Tag: finance

A month ago, Trump took a direct shot (one of many, actually) at his own “Justice” Department for not following up on what many in the country believe to be a fraudulent investigation by the FBI that cleared Hillary Clinton of crimes far greater than those which Special Counsel Mueller has alleged against Trump allies like Michael Flynn.

Many people in our Country are asking what the “Justice” Department is going to do about the fact that totally Crooked Hillary, AFTER receiving a subpoena from the United States Congress, deleted and “acid washed” 33,000 Emails? No justice!

— Donald J. Trump (@realDonaldTrump) December 3, 2017

Alas, according to an exclusive report from the Daily Beast, citing sources close to Attorney General Jeff Sessions, Hillary’s email problems may be just getting started as the DOJ has allegedly decided to “take a fresh look” at the FBI’s investigation of her private server.

Justice Department officials are taking a fresh look at Hillary Clinton’s use of a private email server while secretary of state, The Daily Beast has learned.

An ally of Attorney General Jeff Sessions who is familiar with the thinking at the Justice Department’s Washington headquarters described it as an effort to gather new details on how Clinton and her aides handled classified material. Officials’ questions include how much classified information was sent over Clinton’s server; who put that information into an unclassified environment, and how; and which investigators knew about these matters and when. The Sessions ally also said officials have questions about immunity agreements that Clinton aides may have made.

Stephen Boyd, who heads the Justice Department’s Office of Legislative Affairs, appeared to hint at the department’s interest in Clinton’s emails in a letter to House Judiciary Committee Chairman Bob Goodlatte on Nov. 13. In the letter, Boyd wrote that that Sessions “directed senior federal prosecutors to evaluate certain issues” the chairman was concerned about. He also wrote that those prosecutors would “make recommendations as to whether any matters not currently under investigation should be opened,” and that they would sen dthose recommendations directly to the attorney general and his top deputy, Rod Rosenstein.

A spokesperson for the Justice Department refused to confirm or deny the story from the Daily Beast.

Ironically, this new information comes just one day after a mysterious fire broke out at Clinton’s home in Chappaqua, NY…Destroying evidence can be very dangerous perhaps…

#BREAKING: Firefighters responding to a fire at Bill and Hillary Clinton’s house in Chappaqua.

— lohud.com (@lohud) January 3, 2018

Of course, as we’ve pointed out numerous times over the past year and half, the FBI’s, or more accurately James Comey’s, decision to not proceed with any charges in the Hillary email investigation has confounded many Americans given the FBI’s own documentation of what clearly seems to be intentional criminal activities.  Take for example, the time that Hillary and her staff clearly instructed their IT manager to delete emails despite full knowledge of a subpoena from Congress (see: The “Oh Shit” Moment: Hillary Wiped Her Server With BleachBit Despite Subpoena)…

Then, on March 4, 2015, Hillary received a subpoena from the House for all of her emails on her personal servers.

Which brings us to the “Oh Shit” moment.

On March 25, 2015, the Undisclosed PRN Staff Member had a “conference call with President Clinton’s staff.”  Apparently, in the days following that call, the Undisclosed PRN Staff Member had an “‘oh shit’ moment” when he realized he had forgotten to wipe the PRN server clean as he had been instructed to do back in December by Cheryl Mills. 

Therefore, sometime within the 6 days after a call with “President Clinton’s Staff,” that PRN server was wiped clean using BleachBit despite the subpoena from the House Select Committee on Benghazi received weeks earlier on March 4, 2016.

...not to mention the follow-on crime committed when Paul Combetta at first lied to the FBI about deleting the emails but subsequently “remembered.”  So, what did Combetta get for committing perjury?  Surely, he was rewarded with an indictment…just the same as Michael Flynn, right?  While that might make sense to some folks, unlike Flynn, Combetta received a sweet immunity deal for lying to the FBI instead of an indictment…(see: The “Oh Shit” Guy That Wiped Hillary’s Server With BleachBit Was Just Granted Immunity).

Meanwhile, lets not forget the clear political bias of the FBI, obstruction of justice by Obama’s attorney general, etc…

• Dismissed FBI Agent Is One Who Changed Hillary Email Scandal Language From “Grossly Negligent” To “Extremely Careless”
• Prominent Democrat Connected To Clintons Donated $675,000 To Campaign Of Deputy FBI Director’s Wife
• Bill Clinton Holds ‘Private’ Meeting With Loretta Lynch As FBI Probes Hillary

Of course, the key question is whether this is all just another distraction gimmick being employed by the White House or whether Trump intends to make good on another campaign promise…

Trump:  “If I win, I am going to instruct my attorney general to get a special prosecutor to look into your situation because there has never been so many lies, so much deception.”

Clinton: “It’s just awfully good that someone with the temperament of Donald Trump is not in charge of the law in our country.”

Trump: “Because you’d be in jail.”

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The Amazon juggernaut continues to crush brick and mortar retailers.

On Thursday morning, former retail giant Macy’s, announced that was preparing to fire 5,000 job cuts, including closure of seven previously unidentified stores and other cuts at remaining locations, as it seeks stability in a tumultuous climate for “physical retail.” The retailer’s cost reductions come as it announced that its comparable holiday sales rose a modest 1.1% for the Nov/Dec period relative to 2016.

Although the company described its holiday sales as “solid,” the performance trailed fellow department-store chain J.C. Penney, which posted a 3.4% increase Thursday. Macy’s also narrowed its FY 2018 (ending Jan. 2018) year comp. sales view to a decline of 2.4%-2.7% on owned basis, down 2%-2.3% on owned plus licensed basis and total sales down 3.6%-3.9%. This was in line with the latest forecast given in November, which called for sales down 2.2%-3.3% on owned basis, down 2%-3% on owned plus licensed basis and total sales down 3.2%-4.3%.

And while Macy’s continues to struggle with margin compression and inventory (mis)management, clearly the far bigger problem is the secular decline for the company (thank you Amazon) with Macy’s today announcing it was closing 11 stores in FY19 (year ending Jan. 2019), vs the 4 announced previously, part and parcel with the 5,000 laoffs, as well as the company’s intentions to “further streamline some non-store functions.”

Macy’s disclosed the following seven locations for shuttering which it had previously not identified for closure:

• Miami (Downtown), Miami
• The Oaks, Gainesville, Fla.
• Novato (Furniture), Novato, Calif.
• Honey Creek Mall, Terre Haute, Ind.
• Birchwood Mall, Fort Gratiot Township, Mich.
• Fountain Place, Cincinnati
• Burlington Town Center, Burlington, Vt.

The retailer also said Thursday it is moving ahead with four other store closures previously announced:

• Laguna Hills Mall, Laguna Hills, Calif.
• Westside Pavilion, Los Angeles
• Stonestown Galleria, San Francisco
• Magic Valley Mall, Twin Falls, Idaho

Putting the closures in context, they are are part of a plan announced in August 2016 to shutter 100 stores. Altogether, the company has now revealed 81 of the 100 locations.  Macy’s sees closing an additional 19 stores as leases or operating covenants expire or sale transactions are completed. Including the stores announced today, M has closed 124 stores since 2015.

Macy’s ongoing woes are good news for bargain hunters: the company said that liquidation sales are likely to begin Jan. 8 and continue for eight to 12 weeks.

“Looking ahead to 2018, we are focused on continuous improvement and will take the necessary steps to move faster, execute more effectively and allocate resources to invest in growth,” Macy’s CEO Jeff Gennette said in a statement.

Macy’s has been struggling with its massive real estate footprint and traditional retail model, as Amazon.com soars and physical competitors such as treasure-hunt retailers T.J. Maxx and Marshall’s offer (better and cheaper) alternatives. Despite the challenges, Macy’s reported strong performances for active apparel, beauty products, shoes, dresses, coats, fine jewelry and some other items.

Ironically, the company also said its digital sales jumped by double digits. The problem is that when compared with Amazon’s own same store sales – all digital of course – it is too little, too late.

* * *

But what is most troubling for Macy’s, is the stock’s reaction to today’s news: whereas in the past, M would jump on any mass layoff and/or closure news, this time it enjoyed a brief kneejerk moment in the green, before tumbling.

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Authored by Nick Cunningham via OilPrice.com,

The U.S. rig count has been on the rise for months, despite some recent hiccups, but Canada’s rig count recently plunged amid low oil prices.

Canada’s rig count fell from 210 to 136 for the week ending on December 29, a massive drop off. That took the rig count to a six-month low. Obviously, the losses were concentrated in Alberta, where most of the rigs tend to be. Alberta’s rig count sank from 162 to 118 in the last week of 2017. But Saskatchewan also saw its rig count decimated—falling from 43 in mid-December to just three at the close of the year.

The losses can likely be chalked up to the meltdown in prices for Canadian oil. Western Canada Select (WCS), a benchmark that tracks heavy oil in Canada, often trades at a significant discount to oil prices in the United States. But the WCS-WTI discount became unusually large in November and December for a variety of reasons. The outage at the Keystone pipeline led to a rapid buildup in oil inventories in Canada, and storage hit a record high in December.

Also, Canada’s oil industry has been unable to build new pipelines to get the landlocked oil from Alberta to market. Alberta oil producers are essentially hostage to their buyers in the U.S., and with oil production now bumping up against a ceiling in terms of pipeline capacity, the glut is starting to weigh on WCS prices.

In December, Enbridge announced that it will ration the space on its Mainline oil pipeline system for January as Canada’s pipelines are essentially at full capacity. Enbridge said that it will apportion lines 4 and 67, which move heavy crude, by 36 percent. The term “apportionment” is a euphemism for rationing—essentially oil producers are unable to get all of their product onto the pipeline and are hit with restrictions. That means the oil has to be diverted into storage.

In short, there’s somewhat of a glut of supply in Canada right now. The problem is that there’s little prospect of a solution in the near-term. Railroads, although they are taking incrementally more cargoes, cannot handle the excess supply all on their own, especially with new supply coming online. And there are no serious pipeline capacity additions expected for about two years at the earliest. The three main proposals—Kinder Morgan’s Trans Mountain Expansion; TransCanada’s Keystone XL; and Enbridge’s Line 3 replacement—all face legal questions and uncertain completion dates.

On top of that, Canada’s oil sands producers are adding new supply. At today’s prices, it makes little sense to greenlight new upstream projects, particularly in expensive oil sands. But there are still some projects that are finishing up that were given the go-ahead years ago when oil prices were substantially higher. Suncor Energy is set to bring its Fort Hills project online, which will add nearly 200,000 bpd of new supply within 12 months.

That all means that the pressure on WCS probably won’t go away. The price meltdown from two months ago is probably now showing up in the rig count. The U.S. typically sees the rig count fluctuate in response to changes in the oil price by several months, and the rig count in Canada will only now start to reflect the price plunge from months ago. The rail industry might handle more oil cargoes, which could help push up WCS a bit, but the larger-than-usual discount might persist for some time.

Canada could add new refining capacity to process all of that oil right at home, an option that is often raised when WCS prices tank. IHS Markit recently studied several scenarios for Canada’s oil industry, including upgrading existing refineries to process heavy oil into a lighter synthetic form of oil, as well as building entirely new refineries. IHS Markit concluded that there is an opportunity to convert existing refineries, but that the abundance of light oil supply in North America could challenge the economics. New refining capacity is a risk. In any event, refined products and lighter oil would still need to be exported via pipeline.

In short, Canada’s oil industry faces more obstacles than, say, the much-watched shale drillers in the United States. The U.S. rig count is closely tracked around the world for clues into what happens next in the oil market—an increase is assumed to mean that more U.S. shale supply will be forthcoming while a decrease is a sign of market tightness and potentially higher prices. The publication of this weekly data has global implications.

Canada’s rig count, on the other hand, could continue to struggle even as U.S. shale drillers spring into action in response to higher prices. Canadian producers won’t benefit as much from the upswing in the global market due to their local and regional problems, mostly related to the lack of pipeline capacity.

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Russia has joined China in calling for a policy of non-interference in Iran’s domestic affairs after a week of unrest has gripped multiple major cities and towns across the country in what started as protests over economic grievances, but which have since increasingly turned to riots and calls for President Rouhani and the clerical regime to step down, resulting in the deaths of at least 22 people, including at least one police officer who was shot dead.

In remarks given to Russia’s TASS news agency Russian Deputy Foreign Minister Sergey Ryabkov expressly warned the US “against attempts to interfere in the internal affairs of the Islamic Republic of Iran,” while stressing, “What is happening there is an internal affair, which attracts the attention of the international community.” Russia’s stance is similar to that of China’s voiced previously on Tuesday. When asked about the Iran protests at a regularly scheduled press conference, China’s foreign ministry spokesperson Geng Shuang simply gave a one-sentence answer, saying, “China hopes that Iran can maintain stability and achieve development.”

Image source: Reuters via al Monitor

Both Russia and China – permanent members of the UN Security Council – have already signed deals worth billions to develop sectors related to travel, energy, and infrastructure, soon after international sanctions were lifted in January 2016 as part of the 2015 nuclear deal brokered by the United Kingdom, United States, France, Russia, China, and Germany. Last August Russia and Iran signed a $2.5 billion deal to jump start the rebuilding of Iran’s ailing rail lines. Forbes described Iran as poised for an “infrastructure building bonanza” at a moment when trade with Russia doubled over the course of 2016, which has included the sale of military equipment such as helicopters and various rocket systems, and has also seen Russian oil and gas giants such as Gazprom quickly move into Iran. Both countries have also cooperated militarily in Syria since Russia’s entry into the war at the invitation of the Assad government in 2015. 

As we’ve previously noted, Western firms have been reluctant to invest heavily in Iran with the ever looming possibility of new US sanctions under the Trump administration – a concern now greatly compounded after a week of internal protests in the country considered a longtime enemy especially of both the US and Israel.

In mentioning the overblown and premature attraction of “the attention of the international community” Ryabkov appears to be referencing recent statements issued by Israeli Prime Minister Benjamin Netanyahu and President Trump, among others. On Wednesday Trump tweeted an ambiguously threatening message, stating, “Such respect for the people of Iran as they try to take back their corrupt government. You will see great support from the United States at the appropriate time!” This came after the State Department issued an official statement at the end of last week which explicitly mentioned “transition of government in Iran.” The statement expressed US support for protesters, and further referenced “those elements inside of Iran that would lead to a peaceful transition of government. Those elements are there, certainly as we know.” 

Such respect for the people of Iran as they try to take back their corrupt government. You will see great support from the United States at the appropriate time!

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

Though Trump didn’t explain what was meant by “great support” this could mean any one or more scenarios involving new sanctions, lobbying the UN to condemn Tehran authorities, threatening military action, or giving official or covert support to opposition factions both in exile and on the ground. Trump’s most recent Iran tweet followed an equally inflammatory declaration that, “Iran is failing at every level despite the terrible deal made with them by the Obama Administration. The great Iranian people have been repressed for many years. They are hungry for food & for freedom. Along with human rights, the wealth of Iran is being looted. TIME FOR CHANGE!” Vice President Pence has also weighed in. He stated Wednesday after penning a Washington Post op-ed pledging support to the people of Iran, “Today, the Iranian people are once again rising up to demand freedom and opportunity, and under President Trump, the United States is standing with them. This time, we will not be silent.” 

Russian Deputy FM Ryabkov’s response touched on the Iran deal in relation to the heightened international rhetoric. He stated, “However, despite numerous attempts to distort the essence of what is going on, I am certain that our neighbor, the country that is friendly to us, will be able to overcome the current difficulties and emerge from the current period as a stronger country and a reliable partner in solving various problems, including those related to the further implementation of the Joint Comprehensive Plan of Action (JCPOA).”

“All the terms, timeframes and frameworks that were set in the JCPOA were the result of very difficult and very lengthy negotiations,” the senior diplomat further explained, recalling what Russia sees as recent US maneuvers to undermine the deal. “Therefore, taking out of the package arbitrarily only what suits the Americans and demanding amending those provisions, which, for some reasons that are unknown to us, do not suit the Americans is a destructive approach. It can undermine the agreement reached with difficulty.”

Ryabkov also accused the US of intentionally using the current Iran unrest to try to undermine the sustainability of the JCPOA, charging, “The current situation when Washington yields to temptation to take advantage of the moment to bring up new questions with regard to the JCPOA testifies to a deliberate attempt to undermine the global community’s commitment to the JCPOA. That does no credit to our American counterparts.”

On Monday, Israeli PM Netanyahu delivered a televised message directed at Iran via YouTube wishing “the Iranian people success in their noble quest for freedom” – this after authorities in Tehran accused protest leaders of serving the interests of and being in league with foreign “enemies” like Saudi Arabia and Israel.

“I heard today Iran’s President Rouhani’s claim that Israel is behind the protests in Iran,” said Netanyahu in the video. “It’s not only false. It’s laughable – unlike Rouhani, I will not insult the Iranian people. Brave Iranians are pouring into the streets. They seek freedom. They seek justice. The seek the basic liberties that have been denied to them for decades.” Both Trump and Netanyahu’s statements have possibly given Iran greater reason to fear that internal unrest could gain momentum through being supported by outside forces – though new reports suggest that popular protests could be dying down. 

* * *

Meanwhile Iran responded to US statements in a formal letter to the United Nations, slamming Trump’s “absurd tweets” and complaining that Washington is intervening “in a grotesque way in Iran’s internal affairs” while accusing Trump and Pence of personally stirring up trouble and inciting “Iranians to engage in disruptive acts.” The letter to UN officials by Iranian Ambassador Gholamali Khoshroo further charged that the US leaders have “crossed every limit in flouting rules and principles of international law governing the civilized conduct of international relations.”

And it appears that Iran has at least one Western voice of support to its argument that rhetoric from the US and its allies is unnecessarily and dangerously ratcheting up the situation. On Wednesday’s France’s President Emmanuel Macron blasted statements from Washington and Israel, telling reporters, “The official line pursued by the United States, Israel and Saudi Arabia, who are our allies in many ways, is almost one that would lead us to war.” He charged that some countries seemed to be engaged in a “deliberate strategy” to undermine the JCPOA. 

“Otherwise, we end up surreptitiously rebuilding an ‘axis of evil’,” Macron said in reference to an infamous phrase by former President George W. Bush, who used the phrase to describe countries including Iran, Iraq and North Korea. Macron further warned of going down a path of a “conflict of extreme brutality” should US pressures on Iran continue. 

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Flights at JFK airport have been temporarily suspended “due to strong winds and whiteout conditions” caused by Winter Storm Grayson.

Due to strong winds and whiteout conditions, flights at JFK have been temporarily suspended. Travelers are urged to contact their airline carriers for updates on resumption of service

— Kennedy Airport (@JFKairport) January 4, 2018

“Travelers are urged to contact their airline carriers for updates on resumption of service,” the JFK Twitter account advised.

New York Gov. Andrew Cuomo declared an official weather emergency in New York City, Long Island and Westchester County on Thursday as the storm is expected to drop up to a foot of snow on New York City.

Nearly all flights out of La Guardia, New York City’s other major airport, were cancelled late last night in anticipation of the storm.

Almost all #LGA airport flights are cancelled today (January 4) due to weather. To determine if your carrier may still operate later this evening or what your flight status will be tomorrow (January 5), please contact them directly.#LaGuardia #Winterstorm #Grayson #Blizzard2018 http://pic.twitter.com/ER6kjeFigR

— LaGuardia Airport (@LGAairport) January 4, 2018

Newark Airport warned flyers to double check on the status of their flights because many had been cancelled.

Weather conditions are affecting many flights at #EWR. We strongly urge you to check with your carrier on the status of your flights. Thank you. http://pic.twitter.com/Pa40lvKmZp

— Newark Airport (@EWRairport) January 4, 2018

The airline-tracking site FlightAware is reporting more than 3,200 canceled flights within, into, or out of the United States on Thursday, the Associated Press reported.

The massive winter storm is sweeping from the Carolinas to Maine, dumping snow along the coast and bringing strong winds.

The governor of Massachusetts is warning of possible prolonged power outages resulting from the strong snowstorm that is pummeling the East Coast, to be followed by more severe cold.

Gov. Charlie Baker said during a morning briefing Thursday that emergency officials are prepared to open shelters in southeastern Massachusetts and Cape Cod, where heavy wet snow and howling wind gusts of 60 mph or higher pose the greatest threat of outages.

The strong winds could also make it difficult, if not impossible, for utility crews to use bucket trucks to quickly restore downed power lines.

In Connecticut, Gov. Dannel P. Malloy says more than 100 warming centers are open in 34 towns. Malloy says the state has 634 state plow trucks and 250 contractors working to clear the highways.

Already, two deaths in North Carolina are being blamed on the East Coast snowstorm.

Authorities say two men died during the winter storm Wednesday night when their pickup truck overturned into a creek.

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Republicans across Virginia breathed a sigh of relief when moments ago a random draw determined that Republican David Yancey would keep his seat in the Virginia House of Delegates after a state official pulled his name out of a bowl Thursday, deciding a contest that ended in a tie in November. As a result of nothing more than luck, the GOP will also keep control of the chamber.

Or, as one twitter commentator put it, “welcome to 2018 where a $9.99 product from Crate & Barrel determines elections…”

JUST IN: Virginia Board of Elections randomly chooses Republican David Yancey as winner of previously tied Virginia House of Delegates race http://pic.twitter.com/wKUvwZX4CG

— NBC News (@NBCNews) January 4, 2018

The draw took place after Yancey and Democrat Shelly Simonds each received 11,608 votes in their Newport News-based district. Initial results showed Yancey leading by just ten votes. A recount gave Simonds a one-vote edge. But Republicans challenged a single ballot, resulting in a tie, the Hill reported.

Democrats sued to overturn the challenge, but on Wednesday a three-judge panel rejected their complaint. That led to Thursday’s drawing, in Richmond, out of a special bowl crafted by the resident potter at the Virginia Museum of Fine Arts.

The lucky draw has major implications as Yancey would be the 51st Republican in the 100-member House of Delegates. Before November’s elections, Republicans held 66 seats. But Democrats put up a surprisingly strong showing, netting 15 Republican-held seats — and coming within a single vote of claiming a tie.

Virginia state law allows the loser of the draw to request a second recount. Simonds said Wednesday she would not request a second recount if she lost the drawing. Yancey declined to make the same pledge, although luckily he wont have to.

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One month ago, in what appeared to be an imminent diplomatic victory for North Korea’s president Kim Jong-Un, we reported  that Kim’s regime may have “successfully bluffed its way into getting the US to stop holding massive army drills with South Korea’s army.” As the FT further noted, South Korea asked the US to “delay” joint military exercises until after the Winter Olympics, in order to lower the chances that North Korea takes provocative actions during the Pyeongchang Games, which Seoul wants to use to showcase the country’s development.

Well, if it was North Korea’s intention to bluff its way into blocking joint military drills off the Korean peninsula, it succeeded because as the WSJ reports, President Trump and South Korean President Moon Jae-in agreed not to hold springtime military exercises during the Olympics, the South Korean president’s office said Thursday, a move that could cool tensions with North Korea.

The agreement came during a 30-minute phone call between the two presidents, Seoul’s presidential Blue House said in a statement.

As noted last month, Moon had requested the U.S. delay the annual exercises, which Pyongyang has railed against, so they don’t coincide with the Paralympics, which end on Mar. 18. Meanwhile, disagreement has been brewing between Seoul and Washington over how to rein in North Korean leader Kim Jong Un’s nuclear weapons program. The U.S. late Wednesday in Washington requested South Korea arrange the call, an official at the Blue House said, declining to comment further.

The detente took place in the past 48 hours, however, when the Moon administration seized on an opening from North Korea to propose a face-to-face meeting next week to discuss its atomic weapons program and an announcement by Kim that he would consider sending a delegation to the Winter Olympics in the South Korean ski resort of Pyeongchang next month.

“We will closely cooperate with the U.S. in any talks with the North, and strongly believe inter-Korean talks will help create a mood desirable for U.S.-North Korea talks aimed at resolving the North Korean nuclear weapons issue,” Moon said in the call, according to the Blue House, which also said that Trump said “the U.S. supports Mr. Moon 100%.“

The statement avoids another potentially embarrassing diplomatic fiasco: as the WSJ notes, the talks have emerged as a point of tension. Seoul has tried to dispel rumors that it approached the North without consulting the U.S.

It has also tried to assuage concerns that talks could lead to a cancellation of the springtime military exercises.

“The South Korean government disagrees with the idea of cancelling the military exercises in return for the North halting its nuclear weapons program,” South Korean Foreign Ministry Spokesman Roh Kyu-deok said in a press briefing Thursday. The South also consulted the U.S. through diplomatic channels before proposing talks on Tuesday, he added.

South Korean Foreign Minister Kang Kyung-wha said the South would aim to better relations with the North, while also cooperating with global efforts to resolve the North Korean nuclear weapons program.

The South Korean defense ministry in a separate briefing Thursday dismissed reports that the North could be preparing a missile launch, saying the South had not detected any unusual activities hinting a launch was near, declining to comment further.

* * *

Meanwhile, Trump did everything in his power to save face in light of the detente between the two Koreas by trying to take credit for the apparent thawing of diplomatic tensions between the two nations, stating that his “firm and strong” stance has enabled talks.

Trump, who has openly traded insults with Kim and once suggested North Korea’s long-range missile program should be met with “fire and fury,” tweeted on Thursday that his approach to the delicate situation had fostered an environment for talks.

With all of the failed “experts” weighing in, does anybody really believe that talks and dialogue would be going on between North and South Korea right now if I wasn’t firm, strong and willing to commit our total “might” against the North. Fools, but talks are a good thing!

— Donald J. Trump (@realDonaldTrump) January 4, 2018

Slamming “failed experts,” Trump asked if the recent communication between North and South Korea would really be happening without his involvement. “Fools, but talks are a good thing,” the US president added.

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WTI/RBOB were sinking into the DOE data, despite API’s solid crude draw data, after tagging $62/$1.81 overnight. Official data confirmed API’s with the seventh straight week of crude builds (biggest crude build since Aug) and gasoline draws but it was distillates’ massive build (most since Dec 2016) that stood out.

A pull-back in prices might be seen if builds in gasoline and distillate inventories are larger than a crude oil decline, according to Bob Yawger, director of the futures division at Mizuho Securities USA. Yet, a second weekly drop in U.S. crude production would be “a bullish indicator.”

Bloomberg’s Intelligence Energy Analysts Fernando Valle and Vince Piazza note the potential weather effects…

Although winter usually ushers in a slowdown in demand, refiners are being encouraged to use domestic crude instead of imports tied to the Brent benchmark, whose price remains elevated because of Middle East tensions.

Cold weather in the Northern Hemisphere is having diverging effects on distillates and gasoline. It’s making distillate refining margins larger, putting downward pressure on supplies, while gasoline cracks are likely to narrow as frigid temperatures discourage domestic demand and exports.

API

• Crude -4.992mm (-5mm exp)
• Cushing -2.11mm
• Gasoline +1.87mm (+2mm exp)
• Distillates +4.272mm (+500k exp) – biggest build since Jun 2017

DOE

• Crude -7.419mm (-4.7mm exp) – biggest draw since Aug 2017
• Cushing -2.441mm
• Gasoline +4.813m(+2mm exp)
• Distillates +8.899mm (+500k exp) – biggest build since Dec 2016

This is the seventh straight week of crude draws and gasoline builds but it is distillates’ massive 8.9mm builds (the most since Dec 2016) that stands out… As Bloomberg notes, Distillate shipments were the lowest since ports were shut post-Hurricane Harvey in September. That accounts for at least 2.5 million of the distillate stock build.

Bloomberg Intelligence Energy Analyst Fernando Valle:

The massive refined product builds of 4.8 and 8.9 million barrels for gasoline and distillate, respectively, will dampen optimism for the 7.4 million barrel crude withdrawal. Implied demand fell significantly, impacted by the holiday season and a large drop in product exports.

Notably Cushing stocks have declined considerably, nearing their 5-year average for the first time since Jan 2015.

Imports to the Midwest hit a record of almost 3 million barrels a day last week. Enbridge’s pipelines are filled to the gills, and the deep discount of heavy Canadian crude has opened the arb for rail shipments.

Total crude inventory is now at its lowest since Oct 2015 (but is still around 28% above the pre-2014 normal average)…

Production fell the prior week for the first time since the hurricanes, but rebounded in the latest week by 28k b/d…

“We may soon see an end to the rally because prices at this level will only make U.S. drillers boost production,” said Will Yun, a commodities analyst at Hyundai Futures Corp.

WTI traded above $62 overnight continuing its best start to a year since 2012. This is the highest in three years as optimism on the global economy, cold weather and political unrest bolstered a market that’s finally shaking off a prolonged surplus. But while the overnight session was exciting, WTI/RBOB prices slid lower into the DOE data and the machines seemed unsure which way to run prices after the data…

“The year has started very, very well for OPEC,” Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd., said in a Bloomberg television interview.

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Authored by Mike Shedlock via http://ift.tt/2wOif0B,

Let’s investigate six reasons economists think inflation is about to pick in 2018, and why I think they are dreaming.

Reason Number One – Wage Hikes

Minimum wages rise in 18 states starting in 2018.

Former Fed Vice-Chairman Stanley Fischer told Bloomberg TV on October 4, “I still believe we will have higher inflation. The basic mechanism here is unemployment is declining all the time, wages will start going up at some stage.”

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2017 was a great year for bulls and vol sellers: so good, in fact, that cross-asset volatility dropped to never before seen levels while making millionaires out of former Target managers who “sell vol for a living“, while the Dow Jones Industrial Average ETF (DIA) posted one of the best volatility adjusted returns last year of the ETFs in Goldman’s universe, closing +28% (S&P500 +22%) on a realized vol of 7%, in line with the S&P500.

However, according to a just released report by Goldman’s derivatives strategists Katherine Fogarty and John Marshall, the clam appears to be ending, and the options market is now pricing in higher volatility in the fund as well as in junk bonds, the S&P 500, consumer and tech stocks.

Meanwhile Gold, E&P, and Biotech stocks are pockets of the market where option investors expect a similar level of volatility in 2018 as seen last year.

Some more details from Goldman:

• What parts of the market do option investors expect to make n bigger moves in 2018? Coming off extremely low realized volatility in 2017, the options market is broadly bracing for a pickup in volatility this year. At the ETF level, the options market is most focused on the potential for volatility to move higher in Index, High Yield, Consumer and Tech stocks.
• Where do options investors expect volatility to be more consistent with 2017? Gold, E&P, and Biotech stocks are pockets of the market where options investors expect a similar level of volatility in 2018 as seen last year.
• Where do options markets expect the biggest moves to come from in 2018? While the option markets are generally taking a more conservative stance on the cadence of volatility for high volatility assets in 2018, they are still expecting the biggest moves to come from Gold (GDXJ +/-27%), Oil (OIH +/-23%) and E&P Stocks (XOP +/-23%). At the stock level, while option investors are positioning for the average stock in the S&P500 to trade +/-22% over the next 12 months, they are expecting certain stocks to realize double or more this volatility:

What does this relative skew mean in terms of bullish or bearish directionality: here is Goldman’s answer:

• Where are option investors positioned BULLISH for 2018? Option investors are pricing in an unusually low premium for puts relative to calls in Oil (OIH), Staples (XLP), E&Ps (XOP) and Financials (XLF). This suggests they are less worried about downside risks and positioned for further upside potential this year.
• Where are option investors positioned BEARISH for 2018? Option investors are paying an unusually high premium for out of the money puts in High Yield (HYG) and S&P500 (SPY) relative to calls. We note the higher skew in popular  hedging instruments (HYG and SPY) could be a sign that investors are increasing their portfolio hedges given the low volatility environment.

Directional bias aside, according to Goldman’s calculations, this is where the options market expects the biggest ETF moves in 2018: Index vol as well as High Yield, Consumer and Technology vol in 2018, and as Goldman adds, “coming off of a very low base of volatility realized in 2017, it’s notable that the options market is pricing in elevated volatility levels for 2018 for the vast majority of the US ETFs we monitor.” Some more details:

Here are the 4 key categories where Goldman sees abnormal volatility going forward:

• The Dow Jones Industrial Average ETF (DIA) returned 28% last year (on realized vol of 7) yet the options market is pricing in that the ETF generates less than half of the return in 2018 on double the volatility (11% / 14.3%, respectively).
• High Yield option investors are also pricing in elevated volatility potential, as well as high level of concern, as suggested by elevated normalized put-call skew levels across tenors. As an example, iShares iBoxx $ High Yield Corporate Bond ETF (HYG) returned 6% last year on a realized volatility of 4. The options market is pricing in the potential for the ETF to trade up or down 7% by January 2019 expiration on a realized vol of 7, double the realized volatility of 2017. A similar setup is seen in the SPDR Barclays High Yield Bond ETF (JNK).
• Consumer Discretionary ETF investors are also positioning for higher volatility in 2018. XLY returned 23% in 2017 on a realized volatility of 8%, generating among the highest Sharpe ratios in our universe. Option investors are pricing in that the XLY returns +/-13% by January 2019, yet realizes a volatility that is 73% higher than what we saw in 2017.
• Options on Technology focused ETF QQQ and the Technology Select Sector SPDR Fund (XLK) are both pricing in the potential to return substantially less returns in 2018 than in 2017 yet the options market is expecting higher volatility for both. January 2019 $160 straddles for QQQ cost 14%, suggesting the options market is pricing in the potential for the QQQ to close up or down by this amount by expiration. This is substantially less than the 33% return that QQQ posted in 2017 on a realized vol of 10%.

To summarize: “Option investors are pricing in BULLISH views in Energy, Staples, and Financials, but BEARISH High Yield and S&P500. We look to skew as a measure of sentiment, and compare 1yr skew today to levels seen over the past five years.”

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