Tag: finance

Authored by Nick Cunningham via OilPrice.com,

A lot of big names will report third quarter earnings this week, and the results are expected to be worse than the same period in 2018.

The timing comes as the shale sector is facing somewhat of a reckoning. After years of price volatility – with more downs than ups – oil prices have failed to return even remotely close to pre-2014 levels. For several years, shale E&Ps took on debt and issued new equity, promising investors that they would profit both from a rebound in prices and from rapid production growth.

They delivered on gains to output, but not on profits. At some point in the last year, investors really began to lose faith. Oil stocks have been the worst performers in the S&P 500 this year.

The latest release of earnings will probably do little to quell unease from big investors. Oil and natural gas prices have dropped this year, by about 17 percent and 31 percent, respectively. Job cuts have returned and bankruptcies are on the rise again.

The oil majors are pressing forward with their aggressive shale development plans. That may prevent a noticeable decline in production. But their earnings – many of the majors report this week – are expected to be down roughly 40 percent from a year ago, which will raise some tough questions.

Some of the largest banks have slashed their credit lines to smaller shale E&Ps. According to Reuters, JPMorgan Chase, Wells Fargo and the Royal Bank of Canada are among some of the lenders that have reduced the amount of credit they are offering to drillers.

The so-called credit redetermination period happens twice a year, and banks tend to offer financing based on a company’s reserves. Lower prices lower that assessment because some reserves become uneconomic to produce. As a result, the ability to access financing becomes more restricted.

Closing off the ability to borrow money could force more companies into bankruptcy. There have been roughly 199 bankruptcies from North American oil and gas companies since 2015, according to Haynes and Boone, LLP. Through September, there have been 33 bankruptcies in 2019, the highest number since 2016. There were 7 bankruptcies in September alone.

As Reuters notes, the backup plans for stressed shale companies are limited. Asset sales may not be a viable path – M&A activity has fallen sharply as buyers spurn troubled projects. In fact, activity in M&A is so weak that investment banks are slashing positions on their energy desks.

Likewise, returning to equity markets for a cash injection is essentially a non-starter. And as mentioned, banks are loath to agree to lend more. The only option is to cut spending.

Last week, the U.S. rig count fell by 21, the largest decline in six months. In fact, the rig count has declined for 11 consecutive months as drillers pull back.

“As yet, the decline in drilling activity is not reflected in lower production growth, but this is probably only a question of time,” Commerzbank said in a note on Monday.

“It is already the case that shale oil production is rising noticeably only in the Permian Basin, and only slightly at Bakken. It is already falling in other shale plays such as Eagle Ford and Anadarko.”

There is also growing scrutiny on the amount of oil and gas produced relative to what companies have promised. Bloomberg profiled a former hedge fund manager who has paid particular attention to Apache Corp., a company that “shale doubters” believe is overestimating the ratio of oil to gas that some its assets can produce.

This has led some analysts to cut their forecasts for production growth.

“The downgrade reflects lower oil prices, lower rig counts, capital constraints, pipeline bottlenecks and a negative trend in well-productivity,” Rob West, Research Associate at the Oxford Institute for Energy Studies, wrote in a commentary.

“After all, 2019 has been a punishing environment for any company to lower its production guidance, raise its capex or report an operational mishap.”

After Concho Resources revealed disappointing results from its 23-well “Dominator” project a few months ago, which set off a steep slide in its share price, there will probably be intensified scrutiny on any production misses this time around.

However, Rob West of OIES adds that concerns about productivity may be “premature,” and that drillers still have plenty of ways to keep logging productivity gains. The mishaps this year need not be the end of the story, West said.

Still, for now, investors are losing interest, and that may not change until and unless there is a major change in the industry’s outlook. The third quarter results probably won’t provide that catalyst. “People are ignoring shale names now and they’re sort of disgusted with them almost,” Rohan Murphy, an analyst with Allianz Global Investors in London, told Reuters in an interview.

Press for time? Then the following excerpt from Curvative Securities’ Scott Skyrm is all you need to know what to expect tomorrow:

Given the Fed is in easing mode and dumping liquidity into the market, it is unlikely they will NOT ease tomorrow. With over $200 billion in RP operations and $60 billion a month of QE Lite, it would throw the markets in turmoil if the Fed did not ease. For tomorrow, look for guidance about future rate cuts.

The market is pricing about a 40% chance of another cut within the next five months, though I believe the Fed will pause easing after tomorrow and any future rate cuts will be “data dependent.”

Have a little more free time? Then read on the following FOMC preview, courtesy of RanSquawk:

The Fed is expected to lower rates by 25bps to 1.50-1.75%; key will be whether the Committee signals that it is now on pause, or whether the door to further cuts remains open. While market pricing and the analyst consensus are looking for a rate cut, some – such as Jefferies – have warned that there may be enough for the Fed to pause at this meeting. The FOMC will publish its rate decision on 31st October 2019 at 2:00pm EDT. Post-meeting press conference with Fed Chair Powell scheduled for 2:30pm  EDT.

RATES:

The Street expects the Fed to cut rates for the third straight meeting, lowering the federal funds rate target by 25bps to 1.50-1.75%; money markets price the cut with over 90% certainty.

Another two rate cuts are priced in by the end of 2020.

The Fed’s September economic projections envisaged the FFR target at 1.75-2.00% at end of both 2019 and 2020 (rates are currently within this bracket), rising to 2.00-2.25% by end-2021. Any decision to cut rates will likely face dissent from Eric Rosengren and Esther George, both of whom have dissented previously.

IS A CUT A DEAD CERT?

Given the two cuts already implemented, some question whether the FOMC needs to lower rates further. After all, consider that as BofA’s David Woo said earlier this week, “Over the past 30 years the Fed has never cut more than 75bp at a stretch without the US economy going into a recession.“

• Diminishing the case for a cut: data has generally held up well (payroll growth close to trend, jobless rate falling to 50-year lows; consumer spending has been stable, and confidence remains firm; CPI has been rising, though this is yet to be seen in PCE; however, internationally, downside surprises in China GDP growth and the subdued outlook in the Eurozone could add to the Fed’s caution, although US/China trade talks have been progressing well, as has Brexit, likely mitigating some of the Fed’s global concerns); meanwhile, equities are lingering near record highs, and financial conditions continue to loosen since September. Fed communications have also been generally constructive, with little signs that policymakers judge the outlook to have materially deteriorated since its last meeting.
• However, on the other side of the coin, analysts have noted that the Fed has historically not tended to lean against aggressive market pricing, supporting the case for a cut.

FUTURE SIGNALS:

Looking ahead, markets are expecting just over one cut through the end of the year (including this week’s potential cut), suggesting there is be a feeling that the so-called ‘insurance cuts’/’mid-cycle adjustment’ are done; and looking to next year, markets price one to two rate cuts in 2020.

The notion that if the FOMC cuts, it will be on hold in December is given further credence by the Fed’s ‘insurance cut’ playbook in the 1990s, where on two occasions it cut by a cumulative 75bps before holding rates. How it frames such a ‘pause’ will be crucial; will it explicitly state that rate cuts are over? Will it retain a more data-dependent outlook? Within its statement, attention will be on the line that the Fed will “will act as appropriate to sustain the expansion” which in recent months the market has taken as a sign that additional cuts were on the horizon. The prevailing wisdom appears to be that the Fed will pause, whether or not it explicitly states it, and any further rate cuts may push accommodation to levels that implies it is more than a ‘mid-cycle adjustment’. It is worth keeping an eye on the vote of James Bullard, who last month argued for a deeper 50bps rate cut, which could show the appetite among the doves for further lowering of the FFR target (note: Bullard will vote in October and December, and then will next vote on policy in 2021).

REPO OPERATIONS:

Intra-meeting, the Fed announced that it would purchase T-Bills at a rate of USD 60bln per month. The intra-meeting nature of the announcement is understood to be significant as a signal that the Fed considers these operations as only part of the technical aspects of monetary policy implementation, rather than the sort of balance sheet expansion seen during the crisis, which was designed to crowd investors out of safer assets to help stoke economic activity. Since the Fed began overnight repo operations, its balance sheet has grown by USD 200bln as the central bank offers ample liquidity to prevent any jam-up in repo markets. The Fed has and will continue to emphasize that these operations ‘are not QE’. According to a recent newswire survey, 56% of economists surveyed think the Fed will find enough T-bills for its monthly purchases; 22% believe that the US Treasury will raise its bill issuance to accommodate the Fed; some economists also believe that the Fed will need to boost its bill-buying to include coupon-bearing Treasuries with up to three years in maturities (NOTE: The Treasury’s quarterly refunding announcement is due ahead of the FOMC meeting on Wednesday).

SRF ANNOUNCEMENT:

The Fed is expected to announce a more permanent operation in 2020, with the launch of a standing repo facility. There are many facets that still need to be worked-out, according to reports, like access to the SRF as well as the rates used to enable counterparties to engage with the market without any negative perceptions around the health of the banks; the Fed must also ensure that any SRF does not kill the private sector repo market. Accordingly, Chair Powell may allude to the background work being carried out, but may be light on specifics.

With the S&P hitting an all time high just as the Fed is set to cut rates for the 3rd time in four months due to the “slowing economy” amid an earnings season that will show the first earnings recession in three years, not to mention near record outflows from stocks (and inflows to bonds)…

… which somehow has resulted in a surge in stocks, even as CEO sentiment crashes to financial crisis lows…

… it is safe to conclude that no human really has a clue what is going on.

But did you know that algos also no longer have any idea what to make of this market?

According to Credit Suisse prime brokerage data, market-neutral quants, the ones who got crushed hardest during the September quantastrophe that sent growth stocks tumbling and value stocks surging…

… have cut their gross stock allocations to the lowest in nearly five years, as the following Bloomberg chart shows.

The main reason for the deleveraging – or degrossing – is that quants no longer have a sense of what the market may do at any moment; meanwhile the violent whiplash that market neutral quants suffered during the early-September growth scare, has forced them to take down gross exposure further amid rising factor volatility as the anxiety-ridden rally of 2019 rolls on.

“It looks nice – the market’s up 20%, but it’s been a wild ride underneath the covers,” Mark Connors, global head of risk advisory at Credit Suisse told Bloomberg. “The factor path has been unpredictable.”

And sure enough, after it was left for dead following a decade of underperformance, last week the “value” strategy revived once more as hopes for a U.S.-China trade deal buoyed economic prospects, just weeks after a rotation in the opposite direction driven in part by recession fears.

As Bloomberg notes, while the initial take on such violent, unexplained moves is that they are due to late-cycle fragility as investors turn on every economic and political headline on a dime, Bloomberg also notes that some suspect the choppy rotations have been exacerbated by deleveraging among systematic funds, who find market’s bizarre moves to be too volatile for their current risk profile.

“Quants sometimes can be a canary in the coal mine,” said Melissa Brown, managing director of applied research at Qontigo. “Maybe we are going to see going forward more volatility in style factors as funds need to deleverage or people pull their money.”

Maybe. And if we do, we will see another circular loop emerge, as deleveraging funds force other funds to deleverage, resulting in even less liquidity, more volatility, and even more deleveraging, until some “bottom” is finally reached.

Meanwhile, some factors are becoming even more sensitive to shifts in positioning. The strength of the recent rally – short squeeze if you will – in cheap cyclical shares, for instance, caught many by surprise given the lack of a fundamental catalyst, Bank of America strategists wrote.

Pointing out the blatantly obvious, Los Angeles Capital Management’s Hal Reynolds said that “we are in a choppier environment,” noting that “compression in returns and pick-up in risk have both occurred this year, leading to the reduction in risk budgets.”

Meanwhile, as quants turned tail, some other – more-carbon driven – hedge funds turned more bullish. For example, macro funds and commodity trading advisors, which mostly trade index futures rather than individual stocks, have expanded their long bets this month, according to Credit Suisse data. Meanwhile, conventional long-short stock pickers boosted their net exposure to the highest since March as they covered shorts amid the surprise resurgence this month of “economic recovery” trades betting on higher inflation and growth.

Financial stocks have outperformed, while defensive sectors from consumer staples to utilities have lost money — a reversal of market trends seen earlier this year. Meanwhile, Deutsche Bank’s consolidated equity positioning index shows that overall equity positioning has now moved from neutral to slightly overweight.

Ironically, the deciding factor whether equity quants return to the market and boost their equity allocation, may be in the hands of bond CTAs, whose performance has been critical to explain not just the recent plunge in bond yields and surge in negative yielding debt to a record notional of $17 trillion, but also to understand the performance of defensive, “bond-like” stocks in recent months.

Commenting on the risk of a potential positioning reversal by bond CTAs, Nomura’s Masanari Takada writes that “the rise in yields thus far accompanying the recovery in sentiment can, of course, be interpreted positively as part of the general move toward healthier markets. But we see something troubling in recent movements by systematic trend-following players. Trend-following algo traders, as typified by CTAs, have built up substantial long bond futures positions over the past year. While developments differ by region, CTAs have now reduced these long positions by only around 40-50% from their peak in summer 2019. Considering the collapse in upward momentum for bond prices, we see a risk that trend-followers could cut their longs further in the interest of avoiding losses. While the figures we give below are  merely estimates of the room for a further rise in yields based on CTAs’ positions, we hope they will be of use when looking for near-term inflection points and thinking about a risk scenario in which CTAs completely close out these positions.”

Looking at the potential liquidation risk, Nomura’s quants note that CTAs have unwound their long positions by roughly 45% from the peak (28 August 2019), and point out that potential triggers at 10yr UST yields of

1. around 1.76% (the average cost of CTAs’ net buying since June),
2. around 1.90% (average cost since April), and
3. around 2.05% (average cost since March).

In the near term, the threshold to pay attention to is the second of these, 1.90%. In the extreme case in which yields were to break above 2.05% (the third trigger line), Nomura would expect an across-the-board collapse in CTAs’ long UST futures positions, which could cause yields to shoot up to around 2.5%.

In the end, however, as Nomura correctly notes, “whether CTAs close out their long bond futures positions and make a clear shift to long equity futures positions tends to be determined by the state of the global economy.” And considering the lack of upward economic momentum at present, the risk of an extreme mechanistic sell-off of bond futures that ignores the economic facts on the ground is unlikely to materialize.

Late in the day Tuesday the US House of Representatives voted overwhelmingly in favor of adopting a historic resolution recognizing the Armenian Genocide. This, it should be noted, on the 96th anniversary of the founding of Turkey as a republic no less.

And in another major simultaneous “gift” to Turkey’s Erdogan — what headlines are already calling a “double whammy” — the House also voted overwhelmingly to approve a biting sanctions bill that if signed into law would crush Turkey’s economy and target Erdogan’s financial assets personally over his controversial military incursion into northern Syria. 

Ankara has for years successfully lobbied against any such Congressional resolution on the 1915 Armenian genocide, treating it as an embarrassing and grievous wound to its reputation, also given the severe censorship within the country over this chapter in modern Turkey’s history.

It’s de facto illegal in Turkey to even acknowledge it, and over the past years multiple journalists, Armenians among them, have gone to jail for writing about the historic mass killings. 

Turkey’s Ministry of Foreign Affairs was quick to condemn the resolution, H.R.296, dismissing it as a “delusion” of the “Armenian lobby and anti-Turkey groups” and further that it will only serve to damage future US-Turkey relations. 

The measure recognizes the systematic killing of 1.5 million Armenians by Turkish military forces of the Ottoman Empire from 1915 to 1923. It also recognizes other Christian groups exterminated by Turkish Muslim forces, including “Greeks, Assyrians, Chaldeans, Syriacs, Arameans, Maronites, and other Christians,” according to the resolution’s text. 

The Congressional text is scathing in its condemnation, beginning with:

Affirming the United States record on the Armenian Genocide.

Whereas the United States has a proud history of recognizing and condemning the Armenian Genocide, the killing of 1.5 million Armenians by the Ottoman Empire from 1915 to 1923, and providing relief to the survivors of the campaign of genocide against Armenians, Greeks, Assyrians, Chaldeans, Syriacs, Arameans, Maronites, and other Christians;

Whereas the Honorable Henry Morgenthau, United States Ambassador to the Ottoman Empire from 1913 to 1916, organized and led protests by officials of many countries against what he described as the empire’s “campaign of race extermination”, and was instructed on July 16, 1915, by United States Secretary of State Robert Lansing that the “Department approves your procedure … to stop Armenian persecution”;…

And ending with:

Resolved, That it is the sense of the House of Representatives that it is the policy of the United States to—

(1) commemorate the Armenian Genocide through official recognition and remembrance;

(2) reject efforts to enlist, engage, or otherwise associate the United States Government with denial of the Armenian Genocide or any other genocide; and

(3) encourage education and public understanding of the facts of the Armenian Genocide, including the United States role in the humanitarian relief effort, and the relevance of the Armenian Genocide to modern-day crimes against humanity.

Concerning Syria, the successful sanctions vote in the House was also meant as a rebuke not only to Erdogan for his ordered attacks on Kurds, but to Trump, after the recent Pence-brokered ceasefire deal and US draw down from border areas, touted by Trump as a great achievement toward peace. 

oh man, she all lives matter’d the armenian genocide https://t.co/y7jLjAJwYy

— Bobby Lewis (@revrrlewis) October 29, 2019

The president is not expected to sign into effect any new sanctions related to ‘Operation Peace Spring,’ barring a major development or egregious and significant Turkish breach of terms of the US-brokered ceasefire. 

Former Trump campaign adviser George Papadopoulos wants former Rep. Katie Hill’s seat in Congress. Hill, a California Democrat, resigned on Sunday amid a House Ethics Committee probe into allegations that she had inappropriate sexual relations with a staffer.

Papadopoulos – who the FBI under James Comey sent a portly, well-paid spy and his honeypot assistant “Azra Turk” to befriend – filed his statement of candidacy with the Federal Election Commission on Tuesday for California’s 25th district, according to Axios.

Of note, Hill flipped a red seat blue during the last election cycle, which suggests Papadopoulos may actually have a shot of becoming a United States lawmaker.

A group of guerilla journalists from We Are Change snuck onto Jeffrey Epstein’s island, Little St. James, where they recorded the island’s features in high-definition.

Founder Luke Rudowski and a crew were able to book a ride onto the deceased pedophile’s island, where they found a series of “satanic gargoyles” and explored landmarks such as Epstein’s strange cube-shaped ‘temple.’

Watch:

Via GreatGameIndia.com,

India’s second (and largest) nuclear power unit stopped operating on 19th October 2019. It is suspected that the Kudankulam Nuclear Power Plant was hit by a cyberattack and the authorities were already alerted of the threat months in advance. Even as cybersecurity experts are investigating the case, the authorities were quick to dismiss any occurrence of a spyware infiltrating their systems. The power plant project built in collaboration with Russia has been a target of foreign players since its inception.

Kudankulam Nuclear Power Plant hit by Cyberattack

Nuclear Power Unit stops operating

The second 1,000 MW nuclear power unit at Kudankulam, owned by the Nuclear Power Corporation of India Ltd (NPCIL) stopped power generation on Saturday 19th October, said Power System Operation Corporation Ltd (POSOCO). The atomic power plant stopped generation about 12.30 a.m. on Saturday owing to “SG level low”, the company added. The expected date of the unit’s revival is not known. The NPCIL has two 1,000 MW nuclear power plants at Kudankulam Nuclear Power Project (KNPP) built with Russian equipment.

Official statement from Kudankulam Power Plant Project on Cyberattack

While cybersecurity experts are investigating the breach, the Kudankulam Nuclear Power Plant in Tamil Nadu has denied being the victim of a cyber attack and denied any incident of a spy virus having infected the systems at the plant. The statement asserted that since “Kudankulam Nuclear Power Plant Project (KKNPP) and other Indian Power Plants Control Systems are stand alone and not connected to outside cyber network and Internet, any cyberattack on the Nuclear Power Plant Control Systems is not possible.” This however, is a false assertion which was exposed when Israeli intelligence targeted Iranian Nuclear facility (which also was not connected to Internet) with Stuxnet.

Prior warning

More than a month before the unit stopped operating, the National Cyber Security Coordinator Office was notified of an intrusion of their systems by cyber threat intelligence analyst, Pukhraj Singh. The alert was generated on investigation by cybersecurity firm Kaspersky into spy tools dubbed DTrack.

Seeing KKNPP’s press release, I would like to add that I notified Lt Gen Rajesh Pant (National Cyber Security Coordinator) on Sep 4. Follow-up emails were exchanged, acknowledging the issue. I would solicit no further enquiries on the matter, requesting privacy. https://t.co/SMdABbJcvQ

— Pukhraj Singh (@RungRage) October 29, 2019

DTrack Data Collection

DTrack data dump of the power plant also revealed statically encoded login credentials among other things:

Kudankulam Nuclear Power Plant DTrack data collection

Kudankulam Nuclear Power Plant DTrack data collection

• Login credentials

• Local IP, MAC, OS install information (including registered org) via registry

• Browser history

• Connectivity to local IP

• Compspec, ipconfig, netstat info

> net use \\\\10.38.1.35\\C$ su.controller5kk /user:KKNPP\\administrator

DTrack – Spy Tool

Kaspersky Global Research and Analysis Team have discovered a previously unknown spy tool, which had been spotted in Indian financial institutions and research centers. Called Dtrack, this spyware reportedly was created by the Lazarus group and is being used to upload and download files to victims’ systems, record key strokes and conduct other actions typical of a malicious remote administration tool (RAT).

In 2018, Kaspersky researchers discovered ATMDtrack – malware created to infiltrate Indian ATMs and steal customer card data. Following further investigation using the Kaspersky Attribution Engine and other tools, the researchers found more than 180 new malware samples that had code sequence similarities with the ATMDtrack, but at the same time were not aimed at ATMs. Instead, its list of functions defined it as spy tools, now known as Dtrack. Moreover, not only did the two strains share similarities with each other, but also with the 2013 DarkSeoul campaign, which was attributed to Lazarus – an infamous advanced persistence threat actor responsible for multiple cyberespionage and cyber sabotage operations.

Dtrack can be used as a RAT, giving threat actors complete control over infected devices. Criminals can then perform different operations, such as uploading and downloading files and executing key processes.

In a breach of national security, INS Vikrant, India’s first Indigenous Aircraft Carrier (IAC) was hit by an espionage attack where a hard disk and a multi function control (MFC) processor were stolen from the ship docked at the Cochin Shipyard Ltd (CSL) https://t.co/UZNMUJmO59

— Sabena Siddiqi (@sabena_siddiqi) October 28, 2019

Entities targeted by threat actors using Dtrack RAT often have weak network security policies and password standards, while also failing to track traffic across the organization. If successfully implemented, the spyware is able to list all available files and running processes, key logging, browser history and host IP addresses, including information about available networks and active connections.

The newly discovered malware is active and based on Kaspersky telemetry, is still used in cyberattacks.

“Lazarus is a rather unusual nation state sponsored group. On one hand, as many other similar groups do, it focuses on conducting cyberespionage or sabotage operations. Yet on the other hand, it has also been found to influence attacks that are clearly aimed at stealing money. The latter is quite unique for such a high profile threat actor because generally, other actors do not have financial motivations in their operations,” said Konstantin Zykov security researcher, Kaspersky Global Research and Analysis Team.

“The vast amount of Dtrack samples we found demonstrate how Lazarus is one of the most active APT groups, constantly developing and evolving threats in a bid to affect large-scale industries. Their successful execution of Dtrack RAT proves that even when a threat seems to disappear, it can be resurrected in a different guise to attack new targets.

A scientist with the National Remote Sensing Centre (NRSC) of the Indian Space Research Organisation (ISRO) was on Tuesday found murdered in his apartment in #Hyderabad.https://t.co/JQ5G7naiK9

— GreatGameIndia (@GreatGameIndia) October 2, 2019

The Foreign Hand

In 2012, the then Prime Minister of India Manmohan Singh in a starting disclosure claimed that foreign intelligence agencies were involved in the sabotage of the Kudankulam Nuclear Power Plant Project (KNPP), a bedrock of India-Russia alliance. Manmohan Singh was referring to the anti-nuclear protests in Kudankulam, which he claimed were orchestrated by American-backed NGOs.

After repeated denials for over a year from fishermen and farmers who were opposing the protest against the KNPP that they were being funded from overseas, the police in the southern Indian town opened a case against a “suspicious money transfer” from London.

The police said T. Ambika, wife of anti-KNPP activist Kumar alias Thavasi Kumar, received around $55,000 in her account with Canara Bank’s Kudankulam Banch from a particualar Anand based in the United Kingdom. Officials from the bank let the police know about the deposit in the account. The police then started an enquiry about the money being sent from a foreign destination to one associated with the ongoing anti-KNPP struggle.

Intelligence Report

According to a secret Intelligence Bureau document in possession of GreatGameIndia the protests were spear-headed by Ohio State University funded, SP Udaykumar, and a host of Western-funded NGOs. The larger conspiracy was unraveled when a German national provided Udaykumar a scanned map of all nuclear plant and uranium mining locations in India. The map included contact details of 50 Indian anti-nuclear activists revealing an intricate Network aimed to ‘take-down’ India’s nuclear program through NGO activism.

An enquiry of Udaykumar had revealed a deep and growing connection with US and German entities. In July 2010, Udaykumar received an unsolicited contract from the Kirwan Institute for Study of Race and Ethnicity at the Ohio State University, USA as a Consultant on “Group, Race, Class and Democracy issues through NGOs”. He was paid $21,120 upto June 2011 in a US bank account in his name and was contracted to earn another $17,600 upto April 2012 for fortnightly reports. These reports were significant in the fact that they were very brief lists of three general articles or books purported to have been read in the past fortnight, none relating to anti-nuclear activism, his main interest.

As a result, Udaykumar’s contact in Germany, one Sonntag Rainer Hermann (German national) was deported from Chennai on February 27, 2012. Hermann’s laptop contained a scanned map of India with 16 nuclear plants (existing or proposed) and five uranium mine locations marked prominently. The map also included contact details of 50 Indian anti-nuclear activists hand-written on small slips of paper along with a Blackberry PIN graph. The map was sent via email to five prominent anti-nuclear activists, including Udaykumar.

Map acquired from a German spy by the Intelligence Bureau with 16 nuclear plants (existing or proposed) and five uranium mine locations marked prominently.

Sustained analysis revealed that the name slips on the map were hand-written in order to avoid possible detection by text search algorithms said to be installed at e-gateways.

Based on the above enquiry, network analysis of all anti-nuclear NGO activity in India revealed the existence of

One ‘Super Network’ (prominently driven by Greenpeace and renowned activists) and

Five ‘Territorial Networks’ based out of

1. Tamil Nadu (Idinthakarai, District Tirunelveli),

2. Kerala (Trivandrum),

3. Andhra Pradesh (Hyderabad),

4. Gujarat (Ahmedabad),

5. Meghalaya (Shillong)

The map clearly indicated the involvement of an organized agency and/or a highly professional, well-funded entity, which expends considerable effort in masking its origins.

Over 26 million Californians are under red flag warnings as residents of heavily populated Southern California brace for a record-strong Santa Ana wind event slated to begin Tuesday night and last through at least Thursday morning.

The notice comes as fire crews battle at least 11 blazes throughout the state.

In the northern part of the state, a critical wildfire danger exists in the North Bay region where the Kincade Fire is has burned over 75,000 acres and was just 15% contained as of 11 a.m. on Tuesday. Battling the blaze are over 4,500 fire personnel across 86 crews, 27 helicopters, 549 fire engines, 66 bulldozers and 42 water tankers. 124 structures have been destroyed in the fire.

BREAKING VIDEO: The #KincadeFire seen from Middletown, California; the fire has scorched over 74,000 acres and is 15% contained pic.twitter.com/ZFQJlQscKn

— News Breaking LIVE (@NewsBreaking) October 29, 2019

Critical weather conditions (dry and windy) will be a threat to parts of California again on Tuesday. @NWSSPC @NWSSacramento @NWSBayArea @NWSLosAngeles @NWSSanDiego @NWSEureka @NWSHanford @NWSMedford pic.twitter.com/ljbeMtDv9U

— NWS Western Region (@NWSWestern) October 28, 2019

747 Global SuperTanker makes a drop over the Kincade Fire. #KincadeFire @kron4news pic.twitter.com/iBkqugBcx9

— Chuck Clifford (@chuckclifford) October 29, 2019

To the south, the Getty Fire is raging west of Interstate 405 in Los Angeles, forcing wealthy residents seek shelter at a makeshift evacuation center at the Westwood Recreation Center. The 656-acre fire which was sparked when a branch fell on power lines (operated by the Los Angeles Department of Water and Power) is just 5% contained.

At least 16 schools in the Los Angeles Unified School District are now closed due to fire conditions.

According to CNN and NOAA the current threats include:

• A “remarkable and dangerous” Santa Ana winds event in Southern California — perhaps the strongest this season — is expected to bring gusts of 60-70 mph in the valleys and up to 80 mph in the mountains from late Tuesday night into Wednesday, the National Weather

The worsening conditions come as firefighters across the state battle at least 11 wildfires that have combined to leave thousands of people under evacuation orders.

In western Los Angeles, where the Getty Fire has charred more than 650 acres since Monday, the expected winds mean roughly 20,000 people under evacuation orders there “will not be returning to their homes this evening,” Mayor Eric Garcetti said.

“Stay away until we lift that order,” Garcetti said in a news conference Tuesday morning. –CNN

@LianaBrackett Here was my view coming home from pdx today. #KincadeFire pic.twitter.com/OEAjpjXXqZ

— cynpalmer (@cyn_palmer) October 29, 2019

Authored by Jacob Hornberger via The Future of Freedom Foundation,

With the exception of the U.S. national-security state and its foreign policy of empire and intervention and its torture, state-sponsored assassinations, coups, alliances with dictatorial regimes, invasions, occupations, wars of aggression, illegal and unconstitutional wars, mass secret surveillance, indefinite detention, secret prison camps, drug experimentation on unsuspecting people, denial of due process, denial of trial by jury, kangaroo military tribunals, and other dark-side practices, it would be difficult to find a better example of an evil and immoral program than the war on drugs.

Consider:

1. Everyone, including the most ardent drug-war proponent, agrees that this decades-long program has failed to achieve its goal, which is a drug-free society.

2. If failure was the only consequence of this program, that would be one thing. But it’s not. Drug laws have brought Into existence drug gangs, drug cartels, gang wars, drug assassinations, drug kidnappings, burglaries, robberies, murders, muggings, and official corruption.

3. The drug war is also the most racially bigoted government program since segregation, perhaps even more so. Under segregation, government officials used the force of law to keep the races separated, but at least they permitted blacks to keep living in the community. With drug laws, they have been able to remove blacks entirely from communities and relocate them into places called penitentiaries, where they are forced to spend a large portion of their lives. They have also been able to use drug laws to harass, abuse, insult, and humiliate African-Americans, Latinos, and other racial minorities.

That’s not to say, of course, that all law-enforcement agents and all judges are racially bigoted. It is simply to say that for those who are racially bigoted, the drug war is like heaven on earth, in that it enables them to exercise their bigotry in a legal manner and even get praised for it.

4. The drug war has played a major role in the destruction of liberty in America. Just think: They actually put people into jail for doing nothing more than ingesting a substance that politicians and bureaucrats, both at the state and federal level, don’t approve of.

Who cares whether politicians and bureaucrats approve of a particular substance? What business is that of theirs?

Actually, it’s none of their business what a person puts into his mouth. Freedom necessarily entails the right to ingest whatever a person wants to Ingest, no matter how harmful or destructive it might be. When people live in a society where government officials can punish them for ingesting unapproved substances, there is no way that people in that society can legitimately be considered free.

The repeal of drug laws — all drug laws, not just marijuana laws — is a necessary pre-requisite for a free society. It’s also a prerequisite for a just and humane society, one that treats drug addiction and drug use as a private problem, not a criminal-justice one.

While most central banks are contemplating how to gently break it to the public that since they are out of ammo with interest rates at all time low, and $15 trillion in global sovereign debt is now yielding negative – a financial abortion which suggests the value of money is negative – the only hope markets have to avoid collapse is for central banks to start buying stocks in the open market, the BOJ has no such problems: after all the Japanese central bank (alongside its Swiss peer) has for years been quite open that it purchases stocks and ETFs directly. Unfortunately, in its efforts to stabilize the market, the BOJ has been purchasing a little too many ETFs and it now owns far too much.

Last May, speaking to Japanese parliamentarians, BOJ Governor Haruhiko Kuroda noted that the central bank now owns nealry 80% of the country’s stock of ETFs, the result of a program begun in 2010 and ramped up in 2013.

Unfortunately, the program failed in its immediate task: the main goal of ETF buying was to lower Japan’s equity-risk premium – the extra returns investors expect for buying stock rather than simply parking their money in riskless government debt. A lower premium should raise stock prices and make equity financing easier for listed companies. But at just shy of 7%, Japan’s premium remains stubbornly above the U.S.’s 6%—with the gap little changed in six years – according to Aswath Damodaran, professor of finance at New York University’s Stern School of Business.

Now what is truly terrifying is that the impact of the BOJ’s massive equity purchases is actually not easily visible in Japanese stock valuations as share prices have actually fallen as a multiple of earnings during the course of the program.

Meanwhile, unlike the trillions in bonds the BOJ owns as part of its QE program, the equity purchased by the central bank does not mature and is “owned” by the bank’s until it is sold.

And while the BOJ has a long way to go before crossing that particular bridge, in the meantime it has come across a major hurdle to its monetary operations: it now owns so many ETFs, it is effectively freezing up the market.

According to the Nikkei, in order to restore some functionality to the market where volumes have collapsed in recent years, the BOJ will soon start lending shares in exchange-traded funds to brokerages as early as next spring to try to restore some of the liquidity it has drained out of the market.

As the Nikkei explains, the central bank began considering ETF lending in April “as part of a plan to improve the sustainability of its asset-buying, which has distorted markets due to its sheer scale.”

With its ETF holdings of 28.9 trillion yen ($266 billion) as of March 31, which amount to nearly 80% of the entire ETF market, the BOJ is on track to surpass the world’s largest pension fund, the Government Pension Investment Fund, as the top holder of Tokyo-listed stocks as early as next year.

Why is the BOJ suddenly worried about adding market liquidity after draining it for years? For one reason, retail investors have largely abandoned the market as a result of the illiquid conditions; more importantly, by renting out ETFs to the market, the BOJ will make it easier for itself to conduct its own ETF purchases, as well as offset some of the costs through lending fees.

According to Eiji Dohke, an analyst at SBI Securities, brokerages could borrow ETFs from the BOJ and then short-sell them back to the bank, which however could be a problem and a major conflict of interest as the BOJ is interested in pushing asset prices higher.

In any event, market makers, such as brokerages and high-frequency traders, need to keep ETF inventory on hand to ensure that retail investors can readily buy and sell. But the risk of price fluctuations limits the amount they can hold at once, making it difficult to fulfill large buy orders; as such the BOJ’s purchases have in effect paralyzed the market. Being able to borrow from the BOJ as needed would let market makers cover such shortfalls.

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Last April, BOJ head Haruhiko Kuroda told reporters that the goal of the lending program was to improve the functioning of the ETF market. Frequent ETF lending, mainly by pension funds, contributes to the abundant liquidity of the U.S. market. The proposal, which is still being finalized, has drawn criticism.

So how will the liquidity injection be implemented? In a market briefing, the BOJ said it planned to take bids for ETF lending once per month. This would require market makers to estimate demand a month in advance. Excess ETFs not sold to investors would return to the central bank, but market makers would still have to eat the cost of borrowing them.

“Being able to borrow from the BOJ whenever there’s demand and settle the transaction then would be ideal. Once a month is too little,” a market player said.

So for all those still wondering if the end of capital markets will come with a bang, or a whimper, Japan proudly lights the way: we are nearing a time when trades will only take place once a month, and only with the BOJ’s blessing, as the entire world succumbs to central planning that would make Josef Stalin green with envy.