Obama and Putin Likely to Have Informal Talks as Russia Advances on Ukraine

President Barack Obama are
likely to have informal talks with Russia’s Vladimir Putin as
tensions continue to rise over the war in Ukraine.

Both the leaders are scheduled to be at the Asia-Pacific (APEC)
summit in Beijing and the G20 summit in Brisbane next week.
Although an “official bilateral meeting between Obama and Putin
[is] not anticipated,” a senior U.S. official
tells
Reuters, “there [is] a good chance they would find time
to talk informally at the APEC gathering.” The two will also likely
talk about Syria and the ISIS insurgency.

The State Department this week
blasted
Russia for supporting “sham” elections that put
pro-Kremlin puppets in power in the war-torn eastern regions of
Ukraine. “Should Moscow continue to ignore the commitments that it
made [honoring Ukraine’s electoral law] and continues its
destabilizing and dangerous actions, the costs to Russia will
rise,” the department stated.

The U.S. and its European Union allies have been trying to
de-escalate Russian aggression through both targeted and broad
economic sanctions. German Chancellor Angela Merkel today
suggested
more robust sanctions to punish Putin. Russia’s
economy is suffering,
due in large part
to Putin’s own poor handling, and the
nation’s currency is at record lows.

The war, which has already taken the lives of about 4,000 people
and displaced countless others, shows signs of getting worse.
Russia continues to violate ceasefire and political agreements made
last month, called the Minsk Protocols. “Recently we are seeing
Russian troops moving closer to the border with Ukraine. … Russian
special forces [are] inside eastern parts of Ukraine,”
says
Jens Stoltenberg, Secretary General of NATO. The U.S. is
the largest supplier of troops and funding for NATO.

Russian-American relations look like they’ve hit their lowest
point since before the Soviet Union crumbled. Reason
recently highlighted the fact that American diplomats are being
harassed, White House computers have been hacked, and Russia is
flying provocative,
nuclear-capable flights over Europe
. Also, a Moscow art gallery
just opened featuring a caricature of
Putin spanking Obama
.

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John Stossel on Electing Liberty

Before
yesterday’s election,
Ann Coulter warned
liberty-loving citizens against voting
Libertarian because “nothing matters more to the country than
Republicans taking a majority in the Senate.” It’s this sort of
mindset that distracts us from defending something far more
important than either party: individual liberty.

Democrats want government control of the economy and more
regulation of speech, innovation, medicine, school, and all kinds
of things. But Republicans want to control our personal lives and
fight constant wars abroad. It’s time America obsessed less about
Republicans vs. Democrats, argues John Stossel, and more about
electing liberty, in all its forms.

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The Most Ridiculous Seasonal Adjustment You Will Ever See

Moments ago, in an attempt to put some lipstick on what as we previously showed was a very poor ISM (and Markit) Service PMI, Goldman focused on the only silver lining it could find: employment. This is what Goldman’s Kris Dawsey just said: “However, employment continued to rise to a very strong level (+1.1pt to 59.6). The employment index now stands close to the series high of 60.2 set in August 2005, a favorable indicator for Friday’s employment report. Prices paid moved down (-3.1pt to 52.1), mirroring the decline seen in the ISM manufacturing report released earlier this week. Despite the headline miss, today’s ISM nonmanufacturing report is consistent with a solid pace of expansion in service sector activity. “

Which, if one looks at the (seasonally-adjusted) history showing the Institute for Supply Management’s Service Employment data, would make perfect sense: it is indeed near record highs.

Surely that last leg, showing “Employment” soaring in 2014 has nothing to do with the mid-term elections, and is fully rooted in reality, right.

Well wrong, and not just because said elections showed how Americans feel about the real, not fake, economy.

Because sadly for ISM’s attempt to endlessly manipulate the data, for Goldman’s endless attempts to spin the data, and most of all, for the US worker, who despite pretty charts showing otherwise, still can’t find a well-paying job and showed his feelings during yesterday’s election, here is what really happens.

Every month a number of respondents are asked how they see the employment situation in real-time, unadjusted. They are given three simple choices:

  • Higher
  • Same
  • Lower

The final employment index is tabulated by taking the average of the Higher and Same prints, and then applying a seasonal adjustment factor to the result to obtain the final number, which is shown in the blue lines above and below.

There is a small problem, however, because of all the data noted above, the most important, if not only, thing that matters is how many respondents see “higher” employment. Everything else is a math formula and a fudge factor.

So what does the actual data look like?

In the chart below we have shown the progression of the “Higher” responses over the past year. As of October, only 22% of respondents saw a pick up in employment, 67% responded “Same” and 11% expecting “lower.”

Long story short, 22% was the lowest print since April.

In other words, what happened in October is that an unadjusted response which indicated the weakest labor market in half a year, was magically transformed into almost the best print in the history of the Employment series.

How?

Seasonal Adjustments. Unfortunately, Americans don’t have the option of paying with “seasonally adjusted” money they don’t have, in compensation of a “seasonally adjusted” job they don’t hold.

Is there any wonder then that yesterday’s Midterm election result – a furious popular repudiation of Obama’s fake economy – was what it is?




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Democrats Turn on the Real Enemy: Each Other

Thoughtful ObamaEven before the Democratic
Party’s…drubbing
(that seems to be the favored term this time around) in yesterday’s
elections, the White House was already blaming its supposed allies
for the defeats that were (correctly) anticipated once voters
trooped to the polls.

“Ultimately, you know, it’s the quality of these candidates
that’s going to be the driver of their success in this election,”
White House Press Secretary Josh Earnest
said Monday
in what just might be taken as a slap at political
hopefuls who were frantically distancing themselves from the aura
of electoral leprosy surrounding President Obama.

Oh no you don’t, legislative Democrats responded. It’s the
albatross tie in the Oval Office who sealed our doom.

“The president’s approval rating is barely 40 percent,”
said David Krone
, chief of staff to (soon to be former) Senate
Majority Leader Harry Reid. “What else more is there to say? . . .
He wasn’t going to play well in North Carolina or Iowa or New
Hampshire. I’m sorry. It doesn’t mean that the message was bad, but
sometimes the messenger isn’t good.”

After most of the votes were counted and the extent of the
Republican wave—or Democratic washout—was clear, Dems lined up to

swing a bit more at the presidential piñata
. Sen. Joe Manchin
(D-W.Va.) openly blamed Obama’s energy policies, while other’s
essentially referred to him as a boat anchor on anybody with a “D”
next to their names.

There’s nothing unique about this round of fingerpointing.
Political parties should reasses themselves after they take a
drubbing/shellacking/whatever to consider whether they’re
advocating policies or behaving in ways that the electorate finds
especially stupid or offensive. Republicans have
done this in the past
, including after their disappointing
performance in 2012. It’s a big part of the reason the party ran
far fewer
overt loons
for office this year.

Now it’s the Democrats’ turn. With an
unpopular president
carrying their party’s standard and
despised policies in
health
,
climate, and energy
to their name, they need to take a hard
look at the fundamentals.

And for those of us who have to live with what elected officials
hath wrought, it’s finally time to grab the popcorn and get some
entertainment out of the latest round of fingerpointing.

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Republican Governors Fought Labor Unions and Lived to Tell the Tale

Rick SnyderWhile the Republican reconquest of the Senate was
widely anticipated, things had seemed a little shakier for certain
Republican gubernatorial candidates in the run-up to the election.
The Senate candidates were expected to ride a wave of anti-Obama
sentiment to Washington, D.C., but back in the states, Republican
politicians who challenged the powerful labor coalition could have
been in trouble.

But Wisconsin Gov. Scott Walker and Michigan Gov. Rick Snyder,
both Republicans, won re-election yesterday, proving that it’s
possible to kick the hornet’s nest and walk away unscathed.

Walker, known for pushing tough reforms on public sector unions,
has now survived both a recall attempt and a re-election campaign.
Snyder, who signed a right-to-work bill into law, guided Detroit
through municipal bankruptcy, and reined in public sector unions,
was marked for death by Big Labor in blue-ish Michigan. But he
prevailed as well—by a less-close-than-expected margin of four
points.

Big Republican wins in the states will probably produce some
results that are unfriendly to libertarian positions, particularly
on social issues. But as far as labor reforms go, Republican
gubernatorial victories were a massive validation of the effort to
combat bankruptcy-inducing government employment levels and curb
the runaway power of unions.

Read more from Reason on why the power and influence of teachers
unions seems to subsiding
here
.

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Berkeley Passes Sin Tax on Soda

The city of Berkeley, California, took another step away from
its freewheeling past yesterday. Politico
reports
:

The day they put the mind of a cop into the head of a hippie.Berkeley, Calif., a city known
for its progressive politics, made history Tuesday night by
approving the first real sin tax on soda in the United
States.

Voters approved Measure D, a penny-per-ounce tax, by a three-to-one
margin after a bitter campaign battle, with the beverage industry
spending more than $2.1 million to oppose the initiative. The
pro-tax campaign was bolstered by more than $650,000 from former
New York City Mayor Michael Bloomberg.

Berkeley has now done what more than two dozen other cities and
states have tried and failed to do in recent years: Put in place a
punitive tax on sugar sweetened-beverage tax designed to reduce
consumption and raise revenue. The measure, which covers sports
drinks, sweet teas and beverage syrups used in coffee shops, would
raise the price of a 20-ounce Coca-Cola by about 10 percent. The
tax, which does not apply to diet sodas, kicks in Jan. 1,
2015.

The prohibitionist impulse fared more poorly across the bay,
where a similar measure failed in San Francisco.

Speaking of local referendums and the regulation of people’s
pleasures, I should also note some happy news from South Portland,
Maine, where voters
approved a ballot measure
decriminalizing the possession of up
to an ounce of marijuana. That has understandably received less
attention that legalization’s
big victories
yesterday in Alaska, Oregon, and D.C., but it’s
still worth noting. Celebrate with the burning weed or sugary
beverage of your choice.

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Oil Prices Spike On Saudi Fears

Oil prices are spiking (WTI crude is up $3 off this morning’s lows) following the pipeline explosion in Saudi Arabia. Of course, energy stocks are surging on the news too and we are just waiting for some clever talking head to proclaim this surge as demand-driven showing how strong the economy is…

Oil is surging…

 

Some context for the move…

 

and energy stocks following for now




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Will the US Dollar Trigger Another 2008 Event?

The market looks like it’s topping out.

We have a clear megaphone pattern in the S&P 500. We could always stage a final blow off top, but we’re at or near the top already. The next leg down should take us to the low 1800s. If things really begin to accelerate, we could easily go below 1700:

 

There is certainly no shortage of potential catalysts for this.

1)   Mario Draghi’s “bazooka” in Europe is looking more and more like a water pistol. There may in fact be something of a mutiny going on at the ECB as more and more national central bank heads grow tired of Draghi’s secrecy and policies.

 

2)   Japan’s economy is an absolute disaster. More importantly, the Japanese Bond market is heading towards an implosion. Risk is so mispriced by the Bank of Japan’s policies (QE efforts greater than 24% of Japan’s GDP) that even a general move to market rates could blow up the whole mess.

 

3)   Based on un-massaged data, China is growing at HALF of the official rate. Given than half of all future global GDP growth is expected to come from China, this doesn’t bode well for the world.

 

4)   The US Dollar is rallying hard. We’re already at a four-year high. With the global dollar carry trade somewhere over $3 trillion, this has the potential to blow up a massive amount of investments (see the current commodity meltdown).

The financial world focuses far too much on stocks. The stock market, despite being at record highs (meaning record market capitalizations) remains one of the smallest, and least sophisticated markets on the planet.

Consider that stocks, even at current lofty levels, have a global market capitalization of slightly over $60 trillion.

In contrast, the global bond market is well over $100 trillion.

And the global currency market trades OVER $5.3 trillion per day.

It is currencies, not stocks, where the most significant moves occur. The currency markets are the largest, most liquid markets in the world. They are always first to move when things change.

And the US Dollar is moving up RAPIDLY. Will this blow up the financial system as it did in 2008? We’ll soon find out.

If you’ve yet to take action to prepare for the second round of the financial crisis, we offer a FREE investment report Financial Crisis "Round Two" Survival Guide that outlines easy, simple to follow strategies you can use to not only protect your portfolio from a market downturn, but actually produce profits.

You can pick up a FREE copy at:

http://ift.tt/1rPiWR3

Best Regards

Phoenix Capital Research

 

 

 




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Global Temperature Trend Update: October 2014 tied as the warmest October in the 36-year global satellite temperature record

TemperatureEvery month University of Alabama in Huntsville
climatologists John Christy and Roy Spencer report the latest
global temperature trends from satellite data. Below are the newest
data updated through October 2014.

Global Temperature Report: October 2014

Global climate trend since Nov. 16, 1978: +0.14 C per decade

October temperatures (preliminary)

Global composite temp.: +0.37 C (about 0.67 degrees Fahrenheit)
above 30-year average for October.

Northern Hemisphere: +0.34 C (about 0.61 degrees Fahrenheit)
above 30-year average for October.

Southern Hemisphere: +0.40 C (about 0.72 degrees Fahrenheit)
above 30-year average for October.

Tropics: +0.19 C (about 0.34 degrees Fahrenheit) above 30-year
average for October.

Global Temperature Trend October 2014

Notes on data released Nov. 4,
2014:

October 2014 tied as the warmest October in the 36-year global
satellite temperature record, according to Dr. John Christy, a
professor of atmospheric science and director of the Earth System
Science Center at The University of Alabama in Huntsville.
With a global average temperature that was 0.37 C
(about 0.67 degrees Fahrenheit) warmer than seasonal norms, October
2014 tied October 2012.

Warmest Octobers (1979-2014)
(Warmer
than seasonal norms)

1.   2014    +0.37 C
      2012    +0.37
C
3.   2005    +0.36 C
4.   2006    +0.32 C
5.   2003    +0.30 C
      2010    +0.30
C
6.   1998    +0.29 C
      2013    +0.29
C
8.   2009    +0.27 C
9.   2004    +0.25 C
10. 2007    +0.19 C

Go here
to see monthly lower troposphere temperature data since 1978.

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Saudi Stocks, Currency Tumble As Aramco Pipeline Explodes; ISIS Sabotage Concerns

It appears Saudi markets are back in play. As Bloomberg’s Richard Breslow noted this morning, Riyal forwards have jerked notably higher (implying weakness expected) and the Tadawul All Share Index has dropped 7% in the last 2 days after the killing of Shiiites by unknown parties and now news that a pipeline has exploded. As Breslow warns, if that indeed signifies the spread of Islamic State into Saudi Arabia, it would be the first time they crossed Saudi borders. That would be a big deal and a major escalation of problems over in that part of the world, far beyond what it would do to capital markets.”

Yesterday we had attacks on Shi’ites (as Reuters reported)

Saudi security forces on Tuesday shot dead a member of an armed group that killed five people in an overnight attack on Shi’ite Muslims marking an important religious anniversary, al-Arabiya television reported.

 

The late Monday assault on a Shi’ite gathering in al-Ahsa district is likely to test already strained relations between Sunnis and Shi’ites across the Middle East because it coincided with the annual Ashoura commemoration of Shi’ite Islam.

 

The Dubai-based al-Arabiya said security forces who had been hunting suspects in the al-Ahsa attack clashed with and killed “a wanted man” at a rest area in the al-Qassim province, north-west of the capital Riyadh.

… and today, what is allegedly an Aramco pipeline, just exploded near the town of Sudair, south of Riyadh.

*  *  *

The Region:

*  *  *

Has sent stocks and the currency reeling.

 

*  *  *

 

* * *

 

It would appear the Saudis might need US ‘protection’ after all.. how convenient as they continue their attacks on the US Shale industry




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