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The death of Supreme Court Justice Antonin Scalia yesterday has taken a turn for the conspiracy-theorist following comments from the Houston businessman who discovered the judge's body.

This is the news as it was delivered to the general public yesterday:

A federal official who asked not to be named said there was no evidence of foul play and it appeared that Scalia died of natural causes.

 

According to CNN, Scalia died in his sleep. A government official said Scalia went to bed Friday night and told friends he wasn't feeling well. Saturday morning, he didn't get up for breakfast. And the group he was with for a hunting trip left without him.

 

Someone at the ranch went in to check on him and found him unresponsive.

So – a sad death with the elderly judge passing quietly in his sleep – completely reasonable.

Except, as MySanAntonio reports, the "someone" was John Poindexter – owner of the 30,000-acre luxury ranch who is reported to have said the following…

"We discovered the judge in bed, a pillow over his head. His bed clothes were unwrinkled," said Poindexter.

 

"He was lying very restfully. It looked like he had not quite awakened from a nap," he said.

 

Scalia,79, did not have a pulse and his body was cold, and after consulting with a doctor at a hospital in Alpine, Poindexter concluded resuscitation would have been futile, He then contacted federal authorities, at first encountering a series of answering services because he was calling on a weekend.

While it is of course a "natural" thing to die if someone is suffocating you with a pillow, we sense that is not the norm for "natural causes."

Adding further to the questions surrounding the death, there will be no autopsy performed on Supreme Court Justice Antonin Scalia, a source familiar with the case confirmed to CNN.

The decision for no autopsy was made both by the family and the Texas Justice of the Peace, the source said.

Scalia’s death marks only the second time in sixty years a justice has died before retiring from the Court, and leaves the Court split 4-4 between fairly conservative and fairly liberal, during a heated presidential election year.

via Zero Hedge http://ift.tt/1KS67kx Tyler Durden

Submitted by Alicia Chavy via Global Risk Insights,

The Olympic Games are scheduled to begin on August 5. But will Rio de Janeiro be prepared amidst an economic recession, a looming public health crisis, delayed infrastructure developments, increasing crime rates, and numerous other problems that have rapidly developed over the past three years?

Zika: a looming threat to tourism and health standards in Brazil

The Zika virus made its way into the spotlight lately with a sudden and explosive growth of micro-encephalitis in newborns across Latin America. As a result of Brazil’s climate, inadequate public health system, and poor system for sanitation and water supplies, the virus found an ideal location to develop rapidly. While Zika has a devastating effect on pregnant women, especially in the low-income population, this issue has also brought to light other prevalent concerns regarding the Olympics this summer.

Zika looms over the Brazilian population and future tourists traveling from the around the world to watch the Olympic Games. The government’s response has been slow and inadequate; the Brazilian healthcare system has been heavily underfunded in recent years, with many poor areas in Rio de Janeiro lacking even basic infrastructure. In January 2016, hospitals ran out of money to pay for drugs, equipment, and salaries. Some patients died after they were not allowed into underfunded public hospitals.

Brazilian officials expressed concerns over the possibility of visitors staying away from Rio de Janeiro out of fear of contracting Zika. The city has taken precautions to ensure that tourists and athletes of the Olympics do not feel threatened, and officials have announced that venues would be inspected on a daily basis four months in advance, aimed at eliminating any stagnant water that could serve as breeding grounds for mosquitoes.

These efforts have not been able to eliminate global concerns over the issue. With the World Health Organization declaring it a global health emergency, Brazil has already been criticized for downplaying the risks of contracting the virus at the Olympics and the ongoing Carnival celebrations, which attract 1.5 million tourists a year.

Bribery and political corruption: the Brazilian way of business

Recently, allegations of bribery against the Brazilian speaker of the lower house, Eduardo Cunha, and five construction companies involved in Olympics projects have emerged. Brazil’s attorney general, Rodrigo Janot, claimed that some construction companies, already under investigation for their ties to the Petrobras scandal, paid bribes totaling USD 475,000 to Eduardo Cunha to help secure contracts for the building of venues and other works for Olympics.

These allegations are another example of the large impact the Petrobras scandal has had on Brazilian politics and the economy. Companies involved in Olympics construction projects found themselves blocked from receiving bank loans and credit lines during the ongoing Petrobras investigation, forcing Rio de Janeiro’s city government to act as a bank and lend companies money to prevent an inevitable slowdown in construction. Despite their efforts, projects for the Olympics have already been delayed and sometimes halted, including essential repairs on sewers in Rio de Janeiro.

However, Olympic officials have denied any delays and vow that the games will be free of corruption, serving as an example of how business in Brazil can be done “above the board”.

Social unrest and security issues

On November 16, three days after the Paris attack, a leading French recruit for ISIS tweeted “Brazil, you are next”. Attacks by Islamist gunmen in Egypt, Mali, Paris and elsewhere in 2015 has raised the alarm for big international events like the Olympics. Brazilian security agencies have trained over 85,000 security personnel, 47,000 police officers, and 38,000 soldiers to guard the 10,500 athletes and thousands of tourists attending the 2016 Games.

However, the security forces will need to focus on more than terrorist threats for the Olympics.  Violent political demonstrations, increased levels of robberies and shootings, and a growing amount of areas that are considered dangerous have worsened the already poor security situation in the city.

A looming recession

Amid a deteriorating fiscal situation, the once proud member of the BRICS has gotten used to its degrading economic status. Olympics organizers have tried to cut at least USD 500 million from the USD 1.9 billion operating budget for the Games, and already laid off temporary workers. Despite their efforts, the cost recently increased with an additional USD 100 million for electricity generation, with the final budget totalling USD 9.8 billion.

Brazil might be heading towards one of the deepest recessions since 1931. The currency plunged 33% in 2015, state security forces face a budget cut of 25%, inflation has risen to at least 10%, and unemployment has been hovering around 9%.

Brazil has also faced challenges in improving its public transportation system, particularly in the critical subway extension project. If it cannot be completed on time, Rio de Janeiro will face huge traffic jams along its mountainous coastal roads and potential empty seats in the new Olympic venues. Additionally, critical levels of water pollution and delayed infrastructure project led city officials to admit that they failed to improve sewage system in lake areas and the Copacabana coastline by 80%, a promise that was made in their Olympics bid in 2009.

Even if Brazil is able to host the Olympics with all venues prepared on time, there will be bumps in the road. The combined challenges make it very difficult to believe in a positive Olympic experience for Brazil. The legacy has the potential to do serious economic and social damage, requiring a brutal prioritization and fiscal austerity from the government afterwards. 

Rio de Janeiro city officials’ promise of showing how business can be done in Brazil “above board” is becoming more of an illusion than a reality.

via Zero Hedge http://ift.tt/1PXjd0g Tyler Durden

We are sure this is nothing to be worried about – and is likely just "transitory" – but just in case, here is some more recession-fiction to peddle…

 

Yet another weekly cut in forward earnings estimates for US equities…

Source: @Not_Jim_Cramer

But it can't be a recession, right? Think of all those bartender and waitress jobs we are "saving or creating"…

Source: @Not_Jim_Cramer

With G10 macro-economic data suffering the worst start to a year in at least a decade, we are sure it's nothing… just buy FANGs, lever up Biotechs, oh, and bank stocks are below book value so must be a bargain… right?

 

via Zero Hedge http://ift.tt/1PA2G0T Tyler Durden

What a difference five days makes.

Recall last Wednesday evening, when none other than Goldman decided to be the latest to piggyback on gold’s torrid momentum, by saing “there’s scope for the gold price to extend much higher over time.” This is what Goldman’s chartists predicted:

The current area includes the 100-wma and the trend across the highs since March ’14 (wedge resistance). It’s formed an exhaustive looking candlestick pattern and oscillators seems to be turning. Basically, it seems a good place to start a corrective pullback. The 100-wma in particular was an important pivot in determining the start of the late-’12 decline.

 

 

From a wave count perspective, the market is likely in the initial stages of a counter-trend ABC correction which could eventually retrace ~38.2% of the 5-waves from ’11 to 1,381. From a pure techs perspective, breaking from a declining wedge would initiate a medium-term target back at the start of the pattern ~1,392.

 

Bottom line, although 1,200-1,202 might hold in the near-term, there’s scope to extend much higher over time.

Initially, this troulbed us because whenever Goldman tells clients to do one thing, the firm is doing precisely the opposite. After all, this is the firm whose Top 5 of 6 trade recommendations for 2016 were stopped out at a loss for anyone who followed them 6 weeks into 2016 as we wrote in “Goldman Capitulates: Closes Out 5 Of Its 6 Top Trades For 2016 With A Loss.”

How happy, then, we were, if very much unsurprised that less than a week later, as the gold momentum has been briefly snapped, that Goldman’s head of commodities has decided to take the other side of Goldman’s technical trade, and is now advising Goldman’s repeatedly crucified muppets, pardon, clients to short gold. Just moments ago, this is what Goldman’s head of commodities said:

As we maintain our view of rising US rates and hence lower gold prices with a 3-month target of $1100/toz and 12-month target of $1000/toz, we are recommending shorting gold through a GSCI-style rolling index. Ironically, gold has a negative yield and such a short would create a positive carry in a world concerned about negative interest rates that made gold rise in the first place. While we acknowledge that fears around systemic risks can push prices higher in the near term, we see such risks not offsetting the potential gain given how extreme pricing has become and the heavy data reporting period in coming weeks that will likely show that the while economic growth has slowed, it is not collapsing to the point to justify such extreme pricing across assets.

So “not collapsing” is the new “green shoots”? Got it. And then this:

We believe that the sharp rise in gold prices this past week was mostly due to concerns over systemic risks, particularly in the banking sector, given the sharp correlation of gold prices with bank stocks and other measures of systemic credit risks. While this is a continuation of a trend established since the beginning of the year that started with systemic concerns over oil and China, we believe that these new fears like the past fears are not justified. As our banks team argues, European banks, which are at the center of concerns over negative interest rates, can fund from the emergency funding facilities put in place in 2012 (the TLTRO remains barely used), money markets are open with no evidence of strain in either euro or dollar funding, while deposit growth is further adding to liquidity. All of this against a backdrop of higher capitalization aided by deleveraging suggests that a crisis re-run is unlikely.

That’s funny: remember the last time Goldman was very bullish on banks? It was in November, when going long big US banks was Top Trade #5 of Goldman’s 6 trades for 2016. This is what happened there:

Close long large cap US banks through the BKX Index relative to the S&P500 on 11 January 2016, opened on 19 November 2015 at 100, with a potential loss of 5.4%.

Don’t worry though, this time Goldman will get it right, promise.

Sarcasm aside, what is more important is that Goldman is now telling its clients to short gold through Goldman. Translation: after a brief period in which Goldman was actually shorting gold when it was telling it clients to buy it, the firm which controls every central banks is once again actively buying every golden ounce, in paper or physical format, its clients have to sell.

Finally, we can’t help but muse how right JPM’s Marko Kolanovic was once again when just last week the JPM quant said to buy gold with the following amusing comment describing his clueless peers:

The second argument was that of Momentum: “if an asset was going down, it will keep on going down,” We have concluded that many of our competitors rely on momentum in their commodity forecasts (e.g., when oil is $150, they forecast $200; when it is $30, they forecast teens). This type of trend following can always be rationalized (e.g., oil will go down because it is very difficult to store it – so it has to be sold; and Metals will go down because it is very easy to store them – so production will not slow down). While a simple momentum prescription does work most of the time, the key is to assess the likelihood of market turning points during which one can lose years of profits in a matter of days (less painful for a sell-side analyst and more for an investor).

But it works miracles for a sell-side analyst, like Goldman for examples, who also happens to be a prop investor taking the other side of the trade its own analysts recommend.

via Zero Hedge http://ift.tt/1oEkuiw Tyler Durden

Submitted by Charles Kennedy via OilPrice.com,

In an oil sector first, the oil-rich United Arab Emirates (UAE) has offered free oil to India in return for a storage deal at India’s planned underground facility as the supply glut worsens and some analysts predict that ‘’peak storage” could sending prices crashing further.

The UAE’s Abu Dhabi National Oil Company (ADNOC) has agreed to store crude oil in India's maiden strategic storage facility, sweetening the deal by saying India could take two-thirds of the oil for free.

It’s a great deal for India, which is almost fully reliant on imports to meet its crude oil needs.

India has lured Abu Dhabi in with the building of a massive underground storage facility system that will be able to take on 5.33 million tons of crude as a bulwark against global price shocks and supply disruptions.

ADNOC is eyeing half the storage capacity at one of the new underground facilities, Mangalore, which has a 1.5-million-ton capacity on its own. Abu Dhabi plans to stock 0.75 million tons, or 6 million barrels of oil, here, and 0.5 million tons will belong to India.

The deal is reflective of a wider, global storage panic and talk of what could happen when we reach ‘’peak storage’’. A number of analysts have suggested that oil prices might crash to $20, or even $10 a barrel, if storage tanks become full.

Storage is now at the highest level in at least a decade.

In the U.S., crude storage levels hit 487 million barrels in early November, closing in on the 80-year high of 490 million barrels hit earlier this year.

According to the U.S. Energy Information Administration (EIA), about 60 percent of the U.S.’ working storage capacity is filled.

Globally, the picture isn’t much better, with the International Energy Agency (IEA) saying that 1 billion barrels were added to storage in 2015 alone. OPEC has reported that crude oil stockpiles in OECD countries currently exceed the running five-year average by 210 million barrels.

This has given impetus to more creative storage ideas and will at least be a boon to massive storage projects such as India’s.

Floating storage—a more expensive option—is now looking more attractive as well. But to make this work, the math has to be in order, which means that front-end crude spreads would have to be wide enough to cover the cost of storing oil in pricey floating facilities.

Late last month, Bloomberg reported that trading giant Glencore had chartered four very large crude carriers (VLCCs) to store oil off Southeast Asia. But there’s still onshore storage capacity, and we’re not quite to the point where the floating option is widespread.

The U.S. still has 100 million barrels of available storage, and we should see more storage capacity by the end of this year. The Middle East is also slated to add capacity in the coming years, with the UAE specifically planning to expand its capacity to take on another 10 million barrels.

The analytical panic is perhaps premature. We’re not facing ‘’peak storage’’ just yet, but Abu Dhabi is playing it smart and safe.

Still, the UAE estimates the oil glut at 2 million barrels a day and growing, and its own storage expansion plans will benefit from this. After all, it houses the biggest oil storage port on the Persian Gulf—Fujairah Oil Terminal FZC—on the Hormuz Strait.

Fujairah received its first shipment just this month of 1 million barrels, and storage capacity is slated to increase 75 percent this decade.

via Zero Hedge http://ift.tt/1oEjlHR Tyler Durden

Early last month, we outlined the rapidly deteriorating security situation in Libya, which was transformed into a lawless wasteland in the wake of NATO-backed efforts to topple Muammar Gaddafi in 2011.

The story is hopelessly convoluted but generally speaking, there are two governments. One in Tripoli and one internationally recognized body operating out of Tobruk, where the House of Representatives remains in exile after efforts to form a unity government in the capital fell apart.

The fractured government makes protecting the state’s oil infrastructure virtually impossible in the face of an increasingly aggressive ISIS assault. Fighters loyal to Ibrahim Jadhran – the shady militia leader who effectively controls Libya’s oil exports – are fighting to secure the country’s crude, but ISIS is set to overrun them and even if they weren’t there are very real questions about where Jadhran’s loyalties lie.

(Ibrahim Jadhran)

Russian airstrikes in Syria and an increasingly capable Iraqi military have made Libya look more attractive to ISIS. There’s little in the way of airstrikes, the government is completely incapable of defending itself, and vast stores of oil are there for the taking. It’s against this backdrop that the US and Britain are considering a ground operation as part of an effort to “stabilize” the country, which is ironic because it was NATO that destabilized the country in the first place.

(an oil storage tank burns after an ISIS attack in Es Sider)

While it will likely be impossible for Libya to combat ISIS on its own, things would be helped immeasurably if the two competing governments could unite. UN-brokered negotiations produced a breakthrough last month, but on January 25, Parliament rejected a proposed 32-member cabinet out of concern that it was too large. That piece of bad news came just six days after representatives negotiating in Tunis announced they had formed a unity government.

Fast forward to Monday and we’re going to try this all over again apparently. On Sunday night, Libya’s Presidential Council named a revised lineup of ministers in another effort to form a unity government.

“In a sign of continuing divisions over how to bring together Libya’s warring factions, two of the council’s nine members refused for a second time to put their signatures to the proposed government,” Reuters reports, referencing the internationally-recognized governing body in Tobruk.

Mabrook to the Presidency Council for nominating Govt on Natl Unity. The journey to Peace and Unity of the Libyan people has finally started

— Martin Kobler (@KoblerSRSG) February 14, 2016

“We hope that this will be the beginning of the end of the conflict in Libya,” council member Fathi al-Majbari said from Skhirat, Morocco where both sides were negotiating. “Many of the names on Sunday’s list were different from last month’s proposal, though the nominee for the key post of defence minister, Mahdi al-Barghathi, was unchanged,” Al Jazeera says.

Trust us, this will not mark a new dawn for Libya. First, it’s not even clear the new list of ministers will be approved. Even if it is, and some kind of loosely assembled government is formed, both sides are backed by a hodgepodge of militias and former rebels. Uninting them around a common cause won’t be easy, especially in the midst of the ISIS assault.

For his part, Anas El Gomati, a political analyst and founder of the Tripoli-based Sadeq Institute isn’t holding his breath for peace.

“I’m quiet pessimistic about this new development. The majority of what’s fueling the civil war in Libya has been hidden behind the rhetoric around the ‘war on terror’, about saving the revolution but in fact most of the strategic fighting on the ground has been about resources: financial, military and other infrastructural resources around the country,” he told Al Jazeera. “The discussions have not focused anything more than bringing people to the table. So, we have got a peace government but we haven’t got a peace deal.”

Right. In other words, it’s a veritable free-for-all as everyone involved (including ISIS) scambles to get a piece of what was thrown up for grabs when Gaddafi fell. “The war on terror” may have been a good enough excuse to get everyone to the table but once the government is formed and it’s time to put aside differences, it’s unlikely things will go smoothy.

That means less of this…

And more of this…

On the “bright” side, once the unity government is formed and recognized it will be able to officially invite the US to intervene militarily against “the terrorists” which means that just as soon as Libya picks up the pieces from the last time the US broke the country, Washington will be waiting to come back in and break it all over again.

“Miss me yet?”

via Zero Hedge http://ift.tt/1TlHKOQ Tyler Durden

By EconMatters

The Euro weakened on Mario Draghi speaking regarding Monetary policy for the European Union today. Gold saw some profit taking as a result with the boost to the U.S. Dollar.

© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle  

via Zero Hedge http://ift.tt/1Qh7prE EconMatters

Submitted by Howard Kunstler via Kunstler.com,

It ought to be a foregone conclusion that Mr. Obama’s replacement starting January 20, 2017 will preside over conditions of disorder in everyday life and economy never seen before. For the supposedly thinking class in America, the end of reality-optional politics will come as the surprise of their lives.

Where has that hypothetical thinking class been, by the way, the past eight years? Don’t look for it in what used to be called “the newspapers.” The New York Times has become so reality-averse that the editors traded in their blue pencils for Federal Reserve cheerleader pompoms after the Lehman incident of 2008. Every information-dispensing organ has followed their lede: The Recovery Continues! It’s a sturdy plank for promoting the impaired asset known as Hillary.

Don’t look for the thinking class in the universities. They’ve surrendered their traditional duties to a new hybrid persecution campaign that is equal parts Mao Zedong, the Witches of Loudon, and the Asylum at Charenton. For instance the President of Princeton, Mr. Eisgruber, was confronted with a list of demands that included 1) erasure of arch-segregationist Woodrow Wilson’s name from everything on campus, and 2) creation of a new all-black (i.e. segregated) student center. He didn’t blink. Note: nobody in the media asked him about this apparent contradiction. That’s how we roll these days.

Don’t look for the thinking class in business. The C-suites are jammed with people still busy buying back stock in their own companies at outlandish prices with borrowed money. Why? To artificially boost share price and thus their salaries and bonuses. Does it do anything for the fitness of enterprise? No, in fact it makes future failure more likely. Why is their no governance of their insane behavior? Because they’ve also bought and paid for boards of directors composed of a rotating cast of praetorian shills, with fresh recruits entering the scene weekly through the fabled “revolving door” between business and government regulators.

Oh, and then there’s government. Anyone viewing the boasting-and-defamation contests that the cable TV networks call “debates” knows that these spectacles are based on the opposite of thinking. They are not only reality-optional, they’re thought-optional. Hence, it appears for now that America is fixing to elect either a primal screamer or a road-tested grifter to preside over the epochal collapse of our hobbled, exhausted, way of life.

The recent carnage in the stock markets will probably see a retracement after the President’s Day hiatus. They’re bouncing up in other parts of the world today, the triumph of hope over all the available evidence that something fatal has happened out there in Tom Friedman’s supposedly permanent global economy. Some observers suspect that it has something to do with the price of oil, because the oil futures market and the stock indexes seem to go up and down in tandem. But they don’t really get it.

How hard is it to understand that A) that something adverse happens to oil companies when it costs them $70-a-barrel to hoist the product out of the ground and then sell it for $30-a-barrel? And B) that all of the infrastructure of techno-industrial civilization was designed to run on oil under $30-a-barrel and founders when the price goes higher? That’s how it is. That’s your basic reality.

We’ve been trying to work around this vexing problem — the non-linear manifestation of the supposedly bygone predicament called “peak oil” — since the early part of this century. Mainly, we worked around it by borrowing money that wasn’t there. Having created this matrix of borrowed money, we’ve also created an expectation in market obligations that it must be paid back. In fact, the process of paying back money owed is the only thing that supports confidence in a system based on that essential trust — even if that expectation was unreal to begin with. When it is violated, terrible things happen in markets and economies.

Those terrible things are underway. We’re going to be a much-distressed and poorer so-called republic when this year is done with us. The markets will crack and the trade relations that comprise globalism will fall apart as nations and regions of nations struggle to survive. We’ll move inexorably to a very possibly disastrous election. We’ll face the basic choices, as distressed societies always do, of freaking-and-acting-out (usually in the form of war), or opting for a reunion with reality and its mandates. So far, it’s not looking good for the better option.

If you are a thinking person, the months ahead might be your last chance to protect whatever wealth you have and to move to some part of the country where, at least, you can grow some of your own food and become a useful part of a social and economic network that might be called a community.

via Zero Hedge http://ift.tt/1PzQ1eh Tyler Durden

Having bounced 22% off Thursday’s lows, amid endless confidence-inspiring chatter (of buybacks, bailouts, bank CEO buys, and SWFs saving the day), Deutsche Bank closed lower on the day, tumbling over 6% from its opening highs as the reality of the credit markets continues to sink in.

 

So, no, Deutsche Bank (and its $64 trilion derivatives book) is not “fixed” – far from it…

 

You Are Here…

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