Bill Ackman needs a lesson in proper Trade Management for his miscues on managing his Herbalife Short Position. Double Bottom or Head and Shoulders Pattern on HLF Chart? There is still a substantial short interest percentage of the open float in Herbalife, and if the government gives them a relative slap on the wrist in regards to a manageable fine, then there is ample room here for additional squeezing of short positioning. Pershing Square is not so much trading against Herbalife but the general market and a substantial institution ownership of this stock on the street.
I think HLF is a dog myself, but shorting is a strategic business where even more so than normal you have to get the timing right. And Bill Ackman has a real problem with closing out a winning trade here. It is unacceptable to let this trade go against him this many times when he has had such massive gains in this short position. Remember Bill you can always get back in at a much better overall price, let the technical be your guide in regards to taking profits on the trade.
For seven years now we’ve been told the US is in a recovery. However, if this were the case, the Fed would have started raising rates years ago (likely in 2012). No other recovery on record saw the Fed maintaining ZIRP for so long.
There is simply no factually credible argument for why rates should be ZIRP if the economy is expanding. You cannot have claims of a “recovery” or expansion while ZIRP is in place. ZIRP is meant to be an emergency policy meant to pull the economy out of a severe recession, NOT a long-term program.
In pictorial form, the red line in the chart below negates the blue line. There is simply NO WAY that GDP expansion is even close to accurate if rates have to be kept at zero for six years after the recession “ended.”
Indeed, even the CPI data suggest the Fed is deceptive. Core CPI is well above the Fed’s “target” rate of 2%. Even a child could look at this chart and see the breakout occurring. The Fed claims to be “data dependent” but all of the data has hit levels at which the Fed claimed it would raise rates again!
Let’s be blunt. The folks running the Fed are not idiots. They know the expansion is nowhere has nowhere near the strength that the official data claims. That’s why they’ve maintained rates at zero for so long.
However, while the expansion is weak, inflation is increasing dramatically. Which is the dreaded stagflation the US experienced in the 1970s. It is also the issue that caused the 1937 mess: inflation rose forcing the Fed to raise during a weak economy. By the way, that mess resulted in stocks losing 50% of their value in the following two years.
Put simply, the inflation genie is out of the bottle. Core inflation is already moving higher at a time when prices of most basic goods are at 19-year lows. Any move higher in Oil and other commodities will only PUSH core inflation higher.
The Fed is cornered. Inflation is back. And Gold and Gold-related investments will be exploding higher in the coming weeks.
We just published a Special Investment Report concerning a secret back-door play on Gold that gives you access to 25 million ounces of Gold that the market is currently valuing at just $273 per ounce.
The report is titled The Gold Mountain: How to Buy Gold at $273 Per Ounce
We are giving away just 100 copies for FREE to the public.
For seven years now we’ve been told the US is in a recovery. However, if this were the case, the Fed would have started raising rates years ago (likely in 2012). No other recovery on record saw the Fed maintaining ZIRP for so long.
There is simply no factually credible argument for why rates should be ZIRP if the economy is expanding. You cannot have claims of a “recovery” or expansion while ZIRP is in place. ZIRP is meant to be an emergency policy meant to pull the economy out of a severe recession, NOT a long-term program.
In pictorial form, the red line in the chart below negates the blue line. There is simply NO WAY that GDP expansion is even close to accurate if rates have to be kept at zero for six years after the recession “ended.”
Indeed, even the CPI data suggest the Fed is deceptive. Core CPI is well above the Fed’s “target” rate of 2%. Even a child could look at this chart and see the breakout occurring. The Fed claims to be “data dependent” but all of the data has hit levels at which the Fed claimed it would raise rates again!
Let’s be blunt. The folks running the Fed are not idiots. They know the expansion is nowhere has nowhere near the strength that the official data claims. That’s why they’ve maintained rates at zero for so long.
However, while the expansion is weak, inflation is increasing dramatically. Which is the dreaded stagflation the US experienced in the 1970s. It is also the issue that caused the 1937 mess: inflation rose forcing the Fed to raise during a weak economy. By the way, that mess resulted in stocks losing 50% of their value in the following two years.
Put simply, the inflation genie is out of the bottle. Core inflation is already moving higher at a time when prices of most basic goods are at 19-year lows. Any move higher in Oil and other commodities will only PUSH core inflation higher.
The Fed is cornered. Inflation is back. And Gold and Gold-related investments will be exploding higher in the coming weeks.
We just published a Special Investment Report concerning a secret back-door play on Gold that gives you access to 25 million ounces of Gold that the market is currently valuing at just $273 per ounce.
The report is titled The Gold Mountain: How to Buy Gold at $273 Per Ounce
We are giving away just 100 copies for FREE to the public.
Every now and then, it is good to refresh knowledge of what is truly important in life. So it’s time to redux SmartKnowledgeU's post “The Greatest Speech Ever” by Charlie Chaplin. Charlie Chaplin was known as the greatest silent actor ever…
The most powerful excerpts from his speech, still very relevant today, in my opinion, are below:
"And the good earth is rich and can provide for everyone. The way of life can be free and beautiful, but we have lost the way. Greed has poisoned men’s souls, has barricaded the world with hate, has goose-stepped us into misery and bloodshed. We have developed speed, but we have shut ourselves in. Machinery that gives abundance has left us in want. Our knowledge has made us cynical. Our cleverness, hard and unkind. We think too much and feel too little. More than machinery we need humanity. More than cleverness we need kindness and gentleness. Without these qualities, life will be violent and all will be lost."
"To those who can hear me, I say – do not despair. The misery that is now upon us is but the passing of greed – the bitterness of men who fear the way of human progress. The hate of men will pass, and dictators die, and the power they took from the people will return to the people. And so long as men die, liberty will never perish."
And particularly relevant, is the following, as it applies to nearly all world leaders today and it should serve to awaken us to the knowledge that divided we will fall to the brutal immorality of today's banking/government/military complex, but united, we have the power to change our futures for the better:
"You the people have the power, the power to create machines, the power to create happiness. You the people have the power to make life free and beautiful, to make this life a wonderful adventure. Then in the name of democracy let’s use that power – let us all unite. Let us fight for a new world, a decent world that will give men a chance to work, that will give you the future and old age and security. By the promise of these things, brutes have risen to power, but they lie. They do not fulfill their promise, they never will. "
Of course, speaking out as such then (and even more so now), was frowned upon by the elites (and thus the mainstream media)… But more so, the establishment cracked down…
Chaplin decided to hold the world premiere of his film Limelight in London, since it was the setting of the film. As he left Los Angeles, Chaplin expressed a premonition that he would not be returning. At New York, he boarded the RMS Queen Elizabeth with his family on 18 September 1952. The next day, Attorney General James P. McGranery revoked Chaplin's re-entry permit and stated that he would have to submit to an interview concerning his political views and moral behaviour in order to re-enter the US. US Congressman John E. Rankin of Mississippi told the House in June 1947:
"[Chaplin] has refused to become an American citizen. His very life in Hollywood is detrimental to the moral fabric of America. [If he is deported] … his loathsome pictures can be kept from before the eyes of the American youth. He should be deported and gotten rid of at once."
What is remarkable about the above is that Chaplin’s speech about fascism in The Great Dictatornearly 75 years ago is as relevant today, if not more relevant, as it was back then.
It is for these reasons, in an Orwellian age when telling the truth is a revolutionary act, that we must spread "The Greatest Speech Ever" far and wide.
Earlier today, Canada’s Globe and Mail released the following helicopter flyover showing the extent of Fort McMurray destruction in the heart of Canada’s oilsands region, in the aftermath of the massive wildfire which continues to spread in Canada’s Alberta province and until earlier today was threatening to enter neighboring Saskatchewan province.
Additionally, courtesy of the Google Crisis Response project, the following satellite images show the impact the wildfires have had on the area, as seen before and after the inferno. The residential estates of Fort McMurray, Beacon North Hill and Lower Townsite are no longer surrounded by thick greenery, as the fires left a ring of smoking, charred woods around the communities.
Beacon Hill North Before
After
Fort McMurray International Airport Before
After
Fort McMurray Golf Club Before
After
One question that has emerged is what initially started the fire: earlier today Alberta wildfire official Chad Morrison told a news conference that the likely cause of fire was human, in which case one wonders if there was specific intent and/or an interest to push the price of oil higher as a result of key infrastructure going offline for an indefinite period of time.
Whatever caused the initial spark, however, is for now irrelevant as the fire has now left the epicenter and has spread toward the main oil-sands facilities north of Fort McMurray, knocking out an estimated 1 million barrels of production from Canada’s energy hub.
* * *
There was some good news: a cold front scheduled to pass through the area Sunday may bring light rain that would help fire fighters battle the inferno. According to Bloomberg, the blaze, which was forecast to expand to more than 2,500 square kilometers (965 square miles) in the next few days, grew slower than expected and now covers about 1,600 square kilometers, Alberta Premier Rachel Notley said at a news conference on Sunday. While the fire approached a Suncor Energy Inc. site, there was no damage as firefighters are holding the blaze southwest of the area.
A cold front may bring a “bit of rain,” but will be preceded by winds of up to 60 kilometers an hour (37 miles an hour), spreading the fire further, Travis Fairweather, a forestry spokesman, said earlier. While cooler temperatures present responders with a “great opportunity” over the next three to four days, fires deep into the forest will likely last for months, Morrison said. The blazes are being blown east and are 30 to 40 kilometers (19 to 25 miles) from the border with Saskatchewan, Morrison said. The fire that began a week ago probably had a human cause, though that remains unknown, he said.
As Reuters adds, Canadian officials on Sunday showed some optimism for the first time that they were beginning to get on top of the country’s biggest wildfire, as cooler weather and light rain stopped the blaze from growing as much as feared and winds took the flames away from oil sands boomtown Fort McMurray.
“It definitely is a positive point for us, for sure,” said Alberta fire official Chad Morrison in a news briefing, when asked if the fight to contain the flames had a reached a turning point.
“We’re obviously very happy that we’ve held the fire better than expected,” said Morrison. “This is great firefighting weather, we can really get in here and get a handle on this fire, and really get a death grip on it.”
As reported yesterday, the wildfire had been expected to double in size on Sunday, threatening the neighboring province of Saskatchewan, as it moved into its seventh day. But favorable weather helped hold it back, giving officials hope that they can soon begin assessing the damage to Fort McMurray, close to where the fire started, causing its 88,000 inhabitants to flee.
“As more and more fire has burned out around the city and the fuel around the city starts to disappear… we are starting to move into that second phase of securing the site and assessing the site,” said Alberta Premier Rachel Notley, during the same media briefing.
Officials said it was too early to put a timeline on getting people back into the town safely.
The broader wildfire, moving southeast through wooded areas away from the town, would still take a long time to “clean up,” Morrison cautioned. Officials had previously warned that the fire could burn for months. An Alberta government statement issued on Saturday night said the fire had consumed 200,000 hectares (500,000 acres) – an area the size of Mexico City – and would continue to grow.
In terms of pure monetary damages, the inferno was set to become the costliest natural disaster in Canada’s history. One analyst cited by Reuters estimated insurance losses could exceed C$9 billion ($7 billion).
Officials said on Sunday the fire had done minor damage at CNOOC unit Nexen’s Long Lake facility, in the site’s yard. It was the first reported damage to an energy industry asset since the crisis began. Morrison said the fire was southwest of a Suncor Energy Inc facility, which Suncor identified as its base oil sands mining site north of Fort McMurray, and also near an unidentified Syncrude facility.
Estimates for offline production had been raised from 600mbpd to as much as 1 million barrels offline daily. It is still unclear how long until production is fully restored to prior capacity. The wildfires that may soon cover an area the size of Luxembourg have led to combined productions cuts of about 40 percent of the region’s output of 2.5 million barrels, based on IHS Energy estimates. The cuts, and the mass exodus of more than 80,000 people from Fort McMurray, represent another blow to an economy already mired in recession from the oil price collapse.
The best news, however, is that moments ago we got the first notice that things are indeed reverting back to normal: Suncor just announced in a statement, that it is beginning plan to restart oil-sands output shut by fire, adding that regional assets have been safe from fire, co. says in statement. Suncor had shut down operations in controlled manner to ‘facilitate a quick and reliable start-up. We expect most other producers to follow suit.
On this weekend’s episode of the NPR game show Wait Wait…Don’t Tell Me!, humorist P.J. O’Rourke—usually classified as either a conservative-leaning libertarian or a libertarian-leaning conservative—announced that he’s voting for Hillary Clinton. Clinton, he declared, was “the second worst thing that could happen to this country. But she’s way behind in second place, you know? She’s wrong about absolutely everything. But she’s wrong within normal parameters!”
Of Donald Trump, he warned: “They’ve got this button, you know? It’s in a briefcase. He’s gonna find it.”
The segment is embedded below, with O’Rourke’s comments starting at the 3:17 mark:
Bonus link: ReasonTV interviewed O’Rourke back in 2014. To watch that, go here.
A little over two years ago, many of us, including myself, were expecting a bitcoin price resurgence back to the prior highs. On the other side of the fence was Vinny Lingham, a serial entrepreneur who also happened to be intimately involved in the space. His alternative view centered around an expectation that the bitcoin price would remain weak for quite some time before ultimately heading back up to new highs. I highlighted his thoughtful perspective in the post, Guest Post: Why is the Bitcoin Price So Weak?
I’ve been eagerly waiting for Vinny’s next installment, which he finally published last week under the title, Bitcoin 2016?— “There has been an awakening…”Let’s just say he’s turned pretty bullish.
So without further ado, let’s examine the words of the man who’s forecast back in 2014, proved so extraordinarily prescient.
Bitcoin 2016?— “There has been an awakening…”
This is the follow up to my previous post, which has been quoted widely in the press and research reports as one of the first articles to predict the sideways and downward move in the Bitcoin price over the past 2 years, along with identifying the “headwinds” that would keep the price in check. Now, I believe it’s time for an update, and a review of those fundamentals. At the time of writing, the Bitcoin price is hovering around $450, exactly the same price as when I penned the previous post on this topic.
After reading my first post, entitled Finding Equilibrium in March 2014, one could argue that I was a bit bearish on Bitcoin?—?believing that it would trade sideways and down, until certain fundamentals were in place. At that point, most people inside the Bitcoin community expected Bitcoin to retest its previous high of c. $1255 in 2013 and easily break $2k. In fact, when I surveyed the audience at CoinSummit in 2014, barely anyone would take the contrarian view. I did. And this was coming from the same person who correctly predicted that Bitcoin would hit $1,000+, just the year before.
To summarize my previous post, I argued the following:
Bitcoin is not a currency, but a commodity (it has since been declared as such by numerous bodies, including the CFTC).
Mainstream consumer adoption was lagging (and it still is to a large extent)
“Smart Contracts” will be a particularly important use case for Bitcoin
Merchant adoption was outpacing consumer demand
Lack of trust with exchanges and limited ability to purchase Bitcoin
Loss of momentum (Bitcoin was on the way down, not up)
Miner margins were being squeezed (forcing more coins to be sold)
How 25 months makes a difference in the world of technology! If we examine the points above, the following changes are clearly visible:
Merchant adoption has slowed (as a %) and consumers are catching up?—?mainly early adopters, but the delta between the two has virtually reversed.
Smart contracts have become the latest buzzword, along with “Blockchain” and other chains such as Ethereum. My new startup, Civic, is now using Blockchain technology to create a secure personal identity platform for consumers, for example.
Miners margins are looking a lot more more healthy, from the lows of $200 last year.
Bitcoin is on the way up, not down, creating upward price momentum.
There is a strong trust in exchanges and platforms for purchasing Bitcoin, such as Bitstamp, which recently got EU regulatory approval, Coinbase, Kraken, Circle, BitX and others.
So, purely upon the basis of my previous arguments against the price rising, I believe the headwinds that were holding back Bitcoin, will take the price up to the $1000+ mark, this year.
However, as the title to this post suggests, there has been an awakening. I’ve casually been speaking about some tailwinds for about a year now and some of these ideas have been gaining momentum, so I wanted to summarize them here into 3 categories:
1. Industrial use cases are coming to the fore
Venture capital has been pouring into Blockchain and Bitcoin startups at an unprecedented rate, now topping over $1bn. These startups, such as Chronicled & Stem (disclosure, I’m an investor in both), are building out solutions which utilize Blockchain technologies in industries, where prior solutions were either not possible or financially viable.
The banking sector is investing heavily in what they call “Blockchain”, but specifically avoiding using Bitcoin. I personally think the tide will turn on this point, as soon as one of these projects get compromised, from a security perspective. That said, many foreign banks are investigating and using the Bitcoin Blockchain for innovating around their processes. I think we have to accept that we will live in a world where there is a “chain of chains”, all interlinked in some way. Bitcoin may not rule the finance world chains but it may act as an intermediary platform for settling across chains.
2. The coming short squeeze
The most important driver of the pending price surge, IMHO, is going to be what I term as the “Mother&*!er of all short squeezes”. A short squeeze is basically what happens when people that are short (selling) an asset discover that the price has risen and they need to buy (cover) to ensure they do not make further losses.
In the Bitcoin world, this happens under a number of scenarios:
Traders/speculators who have taken a view that the Bitcoin price will go lower, would borrow coins via exchanges such as Bitfinex and sell those coins into the market, waiting for the price to drop to buy them back cheaper, repay the exchange and make a profit.
Miners who want to lock in profits. These ordinarily would be called “hedging”, because they produce enough coins per day that they are able to pay out of their future production, HOWEVER, halving day is approaching. Halving day is the day that a certain block number is reached and the rewards per block is halved (to 12.5BTC per block, from the current 25). This is expected to be in early July 2016. The problem this has for miners, is that if they are trying to lock in their profits right now by borrowing and selling coins, which they intend to repay AFTER halving day, unless they have spare coins lying around, they will be forced to buy coins on the open market if they cannot produce enough coins through their mining operations. It’s the same as selling crops in the futures market and then being hit by a storm that wipes out half of your fields. The only way, technically, that this doesn’t happen, is if the price doubles on halving day (it won’t).
Because Bitcoin trades at the margin (which means that only a percentage of the total coins issued are traded), there is less liquidity and extreme changes like a 50% drop in the rewards per block will have a more marked impact on the price than one would expect, triggering a short squeeze.
One would argue that the market has already factored this in, but it hasn’t. The reason is that the hash rate will fluctuate very rapidly over the halving day period and that is going to cause a lot of volatility for miners and traders. Also, the true deflationary rate of Bitcoin is not known, as I will now explain.
3. Real inflation vs Nominal inflation in Bitcoin
Bitcoin was created as “deflationary” currency. The total supply is 21m units and it will never be changed. There are about 15.5m coins in circulation and about 3600 new coins minted per day, so roughly 100,000/coins per month, which amounts to nominal inflation (relative to actual coins issued) of around 8%/year. This will arguably drop to 4% after halving day. Or will it?
If we assume that 4m coins will not move anytime soon, then the active circulation of BTC is closer to 12m coins (based upon coins in issue today). Assuming that we are minting 100k/coins per month, then real inflation is at 10%, not 8%. So, if halving day takes effect, then real inflation drops to around 5%/year.
Based upon research by John Ratcliff, I’d like to construct a new view of the real inflation rate of Bitcoin. For various reasons, it appears that 25% of bitcoins are not in active circulation (lost, cold storage, Satoshi, etc), even if we assume Craig Wright is Satoshi (which would mean his coins won’t move until 2020). All numbers are rounded.
In 2014, Bitcoin nominal inflation was 10.3% & real inflation was 15.1%
In 2015, Bitcoin nominal inflation was 9.3% & real inflation was 10.1%
In 2016, Bitcoin nominal inflation will be 6.4% & real inflation will be 8.7%
In 2017, Bitcoin nominal inflation will be 4% & real inflation will be 5.3%
Inflation in Bitcoin has an interestingly different application than inflation in the real world, in that prices aren’t going up because governments are printing money. Prices are going up because of scarcity (supply/demand). If you note that real “inflation” is dropping nearly 2/3 in around just 3 years, it means that for the current volume of Bitcoin buying to be satisfied, Bitcoin will need to find a new, and higher equilibrium point/clearing price. I don’t think these calculations have been adequately factored into the market price…
Bitcoin as a strategic global asset will trigger an “arms race”
Currently, the market cap of Bitcoin ($7bn) is simply too small to facilitate a large buy of Bitcoins from any governmental organization. If Bitcoin started to surge globally, and as a result of strategic interests from any one government, if other governments decided to own a piece of the limited 21m coins in issue, I believe this would trigger something akin to a digital commodity race. Imagine if China started buying up large amounts of Bitcoin?—?would the rest of the world governments stand idly by and watch? I don’t think so?—?so my prediction here is that by 2017, governments will become the largest buyers of Bitcoin, pushing the price up to new highs.
It’s always easy to make outlandish predictions. My goal for this post was to outline what I think the tailwinds are behind Bitcoin. I don’t know if the price is going to $1000 or $10,000? – ?but I do know that it is going up. If I was forced to predict, I would say that it would hit $1000+ in 2016 and $3000+ in 2017. Looking forward to seeing how this all plays out!
When Vinny speaks about Bitcoin, I listen, and so should you. Well done once again, sir.
With the Trump vs Clinton showdown set to begin and conclude precisely 6 months from today, the market is finally starting to focus on how either of the two presidential contenders will impact various asset classes. In this vein, over the weekend, Deutsche Bank’s Alan Ruskin issued a report on how FX trading will be influenced by politics, noting that the channels through which the coming election will influence the USD are complex and sometimes contradictory – which will probably mute the response to some degree. Assuming Trump and Clinton are the candidates, here are some broad FX considerations.
1. Fed policy:
Given Trump’s comments, Yellen’s term will not be extended beyond January 2018 under a Trump Presidency. In any event, Yellen may choose to leave after her term ends under a Clinton Presidency, so some change in approach is possible regardless of who wins. Given Yellen is regarded as on the dovish end of the policy spectrum, this consideration could play USD positive, but it is too soon to be a major factor.
2. Fiscal policy:
On fiscal policy, there is a significant probability of some fiscal stimulus early into the new President’s term, whoever is President, even with a divisive Congressional backdrop. The last three Presidents all pursued some form of fiscal stimulus at the start of their first term under varying circumstances. Increased infrastructure investment seems to be a common theme in the Trump and Clinton proposals, and has some cross party support. The fiscal-monetary policy mix is then apt to be more USD friendly post-election. This is much more relevant for thinking about 2017 than 2016.
Before then, assuming the race is reasonably tight, we will be worrying about trade disputes, and a US-led increase in global risk.
3. Trade:
These stresses have predictable FX consequences in some areas – the MXN is very vulnerable – but are less predictable in terms of impact for other currencies, including for EM Asia and CNY. EM Asia will be subject to negative trade concerns, but particularly for those countries that are intervening to stop appreciation they will be under more pressure to let their currencies appreciate. All countries on the US Treasury monitoring list spring to mind, with Taiwan and Korea in EM Asia in the spotlight based on C/A surpluses and intervention patterns. Presumably, under Trump, the US Treasury monitoring mechanism will be applied with a heavier hand. This on the surface should be good for the KRW and TWD. However, watch-out for an unpredictable China impact that could dominate all other factors. Pushing China to tolerate a more market determined exchange rate, will likely lead to a weaker CNY with negative implications for all of EM Asia FX.
How any Trump administration navigates this ‘contradiction’ between a country running a large bilateral surplus with the US, but market pressure for their currency to weaken, will be crucial. If Trump’s negotiations with China roil markets, the dominant macro story will quickly shift to a China led risk-off move, with very negative consequences for all commodity and EM FX, with the USD strengthening against most currencies, outside the other G4 currencies. A US led increase in global uncertainty would undercut the Fed policy tightening cycle, and act as a USD negative factor versus the likes of JPY, CHF, and EUR.
4. Key appointments:
Who Trump and Clinton lean towards as Treasury Secretary is very important. The unspoken flip side of comments that countries are manipulating their currencies weaker, is that the USD is too strong. The last time the US went down the path of using the exchange rate as a trade tool was with Treasury Secretary Lloyd Bentsen in the first couple of years of the Bill Clinton administration – a period when the US was constantly talking USD/JPY lower. Any sign that we are going down that path could put the USD under some pressure versus a few select currencies, including the yen. Trump would further close the exchange rate as one key channel through which unorthodox policy works, potentially compounding concerns about unorthodox policy efficacy, with negative risk implications.
5. Other:
However, even here pre-election USD negative implications of the trade discussion, will be partly offset by the USD positive post-election thinking on the monetary/fiscal mix, and other USD positive micro issues like a 2005 HIA equivalent repatriation of US corporate tax holdings from abroad (even if most these assets are in USD already). Considerations of a possibly more ‘business friendly’ administration could also be an important USD positive, but again as a 2017 theme.
6. Conclusions:
As the election debate heats up, this should play EMFX and commodity currency negative versus G3. To the extent that US politics is seen leading to a rise in global uncertainties, this should be mildly USD negative versus the JPY, CHF and EUR into the election, but the fiscal-monetary policy mix thereafter could encourage the resumption of the stronger USD theme in 2017. The wild-card in the longer-term 2017 calculus for G3, is the extent to which trade negotiations roil China’s markets, which would add negative pressure to EM and commodity currencies, while the EUR and JPY would likely hold their own versus the USD.
It appears the Sunday night algos are currently positive on a new Saudi Oil Minister. June WTI crude has run Friday’s highs stops and pushed up around 2.5% at the open on decent volume…
One wonders what happens when $46 or the Thursday highs are taken out…
Saudi Arabia, the United States, and their allies have developed a nasty habit of “epidemic” proportions in various military theaters, particularly around the Middle East — bombing hospitals, healthcare facilities, and, in at least one instance, an ambulance. But despite countless pleas from humanitarian organization Médicins Sans Frontières (MSF, Doctors Without Borders), that bombing continues, so the United Nations was finally forced to issue its own resolution on the matter.
Resolution 2286, co-sponsored by 80 member nations, condemns attacks on medical personnel and facilities in conflict situations and demands “an end to impunity for those responsible and respect for international law on the part of all warring parties.”
Though it might seem superficially absurd to issue a condemnation for something so patently fundamental, evidence of its necessity remains unfortunately prevalent in headlines.
One egregious example came at the end of April in the conclusion of an investigation into the targeted bombing of an MSF hospital facility in Kunduz, Afghanistan, on October 3 of last year. Though 16 U.S. service members were found responsible for the attack, accountability in the form of punishment lacked the severity warranted for the deaths of 42 medical staff, patients, and civilians.
“The 16 found at fault include a two-star general, the crew of an Air Force AC-130 attack aircraft, and Army special forces personnel, according to U.S. officials who spoke on condition of anonymity to discuss the internal investigations”with the Los Angeles Times. “One officer was suspended from command and forced out of Afghanistan. The other 15 were given lesser punishments: Six were sent to counseling, seven were issued letters of reprimand, and two were ordered to retraining courses.”
It would be difficult, when taken with the magnitude of what actually took place in the Kunduz hospital attack, to classify such a punishment as even slaps on the wrists of those responsible.
“Many staff describe people being shot, most likely from the [AC-130] plane, as people tried to flee the main hospital building that was being hit with each airstrike,” MSF said in a statement following the bombing. “Some accounts mention shooting that appeared to follow the movement of people on the run.”
Though the official explanation from U.S. officials inexplicably characterizes the bombing as an ostensibly horrible mistake, details of the harrowing 90-minute siege stretch the veracity of such a claim beyond the limits of feasibility. Médicins Sans Frontières has in place numerous safety precautions to protect both staff and patients — particularly since the organization treats any injured parties, regardless of affiliation, in conflict areas — including a staunch prohibition on weapons in their facilities.
“A series of multiple, precise and sustained airstrikes targeted the main hospital building, leaving the rest of the buildings in the MSF compound comparatively untouched. This specific building of the hospital correlates exactly with the GPS coordinates provided to the parties of the conflict (GPS coordinates were taken directly in front of the main hospital building that was hit with the airstrikes).”
Absolving itself of responsibility for what has been widely deemed a war crime, the Pentagon’s official explanation significantly downplays the attack as “a combination of human errors, compounded by process and equipment failures,” and that “fatigue and high operational tempo also contributed” to what it calls the “fog of war.”
In actuality, no excuse exists for a targeted attack on a civilian structure which dually functions as a safe haven for those injured in an already relentless, violent military campaign — itself with questionable motives and practices. No whitewash strong enough exists to paint over an inexcusably egregious so-called error.
But the worst facet of the Pentagon’s self-declared impunity is that Kunduz isn’t the only healthcare facility bombed by the U.S. and its allies — and Afghanistan isn’t the sole location such an attack has been carried out. Not by far.
Between March and November 2015, the U.S.-backed coalition managed to bomb nearly 100 hospitals in war-ravaged Yemen — though with the media’s attention trained on the imbroglio raging in Syria, that report caused little more than a ripple. Echoing innumerable unanswered pleas by MSF, the International Committee of the Red Cross (ICRC) assertedthe targeting of health facilities “represent a flagrant violation of international humanitarian law.”
“The neutrality of health care facilities and staff is not being respected,” contended deputy head of the ICRC delegation in Yemen, Kedir Awol Omar. “Health facilities are deliberately attacked and surgical and medical supplies are also being blocked from reaching hospitals in areas under siege.”
Apparently and typically, repeated calls to end targeted violence fell on deaf ears.
At the end of April, Al Quds Hospital in Aleppo fell under attack, killing 27 people — including three children and one of the decimated city’s last qualified pediatricians — and eliciting one of the most gut-wrenching open letters to date, courtesy of the director of the Aleppo Children’s Hospital.
“Like so many others,”wrote Dr. Hatem, “Dr. [Mohammad Waseem] Maaz was killed for saving lives. Today we remember Dr. Maaz’s humanity and his bravery. Please share his story so others may know what medics in Aleppo and across Syria are facing.
“The situation today is critical — Aleppo may soon come under siege. We need the world to be watching.”
Addressing the United Nations in utter frustration on Tuesday, MSF head, Joanne Liu, beseeched the members responsible to “Stop these attacks! You … must live up to your extraordinary responsibilities and set an example for all states.”
Though her sentiment may be broadly shared, the Pentagon’s less than lackluster response to the U.S. military members complicit in the Kunduz bombing make the likelihood of her demands being met exceedingly unlikely anytime soon.