Bernie Sanders Has Forced Hillary Clinton to Compete and Her Supporters Have Had Enough of It

Sen. Bernie Sanders, the nominal Democrat whose two-and-a-half decade career asTo the bitter end. a registered Independent in Congress has essentially been a form of leftist protest of the Democratic Party, has declared his presidential candidacy will go all the way to the Democratic National Convention in July.

Politico reports Sanders told an audience at the National Press Club that Clinton “will need superdelegates to take her over the top at the convention in Philadelphia. In other words, it will be a contested convention.” An NBC News/Wall Street Journal/Marist poll has the two candidates polling within the margin of error in Indiana, but because all Democratic primaries award delegates proportionally, Sanders needs to win over 60 percent of each primary the rest of the way to have any shot of matching Clinton’s delegate totals.

He knows he’s got little chance of overtaking former Secretary of State Hillary Clinton before the final primary in Washington DC on June 14, but Sanders continues to raise money ($26 million last month, according to CNN) for his insurgent campaign which even many hardcore Clinton supporters begrudgingly appreciate, to a point, for pushing Clinton “to the left” on economics. 

Those same Clinton supporters, however, also think Sanders has had his moment and that it’s time for the democratic socialist from Vermont to stop “attacking” his only rival for the nomination or drop out entirely. Some Clinton supporters claim the party needs “unity” now, lest the presumptive nominee suffers any more public criticism that doesn’t come from the mouth of Donald Trump. 

The Clinton camp continues to tout how much leg-work it did to support then-Sen. Barack Obama in 2008 once he was the nominee, but there seems to be a collective case of amnesia on how viciously Clinton’s campaign fought Obama’s down to the very last primary in 2008. In an article last week, Politico recalls Hillary Clinton saying as late as May of that knock-down, drag-out primary process that “Obama’s support among working, hard-working Americans, white Americans, is weakening,” and the article also notes that Bill Clinton reportedly used his presidential gravitas to try to convince superdelegates that “the country wasn’t ready to elect an African-American President.”

This isn’t exactly the stuff that party unity is made of. The fact is, when it became clear that the delegate math was not in her favor, Clinton’s once-formidible support among superdelegates dwindled, and she and her surrogates did everything they could to undermine Obama as an inexperienced outsider who would lose the general election.

Of course, not only did Obama handily defeat Sen. John McCain (R-Az.) in the general, he flipped some traditionally red states into the blue column, indicating the sustained attacks by the Clinton camp didn’t seem to leave a scratch on him. 

Clinton was supremely confident she would be the nominee in 2008 and the Obama juggernaut was something she never saw coming. This time around, with Clinton’s only serious competition coming from an elderly, charisma-free senator with a long but undistinguished career in Congress, the burden of having to actually compete for her own party’s nomination is clearly infuriating to the Clinton camp. 

Supporters of Clinton will note that the race was tighter between Obama and Clinton than it is with Clinton and Sanders, which is true. But what is also true is that Obama and Clinton shared much more in common in both policy and political philosophy than Clinton and Sanders do. This is truly a competition of ideas, rather than personalities. 

Though he changed his long-time affiliation from Independent to Democrat last November, Sanders’ has demonstrated little concern with party unity. Indeed, his candidacy has promised “revolution.”

Sanders has no interest in preserving Clinton’s Democratic Leadership Council-style centrism, he wants to reshape the Democratic Party into one that’s outwardly hostile to the free market and substantially increases the welfare state, but also abandons the drug war once and for all (including the legalization of marijuana) and turns its back on the relentless appetite for military intervention (or as Clinton would call it, “smart power“).

If Sanders’ end game is to influence Democratic Party policy, he has little incentive to drop out now, even if Paul Krugman thinks “he’s in the process of blowing his own chance for a positive legacy.” Bowing out now surely earns Sanders a plum time slot at the Democratic National Convention, but given how many votes he’s already earned — to say nothing of the enthusiasm of his supporters — he could demand that regardless. 

But Sanders statement at the National Press Club this past weekend that he’s “entitled to superdelegates” (specifically an amount of superdelegates that’s proportional to the voting percentages he’s won) indicates he wants to have it both ways. For all the influence his campaign may have affected on Clinton’s, it’s far too late to try to change the rules of a major party which he defiantly refused to identify himself with until he decided to run for president.

Superdelegates are a fact of Democratic Party life and specifically designed to keep insurgent candidacies at bay. For almost as long as Sanders has been a leftist thorn-in-the-side of the Democratic Party, Clinton has been a first lady, senator, secretary of state and power broker. She has cultivated the support of the party elites who are this year’s superdelegates. If Sanders has designs on reforming that system, he’ll have to save that intra-party revolution for another time. 

In the meantime, Clinton supporters shouldn’t fear competing in the marketplace of ideas. Donald Trump will still be Donald Trump when the primaries are over.

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Is Target Stock Going “in Toilet” Due To Conservative Boycott Over Bathroom Policy?

After the Minneapolis-based Target announced that it would allow customers and workers “to use bathrooms appropriate for the sex that matches their appearance, not necessarily their birth sex,” social conservatives announced an online petition and boycott of the low-end-but-still-trendier-than-Walmart retailer.

The Target Boycott Pledge is spearheaded by the American Family Association, which claims that over 1 million folks have signed up to steer clear of Target stores until the company reverses its policy and…starts inspecting customer genitalia or something. “Target’s policy is exactly how sexual predators get access to their victims,” harrumphs the AFA (emphasis in original). “And with Target publicly boasting that men can enter women’s bathrooms, where do you think predators are going to go?”

In the wake of the boycott, conservatives are crowing that they are righteously destroying Target’s stock price since the company welcomed fat, sweaty, hairy men to just sort of hang out in store bathrooms all day. The basis for this is that Target’s stock price dipped from $84.14 a share about a week-and-a-half ago to $79.27 last Friday.

TARGET STOCK IN TOILET: Boycott Passes 1 Million As Corporate Losses Pass $2.5 BILLION!,” reads a typical headline of the genre. “Corporate America,” warns a writer at RedState, “Learn from Target’s mistakes. Just because the self-righteous celebrities and self-indulgent rich people like Donald Trump that you hang around with make you feel socially pressured to cater to leftist ideas doesn’t mean you should. They may seem loud, but the rest of America can be a lot louder when we want to be. About 2.5 billion times as loud.”

Well, maybe. But then there’s this: The stock closed yesterday at $80.12 a share, so maybe people really don’t give a shit (har har!) about bathroom stuff. Indeed, here’s a two-year trend line of the stock’s price, just to give a larger context to what every dummy investor knows. Which is that prices go up and down a lot and only a fool mistakes short-term fluctuations for the true value of much of anything, but especially a stock in the retail industry.

More bad news for the potty warriors: According to the MarketWatch site, analysts are totally bullish on Target.

And why shouldn’t they be? Contra the AFA’s scaremongering, it turns out that the class of perverts who frequent discount retailers are not being drawn to the restrooms now that they are “free” to do so. No, they’re sticking to the traditional scenes of voyeurism, such as the swimsuit aisle. To wit, this recent news report:

A Florida woman approached by a man holding a basket full of razors in the bikini section of a Target store caught him on camera, she said.

Candice Spivey recognized Jeffrey Polizzi, 31, last week at the Jacksonville-area Target as the same creep who asked her indecent questions at a grocery store two years ago, according to the Nassau County Sheriff’s Office.

Polizzi, who was convicted of video voyeurism in 2009, could be seen on Spivey’s cell phone video telling her, “You want to make sure it’s not too sheer or clear.”

Polizzi reacted in horror when she asked him if he remembered the earlier encounter. He dropped the basket, ran out of the store and sprinted out of the parking lot as Spivey yelled, “Get this guy! Stop him! Stop this guy! Call the cops!”

And yet despite this clear and oddly comforting example of a perv acting just like they always have, the usually razor-sharp Stephen Green of Vodkapundit, still finds a reason to loop this incident back to Target’s laissez-faire bathroom policy, writing, “Under Target’s new policy, this creep could have been hanging out in the ladies female-ish gendered room, no problem.”

But—and this is a bigger but about which even Sir Mix-A-Lot himself could ever dare to dream—the creep wasn’t in the bathoom.

Let’s check back in on how that Target boycott is doing in a few weeks or month. And how the company’s stock is faring, too.

Bonus link: Target is pushing Mother’s Day gifts pretty big, so Heather, why don’t you get all your shopping for both mommies done there?

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U.S. Gasoline Prices Hit 6 Month High, Keep Rising

Submitted by Charles Kennedy via OilPrice.com,

The average price of gas in the United States is now at $2.22, up 8 cents over last week, hitting a 6-month high. This, in stark contrast to February’s ultra-low gas prices of $1.68 per gallon – a level that had not been since the end of 2008.

Then, the price drop lasted only five months from December 2008 to May 2009 when it rose to $2.24 per gallon.

This time around, prices dipped to $1.95 in December 2015, rising to $2.03 in April, then to today’s $2.22. The national average has remained above $2 per gallon for 40 consecutive days.

 

Experts are predicting that our gas-price vacation is all but over, and that today’s higher prices—or even higher—will be our new norm once again.

According to GasBuddy analyst Patrick DeHaan, “Gasoline prices may continue inching up until Memorial Day–a major test if refiners are well-prepared for the summer driving season.”

Although the price increase comes as a shock, in the overall scheme of things gas prices are still fairly tolerable, and far better than the $3.00+ per gallon seen in 2011 and continuing well into 2014.

U.S. drivers should be prepared for price hikes in the coming weeks, particularly leading up to Memorial Day.

The really savvy price shoppers who want to hedge their bets could pre-purchase gasoline from websites such as mygallons.com, moregallons.com, firstfuelbank.com, and others.

And just when you start to get bitter about the rising prices, just remember that in May of 2015, the average price of gasoline was $2.58, and in May 2014, it was $3.60.

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California Moves to End Mandatory Jail Time for Prostitution

Good news on the prostitution-decriminalization front is pretty hard to come by these days, especially in states like California, Texas, and Washington where stopping “human trafficking” has turned into a full-blown war on consenting adults selling and paying for sex. But wonder of wonders, the California legislature is actually considering a measure that would reduce the criminal penalties for sex workers, including repealing the current mandatory minimum jail sentences for repeat prostitution offenders.

Under current California law, anyone convicted of a second prostitution offense must serve at least 45 days in jail, with subsequent convictions mandating at least 90 days jail time. Offenders may also have their driver’s licenses suspended for up to six months.

The California Senate has already approved a measure to abolish these mandatory minimum penalties and the licence suspension provision, with Democrats largely in favor and Republicans largely opposed. The bill is now headed to the state Assembly.

But—of course there’s a but, right?—the bill isn’t all sunshine and lollipops from a feminist, libertarian, or sex-worker rights perspective. The reason its sponsor, Sen. Bill Monning (D-Carmel), gives for favoring reduced penalties isn’t because he believes adults should have the right to enter into consensual sexual relationships without state interference. Rather, it’s predicated on a belief that women lack sexual and moral agency.

Mandatory minimum jail sentences for prostitution is a “flawed policy,” he said, because the women selling sex are “victims of human trafficking.” He’s not hoping for less arrests and prosecution of sex workers, he just wants those convicted to be sent to “diversion” programs. Right now, with the mandatory minimums, judges are forced to sentence repeat prostitution offenders to jail; now they can give them the option of attending bullshit propaganda programs and only send them to jail if they decline the “help.”

The bulk of the prostitution diversion programs that I’ve read about (and I think that’s most of them) are run by religious groups, offering a hefty dose of moral condemnation along with their alleged aid. Or they’re focused on things like yoga and meditation and teaching women why they’re better than selling sex. Unfortunately, these programs tend to provide women with little in the way of job training, job placement assistance, or any other practical components. They require an intensive time commitment (usually at least several hours a day, every day, for a few weeks), which makes sticking to the programs difficult for those who have children or are trying to work a “real” job. The rate of completion of these programs is low, and those who drop out risk being thrown in jail anyway.

But who cares if it actually helps, right? For politicians, it’s attaching one’s name to a bill that counts. Right now, California lawmakers have introduced so many human-trafficking bills that they’ve become redundant, with a slew of overlapping bills covering the same legal territory. There are currently some 25 to 30 bills related to human trafficking in the Assembly alone, according to Assemblywoman Toni Atkins (D-San Diego).

You might think legislators would simply be happy to have the issue addressed, and some sponsors of the overlapping measures would drop theirs and band together on one bill. But that, of course, would preclude each sponsor from getting the credit for Doing! Something! about a high-profile, good-PR issue.

“Invariably, there’s not coordination,” California Assemblywoman Lorena Gonzalez (D-San Diego) told the Voice of San Diego. “Everybody wants to do something.”

Because none of these shameless grandstanding hypocrites dedicated lawmakers will actually withdraw their bills and risk losing the do-gooder credit, the bills are currently being held and sorted out by the Assembly’s appropriations committee.

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ECB blames you for negative interest rates

Just after sunrise on April 19, 1775, a large contingent of British military troops arrived to the town of Lexington, Massachusetts.

They were under orders to search for and confiscate all weapons and munitions from the colonials– something the British army had done countless times before.

In many ways it was a routine operation. And yet, that morning, roughly 80 local militiamen stood blocking their path.

Paul Revere had ridden through Lexington only hours before to warn residents of the approaching threat.

There was a lot of yelling and tension between the two sides, and amid all the confusion, someone fired his musket. Then another. Then another.

(Historians are still unclear which side shot first, though much of the evidence points to Han Solo.)

And though few people realized it at the time, those turned out to be the opening shots of the American Revolution.

This is how revolutions often start– people who have reached their breaking points engage in a small acts of defiance that quickly escalate out of control.

We’ve seen this pattern over and over again.

The Arab Spring uprising in 2011 started with a Tunisian fruit cart merchant who lit himself on fire. Revolution ensued.

The 2014 revolution in Ukraine started when police violently clashed with peaceful anti-government demonstrators.

Revolutions, of course, can take many forms. There are social revolutions, political revolutions… and even financial revolutions.

That’s what we’re seeing today: financial revolution.

Now that interest rates are negative in many parts of the world, the financial system has become an incredibly destructive force.

Negative rates adversely impact the livelihoods of just about everyone, from the average guy on the street all the way to the banks themselves.

A few key players have reached their breaking points and are starting to engage in acts of defiance.

I told you recently how the Bavarian Banking Association in Germany advised its member banks to hold physical cash instead of reserve deposits with the European Central Bank (ECB) at negative interest.

Some major insurance funds are also jumping on board, choosing to hold physical cash instead of bank deposits earning negative interest.

In its effort to avoid negative interest rates, the Canton of Zug in Switzerland asked its citizens to delay paying their taxes.

Now even the political and media establishments in Germany are rebelling against the ECB, saying that negative interest rates chip away at the savings of pensioners.

In response, the ECB opted for the ‘blame the victim’ approach, pointing the finger at all of us little people because we’ve been saving too much money.

So according to the unelected bureaucrats who printed all the money to begin with, people have been saving too much.

Consequently, everyone must be punished with negative interest rates. And you’re your fault.

That’s like a rapist saying, “she deserved it.” It was an appalling response, and astonishingly stupid.

You’re supposed to save money. That’s what the Universal Law of Prosperity is based on: produce more than you consume. Save more than you spend.

Penalizing savers is the exact opposite of what bureaucrats should be doing.

But people are starting to figure this out. The resentment is growing, even within the financial system itself.

Remember that modern ‘money’ is backed by nothing but unelected bureaucrats and their insipid economic theories.

The only way this system works is when there’s unquestionable confidence in the people running it, almost to the point of blind obedience and wilful ignorance.

When that confidence wanes, the financial system can spiral out of control very quickly.

We may be reaching that point soon and could look back on this period as the opening shots of the Financial Revolution.

If you recognize that the financial system is destructive and want to make a change, your most powerful option is to stop using it.

Or at least reduce your dependence on it.

Part of being a Sovereign Man is having a strong sense of freedom and independence… and that includes financial independence.

Last week we talked about the importance of holding physical cash.

You won’t be worse off for taking some savings out of the banking system.

And you’ll be protected against problems like negative interest, bank bail-ins, or withdrawal controls.

(All of these, by the way, already exist or have happened recently.)

But cash is not a panacea. Because if there really is a major reset in the financial system, your paper money might lose significant purchasing power.

That’s why it makes sense to hold gold and silver in addition to cash.

If there are greater problems in the monetary system, your precious metals will turn out to be an extraordinary insurance policy.

(Silver is a better bargain right now based on historical ratios, but it’s hard to imagine you can go wrong with either one.)

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Meanwhile, Traders Are Getting Angrier With Every Passing Day

Over the past few weeks, one recurring theme has been that experienced traders and analysts have simply given up trying to figure out the market, and no longer have an idea how to trade what for the past 7 years has been a centrally-planned policy vehicle. As a result they are getting exasperated, confused, desperate and simply angry. First it was Richard Breslow; then it was Albert Edwards who was clearly disgusted when he uttered the following appeal:

I’m not really sure how much more of this I can take. So here we are 5, 6 or is it now 7 years into this economic recovery and it still remains pathetically weak. And so it should in the wake of one of the biggest private sector credit bubbles in history. The de-leveraging hangover was always going to be massive and so it is. Quick-fix monetary QE nonsense has made virtually no difference to the economic recoveries other than to inflate asset prices, make the rich richer, inequality worse and make Joe and Joanna Sixpack want to scream in rage. They are doing so by rejecting the establishment political parties and candidates at almost every electoral turn and seeking out more extreme alternatives at both ends of the political spectrum. And who can blame them apart from the chattering classes?

 

I have not one scintilla of doubt that these central bankers will destroy the enfeebled world economy with their clumsy interventions and that political chaos will be the ugly result. The only people who will benefit are not investors, but anarchists who will embrace with delight the resulting chaos these policies will bring!

Today, we get more of the same, when first Richard Breslow once again rages at a “market” dominated by central bankers, followed by Eric Peters, CIO of One River Management.

Here, first, is Breslow with “Market Can’t Assume Away the Coming Volatility

Central bank reaction functions don’t break. They’re just frequently and miserably misunderstood. Say what you will, strict rule-based decision making can’t work. Analysts discuss ad nauseam what policy makers are getting wrong and then are shocked that decisions don’t fit their narrative.

 

There is idea paralysis, intractable conflicting imperatives and cost-benefit analysis, both domestic and international, that flies way over the head of some economic number.

 

The unwillingness or in fact, inability, of those setting monetary policy to always “feed the beast” on cue, is merely a sign that QE has led to dangerous addiction. “Unconventional easing is above all an expectations game, where it is necessary to shock markets,” Goldman Sachs wrote yesterday. If that’s all, it won’t fix the real economy, only buy time while waiting for enlightened fiscal policy. But we knew that.

 

Also destroyed is investors’ concern and sense of responsibility about evaluating significant geopolitical risks. It’s become market conceit to assume that QE will always provide.

 

Much ink is rightly spilled on the investing implications of the U.K. referendum and the U.S. election. Before they’re assumed away. The South China Sea, Middle-East and Latin America are treated as having no broader market ramifications. They’re hard subjects and destroy the buy- risk-indiscriminately story line.

 

China can’t be both savior of Western capitalism and a threat to the accepted world order at the same time.

 

The European Monetary System was a pain but, at the extremes, worked as a policy brake on craziness. Now we look at Spanish bonds and equities and conclude perpetual 20% unemployment coincides with an economic miracle. The lost generation really is on its own.

 

We’re condemned to serial bouts of severe volatility having been trained to dismiss real and knowable risks as just improbable black swans.

And next, here Eric Peters of One River:

“Things got so nasty in Jan/Feb that it’s hard to even remember the anxiety,” said Roadrunner, the market’s top volatility trader. “S&P 500 at 1820, the VIX at 28; the pendulum had swung too far,” continued the elusive bird, glancing left, right, up. The VIX recently touched 12.6, a 9mth low. “Thurs and Fri showed the first signs of life in volatility since late-Feb.” The pendulum’s swinging back. “The VIX at 18-20 makes much more sense given all that’s happening in the world. And I’m eyeing gold; there’s options activity for the first time in ages.”

 

The Icahn comments about an approaching day of reckoning in stocks was interesting,” continued Roadrunner. “But guys like him always want that. No matter how much stock they already own, they have money to buy more in a panic. That’s how they win big,” he continued. “And Thursday’s BOJ meeting was interesting. But despite the market’s disappointment, it feels like the right thing. Healthy. Central banks can’t keep giving markets everything they want, or the volatility in the end will be catastrophic.” And off he sped.

Perhaps the lament increasingly more hedge funds – and their investors – have about underperforming the market, and the “2 and 20 model now being off the table” has little to do with the inherent talent of traders, and everything to do with the mockery that central banks have of the market’s so called discounting mechanism which has now been relegated to the scrap heap and all that matters is frontrunning these very central bankers, who unfortunately are now as clueless about what happens next as everyone else…

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Treasury Yields Tumble Most In 3 Months Despite Fed’s Williams Warning

Having pushed higher yesterday, it appears ‘investors’ have had a sudden change of heart and are panic-buying bonds today, despite Fed’s Williams warning that:

  • WILLIAMS SAYS U.S. TREASURIES ARE PRICED EXTRAORDINARILY HIGH.

Treasury yields are down 5bps (2Y) to 9bps (10Y) with non-stop buying since Europe opened.

 

30Y yield’s 7.5bps drop is the biggest since Feb 18th, pushing the yield back to its 20-day moving average.

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The game has changed. Time to learn the new rules.

[Editor’s note: This letter was penned by Tim Price, London-based wealth manager and author of Price Value International.]

In their efforts to jam the square peg of financial theory into the round hole of human nature, economists have perpetrated some pretty stupid things.

But few of them are dumber than the efficient market hypothesis (EMH).

EMH states that it is impossible to beat the market because the efficiency of the market means that prices always incorporate and reflect all relevant information.

Why was the Dow Jones Industrial Average worth 22.6% less on Tuesday October 20, 1987 than it had been the previous day ?

Why is Warren Buffett worth $67 billion ?

Must be all that efficiency.

Buffett himself claims, “I’d be a bum on the street with a tin cup if the markets were always efficient.”

EMH and its bastard cousin CAPM (the Capital Asset Pricing Model), continue to send students of finance down intellectual blind alleys.

CAPM is a model that describes the relationship between the risk and expected return of an asset in a diversified portfolio.

CAPM requires reality to be bent using what can politely be termed “assumptions”, including the assumptions that:

1)  All investors are of the species homo economicus, i.e. they are seeking to maximise returns

2)  All investors are rational and risk-averse, instead of the emotional creatures we really are.

3)  All investors are well diversified across a broad range of investments

4) All investors have an equal and non-influential relationship with prices

5) All investors can lend and borrow without limit at a risk-free rate

6) Transaction costs and taxes do not exist

7) All assets are liquid and perfectly divisible

8) All investors have identical expectations

9) All investors have access to infinite information simultaneously.

These assumptions are, of course, nonsense. And yet EMH and CAPM continue to be taught.

Perhaps there are business schools out there that still advise their students that the Earth is flat.

CAPM’s silliest assumption is that all investors are the same.

It requires only a superficial acquaintance with the financial markets to know that this can hardly be the case.

The financial markets are where sovereign wealth funds interact with private investors.

The former can often be insensitive to price; the latter, never.

Within the financial markets pension funds, with a theoretical investment horizon of decades, rub up against computer algorithms looking to front-run other investors by fractions of milliseconds.

And clearly, different investment entities have different objectives.

The motivation of a central banker is likely to be distinct from that of a robot (assuming they are not one and the same).

Of course, these motivations can and do change.

There was once a time when central bankers fought inflation like the very devil. Now central bankers are desperate to create it.

When the game changes, we have a choice. Try to adapt, or stop playing.

It’s not just that we’re entering uncharted waters; in a world of negative interest rates and negative bond yields, the entire investment landscape has changed. Investment strategy must reflect that.

Although a “risk-free” rate no longer exists, we should probably still try and steer close to the shore, even if we may not be able to see it.

If the game has changed, learn the new rules.

With the financial weather now a function of economic policy, different laws apply. Old investment models are obsolete.

And within a policy-controlled market, genuine diversification – of risks, as well as anticipated returns – will matter more than adherence to a traditional asset allocation template that is no longer fit for purpose, because it was formulated in a positive carry world.

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WTI Crude Tumbles To $43 Handle As Demand Fears Grow

Remember when the low oil price was an “over-supply” issue and nothing at all to do with the other side of the same coin – dwindling demand? Well it appears that reality is dawning that a record glut combined with tumbling global growth (confirmed by weakness in China PMI, US PMI, and now EU growth expectations) is sending crude prices lower, back to a $43 handle for the June contract…

 

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