Tim Kaine Invokes bin Laden While Trying To Sell Hillary Clinton’s Big ISIS Plan

During a brief exchange about national security at last night’s Vice Presidential debate, moderator Elaine Quijano asked the candidates, “Do you think the world today is a safer or more dangerous place than it was eight years ago? Has the terrorist threat increased or decreased?”

Democratic VP nominee Tim Kaine immediately responded, “The terrorist threat has decreased in some ways, because bin Laden is dead.” He soon segued into selling Hillary Clinton’s plan to defeat ISIS:

First, we’ve got to keep taking out their leaders on the battlefield. She was part of the team that got bin Laden, and she’ll lead the team that will get Abu Bakr al-Baghdadi, the head of ISIS.

Kaine repeatedly invoked the 2011 assassination of Osama bin Laden as evidence that Hillary Clinton’s actions as Secretary of State helped make the world “safer,” and also declared that al Qaeda was all but crippled by the death of bin Laden—despite the fact that he died while holed up in a house in Pakistan with his feuding wives, years after he ceased to be involved in any kind of operational leadership role with al Qaeda.

While Kaine might have a point about the fact that Trump’s pledges to “bomb the shit out of ISIS” and re-institute waterboarding of terror suspects are not much of a plan, the Democratic ticket’s reliance on the go-to line of “We’re going to go after Baghdadi” is a classic example of shallow election-year sloganeering.

Clinton herself promised to go after ISIS’ leader at the first presidential debate, as well as at the Iraq and Afghanistan Veterans of America (IAVA) forum, and many times on the campaign trail. If that’s the number one priority, then it’s worth asking: Is the Obama administration not going after Baghdadi now? Are they just letting ISIS’ leader wander the self-declared Islamic State caliphate free from the threat of U.S. airstrikes?

Of course not, but as noted in The Guardian last month, Clinton intends to put a “concerted focus” on “going after” Baghdadi. But why does anyone believe decapitating the leadership of ISIS would “defeat” them?

Furthermore, reports of al Qaeda’s death have been greatly exaggerated. Though it may not bear much resemblance to the top-down organization bin Laden lead over a decade ago, al Qaeda in the Arabia Peninsula (AQAP) controls a major port city in Yemen—in large part thanks to U.S. ally Saudi Arabia’s war against Iranian-backed Houthi rebels. AQAP also claimed responsibility for the 2015 Charlie Hebdo massacre in Paris and has proven capable of launching terror attacks via smaller cells in Burkina Faso. Other al Qaeda “franchises” control significant amounts of territory in Syria, North Africa, and Somalia.

Even ISIS itself is an offshoot of al Qaeda, and with their billions in oil revenue and U.S.-made weapons pilfered from the Iraqi army and Syrian rebel groups, they seem to be doing just fine without bin Laden around.

In an essay published around the time of the five-year anniversary of bin Laden’s killing last May, the RAND Corporation’s Brian Michael Jenkins wrote that targeting a terrorist group’s leadership can disrupt its operational abilities in the short term, but also noted that a number of studies show taking out terror leaders “affected neither the rate of terrorist attacks nor the likelihood of organizational collapse. And however careful the targeting, such strikes can produce civilian casualties, provoke anger, and incite further terrorist attacks in revenge.” Jenkins concludes, “Was al Qaeda hurt by the demise of its charismatic leader? Certainly. Is the world a safer place because of it? Probably not.”

Ultimately, the more the U.S. engages in bombing foreign countries, the easier it is for any Islamist extremist groups to recruit. Young men born the same year as the 9/11 attacks are now old enough to be commissioned to engage in jihad and are much more likely to be motivated by a family member’s death in a drone strike meant for someone else than by any allegiance to Abu Bakr al-Baghdadi or Osama bin Laden.

When Clinton and her surrogates brag about killing symbolic leaders as “smart power,” we should remember that pithy campaign talking points do not a sound foreign policy make.

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Tim Kaine Invokes bin Laden While Trying To Sell Hillary Clinton’s Big ISIS Plan

During a brief exchange about national security at last night’s Vice Presidential debate, moderator Elaine Quijano asked the candidates, “Do you think the world today is a safer or more dangerous place than it was eight years ago? Has the terrorist threat increased or decreased?”

Democratic VP nominee Tim Kaine immediately responded, “The terrorist threat has decreased in some ways, because bin Laden is dead.” He soon segued into selling Hillary Clinton’s plan to defeat ISIS:

First, we’ve got to keep taking out their leaders on the battlefield. She was part of the team that got bin Laden, and she’ll lead the team that will get Abu Bakr al-Baghdadi, the head of ISIS.

Kaine repeatedly invoked the 2011 assassination of Osama bin Laden as evidence that Hillary Clinton’s actions as Secretary of State helped make the world “safer,” and also declared that al Qaeda was all but crippled by the death of bin Laden—despite the fact that he died while holed up in a house in Pakistan with his feuding wives, years after he ceased to be involved in any kind of operational leadership role with al Qaeda.

While Kaine might have a point about the fact that Trump’s pledges to “bomb the shit out of ISIS” and re-institute waterboarding of terror suspects are not much of a plan, the Democratic ticket’s reliance on the go-to line of “We’re going to go after Baghdadi” is a classic example of shallow election-year sloganeering.

Clinton herself promised to go after ISIS’ leader at the first presidential debate, as well as at the Iraq and Afghanistan Veterans of America (IAVA) forum, and many times on the campaign trail. If that’s the number one priority, then it’s worth asking: Is the Obama administration not going after Baghdadi now? Are they just letting ISIS’ leader wander the self-declared Islamic State caliphate free from the threat of U.S. airstrikes?

Of course not, but as noted in The Guardian last month, Clinton intends to put a “concerted focus” on “going after” Baghdadi. But why does anyone believe decapitating the leadership of ISIS would “defeat” them?

Furthermore, reports of al Qaeda’s death have been greatly exaggerated. Though it may not bear much resemblance to the top-down organization bin Laden lead over a decade ago, al Qaeda in the Arabia Peninsula (AQAP) controls a major port city in Yemen—in large part thanks to U.S. ally Saudi Arabia’s war against Iranian-backed Houthi rebels. AQAP also claimed responsibility for the 2015 Charlie Hebdo massacre in Paris and has proven capable of launching terror attacks via smaller cells in Burkina Faso. Other al Qaeda “franchises” control significant amounts of territory in Syria, North Africa, and Somalia.

Even ISIS itself is an offshoot of al Qaeda, and with their billions in oil revenue and U.S.-made weapons pilfered from the Iraqi army and Syrian rebel groups, they seem to be doing just fine without bin Laden around.

In an essay published around the time of the five-year anniversary of bin Laden’s killing last May, the RAND Corporation’s Brian Michael Jenkins wrote that targeting a terrorist group’s leadership can disrupt its operational abilities in the short term, but also noted that a number of studies show taking out terror leaders “affected neither the rate of terrorist attacks nor the likelihood of organizational collapse. And however careful the targeting, such strikes can produce civilian casualties, provoke anger, and incite further terrorist attacks in revenge.” Jenkins concludes, “Was al Qaeda hurt by the demise of its charismatic leader? Certainly. Is the world a safer place because of it? Probably not.”

Ultimately, the more the U.S. engages in bombing foreign countries, the easier it is for any Islamist extremist groups to recruit. Young men born the same year as the 9/11 attacks are now old enough to be commissioned to engage in jihad and are much more likely to be motivated by a family member’s death in a drone strike meant for someone else than by any allegiance to Abu Bakr al-Baghdadi or Osama bin Laden.

When Clinton and her surrogates brag about killing symbolic leaders as “smart power,” we should remember that pithy campaign talking points do not a sound foreign policy make.

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ISM Services Jumps Most In History Despite “Business Optimism At Lowest Level Since Financial Crisis”

Despite the weakest employment since 2013, Markit's Services PMI bounced modestly in September to 52.3, but "business optimism about the year ahead is at one of the lowest levels seen since the global financial crisis." Following August's crash to the lowest since Feb 2010 (51.4), ISM Servces has exploded to 57.1 – its highest since Oct 2015 – in an epic farce – the biggest jump on record. However, as Market concludes, "even with the latest increase the surveys are indicating that the economy is growing at an annualized rate of only 1%."

This is the biggest MoM jump in ISM Services in history…

 

ISM Respondents:

"Somewhat flat month of overall pricing conditions; however, labor cost and availability remains a concern." (Accommodation & Food Services)

 

"Business is showing a moderate unexpected uptick over last month. YTD business volume is moderately under forecast." (Management of Companies & Support Services)

 

"Macroeconomic issues like Brexit and reduced travel from South America impact summer travel." (Arts, Entertainment & Recreation)

 

"Sales ahead of plan. Net income below plan. Costs running higher than plan. In addition, continued low interest rates impact investment results." (Finance & Insurance)

 

"Affordable Care Act, changes in Medicare and Medicaid causing problems across much of the healthcare and insurance industries. Acquisition helping our company, but also lost a large client that will impact our financials for the next year." (Health Care & Social Assistance)

 

"Solid steady growth." (Professional, Scientific & Technical Services)

 

"Business is [at] an annual high." (Public Administration)

 

"Sales continue [at an] increased pace from last month." (Retail Trade)

 

"We are watching the effects of the Hanjin Shipping issues with regard to cost and availability of Asian imports." (Wholesale Trade)

Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

“Coming hard on the heels of the IMF’s downgrade to the US economic outlook, the upturn in the PMI is a welcome development and suggests that the pace of economic growth gained some momentum in September. However, take a longer look and it’s clear that this is by no means a robust upturn.

 

“Even with the latest increase the surveys are indicating that the economy is growing at an annualized rate of only 1%.

 

 

“The survey responses reveal that a heightened degree of political uncertainty is subduing the economy, manifesting itself in particular in a marked slowdown in corporate hiring. Across both manufacturing and services the surveys point to the smallest monthly gain in jobs since April 2010, consistent with a mere 115,000 rise in non-farm payrolls.

 

Business optimism about the year ahead is at one of the lowest levels seen since the global financial crisis. The surveys therefore add ammunition to those arguing for the Fed to hold off with hiking interest rates again,  at least until the dust settles after the election.”

Charts: Bloomberg

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“Janet’s With Her” – The Fed & Politics

Authored by Bonner & Partners' Bill Bonner, annotated by Acting-Man's Pater Tenebrarum,

Inside Track

The stock market – where shares in profit-making companies are exchanged – went up again. Does this mean the outlook for making money is improving? Does this presage higher dividends for the stockholders? What, exactly, do investors expect?

 

the-deep-state-mike-lofgren

Partisan politics is for the most part a distraction, maintaining the illusion of choice for the public.

Illustration by Ana Vlajcevic

More of the same, is our guess. Hillary in her Heaven. Yellen on her throne. And now, Fed Governor Lael Brainard is said to have the inside track for the top job at the Department of the Treasury. Wait a minute…

 

1-djia

DJIA, daily. Recently the stock market has been stuck in a trading range, but last week the market went up on three days, including Friday. There seems to be a lot of complacency, which seems not exactly warranted – click to enlarge.

The Fed is supposed to be non-political. Yet here is a Fed governor angling for a job in the next Democratic administration. In the run-up to the presidential election, mightn’t she be inclined to keep stock prices high and interest rates low?

Mightn’t she be tempted to want to give her next boss a little boost? What steel strengthens her backbone, lest she bend to pick up the lure? What wax fills her ears, lest she hear the sirens’ call?

Bloomberg reports an exchange on the subject between Republican Congressman Scott Garret and Ms. Yellen. “Yellen cornered by lawmaker in heated exchange over Fed politics,” reads the headline.

The press focuses on the “politics” between Democrats and Republicans and the potential conflict of interest involved: The Fed can cause a boom or a bust, thereby favoring one candidate or the other.

But there’s a far deeper conflict of interest that the press has missed: Democrats and Republicans share the same bias. It is the Fed’s bias, too – an abiding prejudice towards the Deep State.

 

Surface Scum

If the Fed were really apolitical, it wouldn’t care if stock prices went up or down. Nor would it care what interest rates borrowers were paying. It would stand back and let willing buyers and sellers discover prices on their own.

After all, that’s the way markets work: always rewarding success and correcting mistakes. A market that does not correct is like a bathtub without a drain. It fills up with errors, misallocations, zombies, and cronies – all floating on the surface, like scum.

Honest central banks are supposed to keep their distance from politics – and let the tubs drain. They are supposed to be impartial… and not just between Republicans and Democrats.

They are not meant to favor buyers over sellers of stocks, or borrowers over lenders, or labor over capital. They are meant to protect the realm’s money and nothing more.

 

2-purchasing-power

Even if “protecting the realm’s money” had remained their only job, they couldn’t have botched it more thoroughly if they had tried. The utterly absurd belief that inflation somehow “creates jobs” has helped to accelerate the process  – click to enlarge.

 

The Humphrey-Hawkins Act of 1978 expanded the Fed’s job, charging it with maintaining full employment, too. The Fed shouldered this new responsibility with the lusty enthusiasm of Paris carrying away Helen of Troy: It was bound to cause trouble, but it might be fun.

It was (and still is) widely believed that the way to add jobs was to destroy the value of the nation’s money. This the Fed has done with gusto. Since 1971, when President Nixon ended the last vestiges of the gold standard, the dollar has lost 80% of its buying power. Now, the Fed has no intention of letting “sound money” get in its way.

 

Managing the Hustle

The current system suppresses markets in order to deliver trillions of greasy dollars to Deep State cronies. That’s the whole idea: to avoid corrections and keep the money flowing.

And protecting the system – a scam based on a fake dollar, fake interest rates, fake stock prices, fake statistics, and a fake economy – is the Fed’s No. 1 concern.

That’s why it is “data dependent”; an honest Fed wouldn’t care about data. That’s why it hesitates to raise rates; an honest Fed wouldn’t have lowered them in the first place. That is why it watches over the way the cards are dealt so carefully; it needs to make sure the right players get the aces!

 

yellen_data_dependent_cartoon_11-18-2015_large

The degree of data dependence probably depends largely on things unrelated to the data. But even if we were to generously assume that central banking isn’t a racket, and that a sober analysis of data and statistics describing recent economic history is indeed the main driver of policy, it would still not improve the outcome much. The planners simply cannot know what the “correct” policy is, regardless of how many statistics they ponder. What they are tasked with doing cannot be done in this universe.

Cartoon by Bob Rich

The Fed practically created the swindle. Today, it manages the hustle to keep the wealth flowing. That, much more than favoring one party over another, is the Fed’s conflict of interest: Between markets and politics, it favors politics.

For the good of the nation? Hardly. Since the market bottomed in 2009, savers have lost $10 trillion. Creditors have gained (at least on paper) far more. Household wealth is up $33 trillion in the U.S. (most of it in the households of the rich). Growth is down. Productivity is down. Wages are down for most people.

The Fed has acted in favor of the few and to the detriment of the many. It, along with its employees, bosses, cronies, and drinking buddies, is firmly ensconced among the “One Percent” of the Washington-Manhattan axis.

Rather than recognize any “conflict of interest,” it ignores its own biases in order to keep the racket going.

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The Bond Market is Warning of a Stock IMPLOSION! Few Are Listening.

Stock market bulls are missing something MAJOR in the markets.

That “something” is a bond market meltdown. 

The bond market is over twice the size or the stock market. This is the SMART money: the money that adjusts to tectonic shifts first.

With that in mind look at the collapse in the long-bond space.

We’ve taken out critical support AND been rejected in an attempt to reclaim it (green line). This is a MAJOR signal that something bad is coming.

Worse still, we’ve taken out the trendline from the November low (red line). The Fed barely was able to get bonds back over this line by refusing to hike rates in September.

NOW it’s too late.

The ENTIRE stock market rally in 2016 has been due to stocks chasing bonds. If bonds are now rolling over and collapsing, stocks are in REAL trouble.

You’ve been warned. Globally over $555 TRILLION in derivatives trades based on interest rates. If the bond market really starts to go then we’re facing a Crisis that will be exponentially larger than 2008.

If you've yet to take action to prepare for this, we offer a FREE investment report called the Financial Crisis "Round Two" Survival Guide that outlines simple, easy to follow strategies you can use to not only protect your portfolio from it, but actually produce profits.

We made 1,000 copies available for FREE the general public.

As we write this, there are less than 50 left.

To pick up yours, swing by….

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Best Regards

Phoenix Capital Research

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Banks With $12 Trillion In Assets Threatened By “Shocks” Even In Recovery, IMF Finds

In its latest report on financial stability released today, the IMF, which is also currently meeting to find a solution to globalization that benefits all people not just the very top, warned that risks to financial stability are growing. It warned about what it calls “medium-term” dangers in both emerging and developed economies, and expressed particular concerns about Europe, Japan and China.

As cited by the BBC the report says investors were taken by surprise by the result of the British referendum on the European Union, but the political shock was absorbed by markets. They passed what it calls “this severe stress test”. But looking further ahead, the IMF sees growing risks. A key factor for future bank health is profits or lack thereof. As Deutsche Bank has found out the hard way in recent weeks, weak profitability makes it harder for banks to build up their capital – which they can do by holding on to some profit rather than giving it all to shareholders as dividends. It also makes it harder for them to expand lending to business and consumers, as is needed to support economic recovery.

The IMF, which elsewhere has been pushing for more QE, blamed low interest rates borne by central bank policies, for the lack of profitability. The struggle to make profits also reflects the persistent economic weakness in the developed world, which means weaker demand for credit.

The IMF also turned attention to Europe’s trillion+ NPL problem noting that “some banks in the eurozone have a burden of problem loans, which are not being repaid and that they have still not dealt with. The report identifies Italian and Portuguese banks as facing serious challenges of profitability and capital levels.

Persistent low interest rates, sluggish capital markets activity, higher capital requirements and legacy nonperforming loans have strained profits for banks in the developed world. The firms need to reduce bad debt stocks and undertake structural reforms to improve profitability, the IMF said.

it gets worse: as Bloomberg adds, the global economic recovery would still leave about a quarter of banks in developed countries too weak to support further growth and susceptible to future shocks. This means that banks controlling about $12 trillion of assets would remain vulnerable during a rosy economic environment marked by faster economic activity, rising interest rates and declining defaults. Most of those banks, with $8.5 trillion in assets, are in Europe, Bloomberg adds.

So what is the IMF’s suggestion? Why change the rules of course.

According to the report, governments can help with legal changes to make it easier for banks to get rid of bad loans, adding that in the euro zone alone, the effect on bank capital would be to swing from a loss of 80 billion euros ($89 billion) to a gain of 60 billion euros, the IMF estimated. Italian and Greek banks would be the biggest beneficiaries of such changes, the report said, adding that recent steps taken by the Italian government to implement such reductions might not be enough, according to the report.

And all it would take is a change in the rules which somehow will boost bank profitability?

“This will require adjusting dated business models in order to maintain profitability, and adapting to new business realities and regulatory standards.”

As BBC adds, there is also a warning about Japanese banks and their expansion overseas, which the report says is the result of economic weakness and very low interest rates in their home market. That leaves them exposed to some risk in terms of access to the foreign currency funds they need to maintain that business.

Outside the rich countries, China is seen as a potential trouble spot. The report says that rapid credit growth and the expansion of “shadow banking” (lending done by firms that are not banks) “pose mounting risks to stability”.

The rapidly growing financial system in China is becoming increasingly “interconnected”, the report says. The extent to which firms in the sector are interconnected – that is, have transactions with one another – was identified as a key factor in the financial contagion that was a feature of the international financial crisis.

The IMF’s recommended medicine for these mounting risks is partly about generating a stronger economic recovery, including reforms to underpin growth. There are also calls for more specific financial steps, such as making it easier for banks to tackle problem loans and the banks themselves tackling high costs.

* * *

There was some good news: the IMF noted that banks are in some respects stronger than they were before the financial crisis. They have more capital, a kind of financial buffer that enables them to survive losses. Their liquidity has improved, which means they have more chance of coping if they suddenly have to find funds quickly.

On a more positive note, the fund does say that short-term risks have abated since its previous assessment of global financial stability in April. Pressures on emerging markets have eased, the report says. Rising commodity prices (though they are still relatively low) have helped and so has the reduced uncertainty about China’s prospects in the near term.

However, no matter where the banks are located, they are all struggling to make money the report concluded.  

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Mom Asks Cops to Help Persuade Her 12-Year-Old to Go to School. They Arrest Her.

RainA Connecticut mom who was having trouble convincing her 12-year-old to go to school left her home at 9:30 a.m. after locking the boy out. She called the cops to ask them to come persuade him, while she headed off to an appointment.

Inviting the cops into your family life? Huge mistake. I’m sure you can guess what happened next.

The mom was arrested and charged with “risk of injury to a child.” According to the Middletown Patch, she was released on bond and has an October 3 court date.

I’m sure that will make the family so much more functional. Now the mom, Tamika Jackson, needs a lawyer and has a fine or possibly jail time staring down at her. And I really doubt this is making her son a whole lot easier to deal with.

The reason the cops gave for the arrest was this:

“Jackson did not seem to understand that she could not simply leave her child outside and call the police to deal with him,” police wrote in the report.

The officer told Jackson that she can’t lock her 12-year-old son out of the house on a rainy day without adequate shelter.

“He had no access to a restroom and no access to food or water,” the officer wrote in the report. “The victim had no telephone and his closest family resides in New Haven. Jackson stated that she was not concerned because he could have knocked on the neighbor’s door if he needed anything.”

I am sick of police acting as if parents are the only people in the world who can help a child. Neighbors are real. They exist. So does knocking. To act as if this child was abandoned in the middle of the rain forest ignores reality: He’s not going to melt. He can knock on a door. He is 12, not 2.

What’s more, do you see a “risk of injury” here? Either the boy goes to school or he doesn’t. He is standing outside his home. If that is so risky, then anytime he leaves his apartment he must be in grave danger. Should we arrest all moms who don’t live in the world’s nicest neighborhoods?

I can only imagine Jackson’s stress level before this happened, and now it must be off the charts. If the cops truly want to help a mom who is at her wit’s end, rather than beat her down, help her! Put her in touch with a before-school program her son might want to go to. Give the mom a phone number for a parenting center that teaches strategies for parents of teens. Talk to the boy and tell him to listen to his mom and go to school. That’s all the mom wanted—a little back up.

Of course, she never should have called the cops for parenting help—that’s not their job. But that was her mistake—calling the cops—not endangering her child. He’s perfectly safe on his own porch.

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Gartman On The Gold Carnage: “We Have Wounds To Lick And Heal”

It was to be expected: one day after Gartman’s “fair warning” that he is planning to buy gold in yen terms, gold suffered its biggest plunge since 2013. 

So, inevitably, in his latest letter the “commodity guru” has unleashed a stream of platitudes regarding yesterday’s precious metal carnage:

SPOT GOLD: What a Disaster!: Gold is still up sharply for the year?to?date, but after yesterday’s debacle it certainly doesn’t feel that way! This trend line’s been broken and bounces are to be used to lighten up. We’ve really no choice, have we?

 

As for the precious metals, what can one say other than “We truly didn’t see that coming!” The light at the end of the tunnel was a fully loaded train heading right for us and we smashed into it! We were concerned and indeed we voiced that concern in our comments yesterday that $1305-$1310 in spot gold could be hit and that stop loss selling could follow hard upon. However, we actually believed that the follow-on stop loss selling would be far, far less severe than it proved to be. Indeed, we had hoped that the selling would be sated quickly and thought it possible that a “reversal” would be possible. It was not.

 

Gold fell relentlessly, ostensibly on the news that the ECB might well “taper” its purchases of sovereign debt securities. With the Chinese removed from the market because of the National Week/Golden Week celebrations, and with the Indians reticent for whatever reason to step into the fray, gold had sellers everywhere without buyers of consequence. Do we think gold is overdone on the downside; yes, we do indeed, but so much technical damage has been wrought that any bounces toward $1292-$1297 will prove to be formidable resistance on a first bounce. For now, we have wounds to lick and heal.

 

Finally, because of a computer glitch, we cannot report on our gold EFT’s this morning, but we shall “on the ‘morrow.”

As for his comments on the market, here they are:

Regarding the market here in the US, the trends of the broad indices remain upward, if again we define the “trend” by the 200 day moving average of the index in question or of the individual stock. The Dow, for example, is nearly 3.1% above its upward sloping 200 day moving average and that obviously remains bullishly inclined. The S&P’s 200 day moving average continues to move “from the lower left to the upper right” and as of last night’s close the Index itself is 4.1% above that moving average. The NYSE Index is, as of last night’s close, 3.6% above its upward sloping 200 day moving average and the broad Russel Index is a stunning 9.2% above its upward sloping 200 day moving average. Clearly the trends, in broad terms, remain upward.

 

But… and isn’t there always a “but” of some consequence?…we are nonetheless bothered by the fact that so many of these broad indices “seem” to be turning for the worse, not the better. We are bothered by  the fact that the S&P “seems” to be failing in recent day, refusing to make new highs while breaking short term, but nonetheless seemingly important, short term upward sloping trend lines as seen in the chart of the S&P this page. The same can be said of the Dow; of the NYSE and of the Russel. This we find worrisome; this is what keeps us up at night.

 

Finally, we found it more than merely passing strange that on the first of the month stocks did not advance. Historically, new inflows of money have taken the indices higher on the first trading day of each new month. This time that did no happen, and that has given us reason for concern. Perhaps we are uncommonly uneasy because of the damage wrought upon us by the collapse in gold prices yesterday, or perhaps we are simply a bit dyspeptic and nothing more; but we find ourselves uneasy about the equity market… very, very uneasy

This will likely be the necessary and sufficient green light for US stock to turn higher today, absent any more ECB tapering headlines of course. As for the gold trade, we will await for the “computer glitch” to be resolved before finding out if Gartman was stopped out and is no longer gold the yellow metal.

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As WTI Nears $50, Is The Oil Price War Finally Over?

Submitted by Precise Consultants via OilPrice.com,

Let’s just hope it sticks. You see, chaps, the devil’s in the detail and the detail isn’t going to be agreed on until November 30th. As The Guardian put it,

"OPEC seems to have been taking lessons from EU summits. It has agreed that something needs to be done but has put off until another day the rather more difficult task of getting its fractious membership to decide what they should be.”

But until it’s un-done, it’s done and the markets are a much happier place to be. Oil prices settled up nearly 6 percent when the announcement was made. The infectious good spirit was enjoyed in Wall Street too where its index of U.S. energy stocks rose 4 percent – the best one-day gain since the start of the year. Brent crude rose 5.9 percent per barrel and WTI leapt about the same to $47.05 following the two-day meeting.

And continues to push towards $50 after API inventory data.

It’s an important deal as the Telegraph says, particularly for the energy companies left reeling after prices collapsed from a June 2014 high of $115 per barrel to $27.88 in January.

The agreement in principle is that output would be limited to between 32.5m bpd and 33 million bpd. Current output is 33.24 million bpd. “This is the end of the production war – OPEC claims victory!” cheered Phil Flynn, an analyst at Price Futures Group in Chicago. He told Reuters, “The cartel proved that it still matters, even in the age of shale.”

It’s more likely, however, a reluctant acknowledgement of a very simple truth – Saudi Arabia’s oil policy isn’t working.

The Wall Street Journal says people ‘familiar with this matter’ (sounds deliciously creepy doesn’t it?) reported that the Kingdom’s energy minster Khalid al-Falih’s attention was drawn to an OPEC prediction that a global glut was likely to remain throughout 2017. Faced with the consequences of its policy to date – introducing unpopular domestic austerity measures and a decision by the U.S. Senate to allow 9/11 victims to sue the Kingdom for its potential involvement which saw Saudi’s currency plunge to its lowest level in four months – perhaps it decided to lick its wounds and live to fight another day.

What is very interesting is the thaw in Saudi Arabian/Iranian relations. Bijan Zanganeh didn’t even turn up to the last meeting, which prevented a deal being struck, insisting at home that Iran would support any deal to cut production that OPEC made, just so long as they didn’t expect Iran to act as well so soon after sanctions were lifted. However, after the meeting he told reporters, “OPEC made an exceptional decision today…After 2 ½ years OPEC reached consensus to manage the market.”

An obscure commitment made by al-Falih may yet prove to be the sticking point in this international love-in. He conceded that Iran as well as Nigeria and Libya could produce “at maximum levels that make sense”. Just what that level that makes sense is, remains unclear.

On the other side of the fence are the frackers, who have withstood everything and the kitchen sink that was tossed their way. This move signifies that OPEC now realises it is no longer the force it once was. But it is better to share a piece of the cake than have none.

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