According to experts, the idea of creating a digital currency for BRICS may turn out to be highly viable, given the transition of the world from a monopolar political model to a multipolar one and the backdrop of a shift in the economy from traditional financial institutions to trading platforms.
And the main beneficiary so far could be China, which is interested in expanding its sales markets amid a trade war with the U.S. Smirnov told BFM that he believes that over time, such systems will become more widespread:
“For example, for the past two or more years a consortium of several European banks has been testing its own mutual settlement solution that works outside the SWIFT system and allows for interbank settlements.”
The individual national currencies of the BRICS countries have been dropping against the U.S. dollar over the past 10–20 years, but it is unclear whether a unified BRICS payment system would reverse this trend. However, it is possible that the U.S. dollar could be weakened if the share of settlements in dollars significantly decreases around the world.
Among other possible risks that may be associated with the idea of issuing a gold-pegged international digital currency, head of research at investment company Nord Capital Vladimir Rojankovsky noted the deregulation of the market and the possibility of manipulation. He told Russian media outlet Regnum, “Such an implementation of this project does not imply the involvement of any distinguished party, which is a living oversight body.”
Speaking about the further development of the BRICS initiative, Teemo Puutio, an expert in compliance and an adjunct instructor at New York University School of Professional Services, told Cointelegraph:
“Whether the BRICS backed currency would ultimately succeed in gaining traction would largely depend whether it actually facilitates trade instead of adding another layer of technological complexity for the end user. […] BRICS are not alone in this however and it remains unclear whether the dominant digital currency of the future will be public such as the e-Euro or digital yuan or private, like Libra.”
Evacuation Ordered After Apocalyptic Fireball Erupts Over Texas Town In Chemical Explosion
More details are emerging after a massive chemical explosion at a southeast Texas refinery in the early hours of Wednesday ripped through the plant and shattered windows across nearby residential areas of Port Neches, which lies about 90 miles east of Houston. People in homes that are miles away from the blast site reported windows, doors, and rooftops being blown out by the initial shock wave from the blast.
All residents within a half mile of the burning chemical plant have been issued a mandatory evacuation order, and so far plant operator TPC said its more than 175 full-time employees and 50 contractors are all accounted for, though a handful were transported to the hospital for burns and other injuries, at least one in serious condition.
Screenshot from local video of the Nov. 27 Port Neches blast.
Some of the eyewitness accounts of the chemical explosion collected by NBC News convey at atmosphere of confusion when the first blast occurred at about 1am, resulting in a blaze that overtook much of the plant.
Currently the emergency is considered “ongoing” but response crews say they will soon bring it under control.
“Their doors were blown open… doorknobs themselves were shot across rooms,” one resident said. “We didn’t know what had exploded and what gasses were in the air,” the woman said, and described a panic scramble of nearby residents to flee the area: “I’ve never seen the traffic like that ever.”
I was at a friends house less than half a mile from the explosion. I have never in my life experienced something like this. I am absolutely sick. I have no words. My prayers go out to everyone at TPC, and all of the first responders. pic.twitter.com/BSHMuh9qS8
And another eyewitness identified as Omar Hamza described a “loud boom” and “bright flash” which was followed by a deafening explosion.
“We waited for a little bit and we kind of looked outside and everyone was running around and freaking out.” He continued, “So we just grabbed the important stuff we needed — I left a note on the door and we left.”
Jefferson County Judge Jeff Branick, who lives within the evacuation zone, described an apocalyptic where he initially thought they were under attack:
Branick, who lives less than a mile away from the explosion site, said his wife thought someone was shooting at their home when she heard the blast.
“I ran out with my pistol,” the judge said, before he realized it was a refinery explosion.
Texas has been the site of other major explosions, including a 2013 fertilizer plant blast in the rural town of West that killed 15 people and wiped out hundreds of homes.
From London to Washington to Sydney, policy makers are puzzling over why workers’ pay has been rising only slowly even though official unemployment is at its lowest levels in decades.
That is surprising because changing jobs is often lucrative. U.S. workers who switch jobs gain 4% more pay on average than those who stay put, according to recent research by Giuseppe Moscarini, a labor economist at Yale University.
It is a crucial issue for central banks as they figure out how much to cut interest rates to support their softening economies. One of their key economic models, the so-called Phillips curve, predicted inflation would rise as unemployment fell. That hasn’t happened lately. Inflation remains below central banks’ targets across developed economies.
“Central banks should pay more attention to job switching and what it reveals about people’s preferences for the jobs they have,” Mr. Moscarini says.
The argument runs like this: Workers can demand higher wages only if they have outside offers, regardless of the unemployment rate. People who switch jobs tend to find work that better utilizes their skills, and therefore pays more. Job switchers also improve the bargaining position of workers who stay in their jobs, by encouraging employers to pay more to retain them.
Here’s a puzzle. Unemployment is at a historically low level, yet nominal wage growth is not even back to prerecession levels (see, for example, the Atlanta Fed’s own Wage Growth Tracker). Why is wage growth not higher if the labor market is so tight? A recent article in the Wall Street Journal posited that the low rate of job-market churn likely explains slow wage growth. Switching jobs is typically lucrative because it tends to be going to a job that better uses the person’s skills and hence offers higher pay. Job switchers can also help improve the bargaining position of job-stayers by inducing employers to pay more to retain them.
Fujita and his coauthors discovered a potential problem with these data, noting that the CPS doesn’t ask the same-employer question of all surveyed people who were employed in the prior month. Importantly, the incidence of missing answers has increased dramatically since the 2006.
BLS Question Revision
The Shigeru Fujita, Guiseppe study noted a “dramatic and persistent jump in January 2007” of people staying in the same job.
The study reports “We now provide evidence that the likely culprit is another seemingly small change in the CPS interview protocol, the Respondent Identification Policy (RIP), introduced in that month.”
Thus, there is no sudden dramatic change at all.
Jobertson concludes “The adjusted job-switching rate is only moderately lower than it was 20 years ago and has fully recovered from the decline experienced during the Great Recession. Although a decline in job switching might be a factor in the story behind low wage growth, based on this adjusted measure it doesn’t seem like the dominant factor. The low wage growth puzzle remains a puzzle. “
The Wall Street Journal article noted “weak wage growth” without posting any supporting data at all.
Instead of attempting to figure out why wage growth is weak, let’s ask the correct question:
Is Wage Growth Really That Weak?
Is nominal wage growth weak because inflation is weak?
Of course, this pressumes one believes the CPI is an accurate measure.
Those those in school, those who have student loans, those wanting to buy a home, and those who buy their own health insurance will certainly scoff at purported measures of inflation.
Housing Bubble Reblown: Last Chance for a Good Price Was 7 Years Ago
Housing prices are no longer in the CPI. They should be.
I understand the argument that houses are a capital expense. But they are also a fundamental indicator of overall inflation.
Prior to 1997, home prices and rent rose at about the same rate. Since then there have been wild difference. The Fed has repeatedly ignored housing inflation.
Two Inflation Indexes
In 2013, I proposed calculation the CPI by substituting the Home Price Index (HPI) for Owner’s Equivalent Rent. That chart shows the result.
In mid-2005, inflation, by my measure was running near 7% and the Fed was oblivious.
With that necessary diversion aside, let’s return to the alleged “mystery” with a look at the Phillips Curve.
Phillips Curve Nonsense
The WSJ article says “One of their key economic models, the so-called Phillips curve, predicted inflation would rise as unemployment fell. That hasn’t happened lately.”
Anyone citing the long-discredited Phillips Curve as an indicator is sure to get a blast from me.
The Fed study concluded “In sum, a careful look at the wage Phillips curve across states yields little evidence supporting the contention that wage growth sharply rises as the labor market reaches especially tight conditions.”
Head Scratching
The Phillips Curve never worked and never will.
Given that it is random, there will be random periods in which it appears to work and random periods that have economists scratching their heads.
Head scratching is happening again right now over alleged “mysteries” of weak wage growth coupled with fatally flawed studies on workers staying put.
Oil prices roller-coastered overnight after a bigger than expected crude build (from API) sent prices lower before yet more trade-deal optimism sent prices higher this morning, before sliding back to pre-API levels ahead of the official data.
“Despite national growth in gasoline inventories, which are quite common in the autumn as refiners emerge from maintenance, concerns are growing for the extended impact of the loss of the PES refinery in Philadelphia,” Tom Finlon, director of Energy Analytics Group Ltd in Wellington, Florida, said in a note.
API
Crude +3.639mm
Cushing -516k
Gasoline +4.378mm
Distillates -665k
DOE
Crude +1.57mm (-878k exp)
Cushing -97k
Gasoline +5.132mm (+800k exp) – biggest build since Jan 2019
Distillates +725k
After API reported big surprise builds in crude and gasoline, official data showed a smaller crude build of 1.57mm barrels and a huge gasoline build of 5.13mm barrels (also Distillates built for for the first time in 10 weeks)…
Source: Bloomberg
Overall crude inventories are at their highest since July.
US crude production continues top rise to new record highs ignoring the ongoing collapse in the US oil rig count…..
Source: Bloomberg
Notably, Bloomberg points out that output is up around 760,000 bpd this year. That’s a stark difference from the gain of more than 2 million bpd from December 2017 to December 2018.
WTI hovered around $58.30, pre-API levels, ahead of the DOE data.
Finally, Bloomberg Intelligence’s Senior Energy Analyst Vince Piazza explains that “actions will speak louder than words at next week’s OPEC+ meeting, with tighter compliance to output curbs and an extension of the cuts beyond their March expiration needed to inspire the market. A trade truce between China and the U.S. is less of a factor, as negotiations are likely to be drawn out.”
Life expectancy trends downward for three years in a row. A recent reversal in upward longevity trends is being driven by young and middle-aged adults, according to new research published in the Journal of the American Medical Association (JAMA). The findings fall in line with other recent research on U.S. longevity and public health, placing the bulk of the blame for younger deaths on suicide, drug overdoses, and alcohol abuse, along with “a diverse list of organ system diseases.”
Researchers Steven H. Woolf and Heidi Schoomaker looked at U.S. mortality data published from January 1990 through August 2019. They find that U.S. life expectancy peaked in 2014, at 78.9 years old, and has been declining since.
For 2017, life expectancy was down to 78.6 years.
“The recent decrease in U.S. life expectancy culminated a period of increasing cause-specific mortality among adults aged 25 to 64 years that began in the 1990s, ultimately producing an increase in all-cause mortality that began in 2010,” they write in the JAMA paper. “During 2010-2017, midlife all-cause mortality rates increased from 328.5 deaths/100 000 to 348.2 deaths/100 000. By 2014, midlife mortality was increasing across all racial groups, caused by drug overdoses, alcohol abuse, suicides, and a diverse list of organ system diseases.”
These trends were strongest in New England (up 23.3 percent in New Hampshire, 20 percent in Maine, and 19.9 percent in Vermont) and what they term the Ohio Valley (up 23 percent in West Virginia, 21.6 percent in Ohio, 14.8 percent in Indiana, and 14.7 percent in Kentucky). “The increase in midlife mortality during 2010-2017 was associated with an estimated 33,307 excess U.S. deaths, 32.8% of which occurred in four Ohio Valley states,” the authors write.
Between 1959 and 2016, U.S. life expectancy rose from 69.9 years to 78.9 years, increasing the fastest between 1969 and 1979. Then:
Life expectancy began to advance more slowly in the 1980s and plateaued in 2011 […] The National Center for Health Statistics reported that US life expectancy peaked (78.9 years) in 2014 and subsequently decreased significantly for 3 consecutive years, reaching 78.6 years in 2017. The decrease was greater among men (0.4 years) than women (0.2 years) and occurred across racial-ethnic groups; between 2014 and 2016, life expectancy decreased among non-Hispanic white populations (from 78.8 to 78.5 years), non-Hispanic black populations (from 75.3 years to 74.8 years), and Hispanic populations (82.1 to 81.8 years).
In addition to drugs and alcohol, other lifestyle factors can be blamed for the rise in younger deaths:
Between 1999 and 2017, age-adjusted midlife mortality rates for hypertensive diseases increased by 78.9% (from 6.1 deaths/100 000 to 11.0 deaths/100 000) and for obesity increased by 114.0% (from 1.3 deaths/100 000 to 2.7 deaths/100 000).
Early studies reported increasing midlife mortality from heart disease and lung (notably chronic pulmonary) disease, hypertension, stroke, diabetes, and Alzheimer disease, but the trend appears to be even broader.
As Ron Bailey pointed out yesterday, however, the JAMA study isn’t all bad news:
Some good news is that mortality rates continued to fall at the tail ends of the age distribution. Between 1999 and 2017, the infant mortality rate dropped from 736 to 567 per 100,000 births while mortality among children ages 1 through 14 declined from 22.9 to 16.5 deaths per 100,000. Older Americans are living longer too: The mortality rate among adults between the ages of 65 and 84 fell from 3,774.6 to 2,875.4 deaths per 100,000.
Considering the bulk of the decline in longevity comes from “adults with less education and in rural areas or other settings with evidence of economic distress or diminished social capital,” the authors of the study suggest things like prescription opioids are to blame. But as Bailey writes:
They fail to note the unintended consequences of the federal government mandate for an abuse-deterrent reformulation of prescription opioids that resulted in the massive rise in overdose deaths as users switched to street heroin and fentanyl.
Due process shouldn’t conflict with #MeToo goals. David Harsanyi calls foul on the idea that due process somehow stands in opposition to holding people accountable for sexual harassment and assault. From a Monday article (not an opinion piece!) in The Washington Post:
While the #MeToo movement brought increased public scrutiny to harassment and assault, the Trump administration’s proposal pushes the pendulum in the reverse direction by strengthening due process protections for those accused of offenses.
Writes Harsanyi:
If on the one side of the pendulum is increased scrutiny over sexual assault, then the “reverse” can’t be the right to due process. The two, in fact, aren’t even on the same pendulum. Due process concerns itself with procedure, not substance. It allows “emotionally charged conflicts,” as the Post helpfully puts it, to be adjudicated in an impartial manner. The opposite of increased public scrutiny to harassment and assault is less scrutiny, not fewer rights for the accused. It’s alarming that this even has to be debated.
The abject stupidity of the war on vaping. I’m in Spectator USA this week on the ways in which anti-vaping advocates are emulating crusaders against “Big Tobacco,” but without actually protecting anyone’s health. New York and California are both suing JUUL, for instance. A lot of politicians are keen on banning flavored vaping products (for the children, obviously), something leaders in New York City and Massachusetts voted for just last week. Meanwhile:
The American Medical Association (AMA) is now recommending a “total ban on all e-cigarette and vaping products” that aren’t classified by the U.S. food and Drug Administration as “smoking cessation” aids.
Interestingly, President Donald Trump has emerged as a rare realist when it comes to vaping. He told reporters last Friday that if the U.S. banned flavored nicotine vaping products, they were just “going to come here illegally.” Trump continued:
That’s the one problem I can’t seem to forget. You just have to look at the history of it. Now, instead of having a flavor that’s at least safe, they’re going to be having a flavor that’s poison.
It’s been black-market THC vapes causing illnesses and deaths, with most cases linked to products that used synthetic vitamin E as a filler.
To respond to that set of facts by banning flavored nicotine vaping products is like the government responding to counterfeit multivitamins killing people by banning all supplements except Riboflavin. It makes no sense.
A California county’s ban on marijuana delivery now has the state attorney general’s office joining in—against the county. The state has been fighting against locales setting their own marijuana regulations and rules.
Next week is Reason‘s annual webathon, where we ask you to support our journalism! We’ll be taking your questions on a special Reason Roundtable podcast on December 3. Please submit your questions for Katherine Mangu-Ward, Nick Gillespie, Matt Welch, and Peter Suderman to podcasts@reason.com.
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Imperialist propaganda firm Bellingcat has published a response to the ever-expanding OPCW scandal, and it’s got to be seen to be believed.
Before we begin I should highlight that Bellingcat is funded by the National Endowment for Democracy, which according to its own cofounder was set up to do overtly what the CIA had previously been doing covertly, namely orchestrating narrative management geared toward the elimination of governments which refuse to comply with US interests. NED is funded directly by the US government, which means that Bellingcat is funded by the US government via an organization set up to promote imperialist regime change agendas. Bellingcat is also funded by Open Society Foundations, another imperialist narrative management operation.
Syria has been the target of what may be the most sophisticated propaganda campaign in history, and Bellingcat has been consistently rallying behind even the most transparently ridiculous tools of this campaign. This includes the notorious Bana Alabed psyop which at its height saw CNN staging a fake, scripted interview featuring a seven year-old girl assigning blame to Bashar al-Assad for an alleged sarin gas attack in Khan Shaykhun. Bellingcat’s stellar investigative work (which has been praised in fawning puff pieces by mainstream outlets like The Guardian and The New Yorker) concluded that this obvious propaganda construct was in fact nothing other than a little girl and her mother independently composing viral tweets, giving interviews and authoring books about how the Syrian government must be toppled via western interventionism.
Bellingcat’s latest phenomenal report on how you’re supposed to think about important geopolitical disputes, titled “Emails And Reading Comprehension: OPCW Douma Coverage Misses Crucial Facts”, addresses the leaked OPCW email which was recently published by WikiLeaks and various other outlets revealing that the OPCW omitted crucial information from its Douma report which indicated that a chemical weapons attack was unlikely to have occurred. I encourage you to go and check out Bellingcat’s new masterpiece for yourself. Don’t worry about giving them clicks; that’s not where they get their money.
The first thing you’ll notice about Bellingcat’s article is that at no point does it even attempt to address the actual inflammatory comments within it, such as the OPCW whistleblower’s assertion that the samples tested where a chlorine gas attack is alleged to have occurred in April 2018 contained levels of chlorinated organic compounds which were so low that it would be unreasonable to claim with any confidence that a chlorine gas attack had occurred at all. The whistleblower writes in the leaked email to the OPCW cabinet chief that the levels “were, in most cases, present only in parts per billion range, as low as 1–2 ppb, which is essentially trace quantities.”
As we discussed previously, early skeptics of the establishment Douma narrative highlighted the bizarre fact that when the OPCW published its Interim Report in July of last year its report contained no information about the levels at which the chlorinated organic chemicals occurred. Chlorinated organic chemicals occur at trace levels in any industrialized area, so they are only indicative of a chlorine gas attack when samples test at high levels. The email said they didn’t. The OPCW omitted this in both its Interim and Final Reports.
The whistleblower told journalist Jonathan Steele that the levels found “were comparable to and even lower than those given in the World Health Organisation’s guidelines on recommended permitted levels of trichlorophenol and other COCs in drinking water.”
“Had they been included, the public would have seen that the levels of COCs found were no higher than you would expect in any household environment”, the whistleblower said.
“The main point is that Chlorine gas degrades rapidly in the air,”Steele said.
“So coming in two weeks later, you wouldn’t find anything. What you would find is that the gas contaminates or affects other chemicals in the natural environment. So-called ‘chlorinated organic chemicals.’ The difficulty is they exist anyway in the natural environment and water. So the crucial thing is the levels, were there higher levels of chlorinated organic chemicals found after the alleged gas attack than there would have been in the normal environment?”
“When they got back to the Netherlands, to The Hague where the OPCW has its headquarters, samples were sent off to designated laboratories, then there was a weird silence developed,” Steele continued. “Nobody told the inspectors what the results of the analysis was. It was only by chance that the inspector found out through accident earlier the results would come in and there were no differences at all. There were no higher levels of Chlorinated organic chemicals in the areas where the alleged attack had happened where there is some suspicious cylinders had been found by opposition activists. So it didn’t seem possible that there could have been a gas attack because the levels were just the same as in the natural environment.”
Bellingcat simply ignores this absolutely central aspect of the email, as well as the whistleblower’s point about the symptoms of victims not matching chlorine gas poisoning.
“In this case the confidence in the identity of chlorine or any choking agent is drawn into question precisely because of the inconsistency with the reported and observed symptoms,” the whistleblower writes in the email. “The inconsistency was not only noted by the FFM team but strongly noted by three toxicologists with expertise in exposure to CW [Chemical Weapons] agents.”
Bellingcat narrative management reaches bargaining stage on road to acceptance, now emphasising that OPCW final report downgraded its conclusion to suggest merely “possible” use of chlorine.
Bellingcat says nothing about these revelations in the email, and says nothing about the fact that the OPCW excluded them from both its Interim Report in July 2018 and its Final Report in March 2019, the latter of which actually asserted the exact opposite saying there was “reasonable grounds that the use of a toxic chemical as a weapon took place. This toxic chemical contained reactive chlorine. The toxic chemical was likely molecular chlorine.”
Bellingcat completely ignores all of these points, which are literally the only reason any of this is in the news at all, instead opting to make silly, pedantic arguments that the text of the email and the Interim and Final Reports indicate that some of the whistleblower’s concerns appear to have been partially addressed by OPCW leadership in its publications. To make this argument, Bellingcat highlights how some of the wording in the reports was changed to appear a bit less conclusive, such as changing “likely” to “possible” and changing “reactive chlorine containing chemical” to “chemical containing reactive chlorine”.
By highlighting these barely-significant changes Bellingcat attempts to spin the narrative that there was no internal OPCW coverup of its investigators’ findings at all, which is of course invalidated by the fact that its Final Report concluded that a chlorine gas attack had taken place despite the whistleblower clearly stating that there is no basis upon which to conclude this. It’s also obviously invalidated by the fact that not one but two whistleblowers have come forward, meaning they plainly do not feel as though their concerns were met.
“Ian and I wanted to have this issue investigated and hopefully resolved internally, rather than exposing the failings of the Organisation in public, so we exhausted every internal avenue possible including submission of all the evidence of irregular behaviour to the Office of Internal Oversight,” the whistleblower told Steele.
“The request for an internal investigation was refused and every other attempt to raise our concerns was stone walled. Our failed efforts to get management to listen went on over a period of nearly nine months. It was only after we realised the internal route was impossible that we decided to go public”.
“Ian” is Ian Henderson, the OPCW ballistics expert whose Engineering Assessment was leaked this past May. Henderson concluded that, contrary to what the OPCW’s Final Report strongly implies, the cylinders found at the scene in Douma were more likely to have been manually placed there, i.e. staged. The anonymous whistleblower informed Steele that all but one of the OPCW’s investigative team agreed with Henderson’s assessment. This too was left out of all OPCW reports, and Bellingcat’s piece completely ignores it, instead writing only that “Three independent analyses by experts in three different countries were carried out, and all reached complimentary conclusions: the damage at the impact sites is consistent with the cylinders having fallen from height.”
With the temerity only an NED paycheck can get you, Bellingcat argues that this vapid pedantry which has no bearing on the actual story whatsoever completely invalidates all reporting on the OPCW scandal.
“Although this letter appears to be at least superficially damaging to the OPCW, after reading the actual reports published by the OPCW it is clear that this letter is outdated and inapplicable to the final Douma report,” Bellingcat concludes.
“If the people covering this story had actually taken the time to read the letter and the FFM reports, they may well have chosen to publicize it in a very different manner.”
Google has helpfully made sure to place Bellincat’s assertive-sounding gibberish at the very top of news results which come up if you do a search for “OPCW” today:
Empire apologists have taken this ridiculous, nonsensical line of argumentation as gospel and run with it on social media, sharing Bellingcat’s embarrassing faceplant with triumphant, chest-thumping captions.
“Just so all my followers are clear, Tucker Carlson and the merry band of alt left grifter idiots trying to convince you that 1 of the 257 chemical attacks in Syria was a false flag are wrong, again, and never even bothered to read the report they say is wrong,” tweetedNewshour’s Danny Gold.
“So the letter written by the dissenting OPCW employee on Douma investigation was sent two weeks before the interim report was released and nine months before the final one. In the final one, the employee’s concerns were addressed. Where’s the cover up?”tweetedTelegraph’s Josie Ensor.
“WikiLeaks et al are lying to you in defence of the Assad regime,”tweeted odious Syria narrative manager Oz Katerji.
Just so all my followers are clear, Tucker Carlson and the merry band of alt left grifter idiots trying to convince you that 1 of the 257 chemical attacks in Syria was a false flag are wrong, again, and never even bothered to read the report they say is wrong https://t.co/IRJQzC0VaL
“Despite the seemingly scandalous accusation in the leak, Carlson is misrepresenting the nature of the WikiLeaks documents and their significance,” MMFA claims. “Investigative journalists at Bellingcat found that the leaked letter was in fact referring to an ‘interim report’ issued in July of 2018, before the OPCW released its final conclusions. A side-by-side comparison shows that the concerns addressed in the letter ‘are present, or else are in modified form, in the final report.’”
Which is of course false, as explained above.
MMFA’s other claims are nothing other than simple regurgitation of the very reports that are now being invalidated by the leaks that Tucker Carlson highlighted on his show. Their entire argument boils down to “This old information is in contradiction to that new information,” which is of course the entire bloody point.
Tucker Carlson spreads disinformation about a deadly chemical attack in Syria https://t.co/aFtPwpUtE8
“These claims contradict and misrepresent the available evidence regarding the attack, the conclusions of multiple governments, and they are based on a Syrian and Russian misinformation campaign seeking to discredit investigators and absolve Assad of responsibility for the atrocity,” MMFA argues, linking to a 2018 BBC article saying Assad was responsible for the Douma incident, a 2018 Guardian article about the US government’s unsubstantiated claim to have secret proof of Assad’s guilt, and a 2018 Guardian article claiming that Russia is wrong about its skepticism of the western Douma narrative, respectfully.
Which is the same as saying “You’re wrong because we disagree with you. Here is evidence of our disagreeing with you last year.”
This is the best the spin masters can do, and the OPCW scandal is only going to unfold more. Should be fun.
