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After a violent trifecta of a day, in which terrorist attacks left at least 9 dead and 50 injured in Germany after a truck plowed through a crowded Christmas market (see “Truck Ploughs Into Berlin Market Killing Nine, Over 50 Injured; US Condemns ‘What Appears To Be A Terrorist Attack’“); three more people hurt in a shooting at an Islamic Center in Zurich, Switzerland; and the Russian Ambassador to Turkey murdered on live television (see “Russian Ambassador In Turkey Murdered In Terrorist Attack By Shooter Screaming “Allahu Akbar” – Live Feed“), president-elect Trump dares to suggest that something has to change… 

Today there were terror attacks in Turkey, Switzerland and Germany – and it is only getting worse. The civilized world must change thinking!

— Donald J. Trump (@realDonaldTrump) December 19, 2016

Of course, this kind of insensitivity will merely inflame those left-leaning, more-immigration-is-better, everything-is-awesome members of society who will just keep ignoring this trend until it randomly strikes their own family (especially after a record number of Democratic electors migrated to the dark side).

Ironic really that “hope” is at near record highs across sentiment measures (markets and economics) and now Trump is calling for “change.”

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Submitted by Tsvetana Paraskova via OilPrice.com,

President-elect Donald Trump has started naming his picks for key administration offices, and it looks like he is beginning to assemble a team to deliver on at least part of his campaign promises of An America First Energy Plan.

Trump’s agenda includes lifting restrictions and opening onshore and offshore leasing on federal lands, eliminating the moratorium on coal leasing, and opening shale energy deposits. The President-elect’s key arguments for these policies are creating high-paying jobs, lessening and even eliminating America’s energy dependence, increasing tax revenues, and adding billions of dollars in economic activity.

Even if Trump were to deliver on all his pledges – as far as federal law and federal regulations are concerned – the U.S. oil production would be driven by the market—the economics of the supply and demand that determine the prices of oil.

At the time of Trump’s inauguration on January 20, OPEC and a dozen non-OPEC nations are set to begin to reduce crude oil supply with the purpose of killing the global glut and lifting oil prices. Ideally, OPEC/NOPEC taking 1.8 million bpd off the market would speed up the drawdown in global stockpiles and prop up prices.

In reality, few expect OPEC to stick to its commitments and cut as much as promised.

Still, oil prices are now north of US$50, and OPEC (even if some members cheat) may be able to talk prices up a month or so more. American production has been suffering the consequences of the two-year oil price rout, but if oil stays over US$50 for longer, it would entice more U.S. producers to return to work. Oil prices at US$60 or more would lead to even more confidence among U.S. producers—producers who are now ‘leaner and meaner’ and carefully choosing how to invest.

Essentially, Trump’s vision that the oil and natural gas industry could lead to the creation of “another 400,000 new jobs per year” depends on a resurgence in U.S. production, based on higher oil prices. And oil and gas companies in a recovering market may really need to add more jobs after having cut thousands of jobs over the past two years.

In the short term, it will be oil prices that would swing American production, not Trump’s pledge to lift restrictions on federal land. According to the Bureau of Land Management (BLM), the average approval timeframe for an application for permit to drill (APD) between 2005 and 2015 was somewhere around 200 days. The average number of days in which operators resolve any deficiencies has been higher than the number of days the BLM needs to process and complete an APD in every year since 2005 except in 2006 and 2008.

Trump’s promised rise of oil and gas production over the years could have several consequences: kill the oil price increase due to more supply available, lessen America’s dependence on foreign oil (especially OPEC oil as pledged by the President-elect), and increase U.S. exports of LNG and oil.

Increased U.S. production would be good for the oil and gas industry, and would create jobs not only in the sector but also in other industries and in all economic activity in areas close to energy producing sites.

Following the nomination of former Texas Governor Rick Perry as Secretary of Energy, American Petroleum Institute (API) president and CEO Jack Gerard “called on the nominee to make LNG exports a top priority at the Department of Energy,” the API said in a statement on Wednesday.

As for exports, Trump’s Administration may need to strike a delicate balance between increasing LNG exports and keeping enough cheap gas at home to avert price shocks for consumers.

What’s certain is that the oil and gas industry would curry more favor with the new Administration as opposed to the existing one, but any U.S. shale rebound is largely dependent on how oil prices fare, and how companies respond to those price increases.

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Much time and effort have been spent speculating over what Barack and Michelle will do in retirement.  A few weeks ago, we noted one theory that Obama was plotting the launch of his very own “fake news” media empire (see “Obama TV: Is Obama Planning A “Fake News” Outlet Of His Own?“).  Despite ruling it out several times, many have also wondered whether Michelle will follow in Hillary’s footsteps and run for public office.  Or, perhaps they will just take the easy way out and start a “charity” that they use as front to personally enrich themselves with massive donations from Wall Street and controversial foreign dictators.

While you can never rule any of the options above out, President Obama told NPR that he’ll spend his time in retirement trying to “rehabilitate” the Democratic Party by becoming a “recruiting scout” for young talent. 

President Obama sees a role for himself in rebuilding the Democratic Party after he leaves office — coach.

 

“What I am interested in is just developing a whole new generation of talent,” Obama told NPR’s Steve Inskeep in an interview on Morning Edition.

 

“There are such incredible young people who not only worked on my campaign, but I’ve seen in advocacy groups,” Obama said. “I’ve seen passionate about issues like climate change, or conservation, criminal justice reform. You know, campaigns to — for a livable wage, or health insurance. And making sure that whatever resources, credibility, spotlight that I can bring to help them rise up. That’s something that I think I can do well, I think Michelle can do well.”

Of course, as NPR points out, Democrats will have their work cut out for them after two cycles of devastating defeats that have left Republicans with majorities in the House and Senate, 33 out of 50 governor seats and complete control of governors’ offices and state legislatures in 25 states compared to only 6 states for democrats. 

They’ll have their work cut out for them. Republicans will control the House, Senate and White House when President-elect Donald Trump is sworn in Jan. 20. That’s a reversal of the situation Obama found himself in when he took office eight years ago — the peak of massive Democratic electoral gains at the end of the Bush administration.

 

And on the state level, Republicans head into 2017 with 33 out of 50 governors — more than in nearly 100 years. The GOP will have complete control of the governors’ offices and state legislatures in 25 states, while Democrats will hold complete control in just six states. Republicans solidified gains that started in 2010 by drawing favorable congressional and statehouse districts in many states during the redistricting process.

 

Democrats find themselves in a deep hole after an election that most party officials expected to win.

Meanwhile, echoing comments he’s made before, Obama noted that the 2016 election wasn’t a rejection of failed Democratic policies…

Obama told NPR that he disagreed with suggestions the party should change its policy platforms, instead attributing losses to messaging and strategy.

 

“I don’t think there’s something wrong with the core argument that the Democratic Party has made for years,” the president said. “And the reason we know that is because on the individual issues that Democrats talk about there’s strong support. For example, the minimum wage. In every survey across the country, people support a higher minimum wage. There are clearly, though, failures on our part to give people in rural areas or in ex-urban areas, a sense day-to-day that we’re fighting for them or connected to them.”

 

The president said his party has “ceded too much territory” to Republicans in local races. “I am a proud Democrat,” he said, “but I do think that we have a bias towards national issues and international issues.”

…but rather, a failure of Hillary to visit a sufficient number of “VFW halls and at fish fries” in the Midwest.

As he’s done before, though, Obama also faulted Democrats for failing to compete — or even show up, at times — in rural areas. He talked about campaigning in rural Illinois while running for Senate and making repeated visits to Republican-friendly corners of Iowa during the 2008 campaign, “and just sitting down in people’s living rooms and VFW halls and at fish fries and listening to people.”

 

“Which meant that in 2012,” the president continued, “I might still lose the overall vote and some of these counties or some of these voting districts but I might lose 55-45 or 60-40, rather than 80-20.”

We wish Mr. Obama the very best in finding new Democratic “talent” willing to peddle all the same policies adopted by he and Hillary over the past 8 years but roundly rejected by voters just over a month ago…we hope his efforts serve the democratic party well.

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Despite Christine Lagarde’s conviction earlier on Monday for failing to overturn a 285-million euro payout to a businessman in an arbitration case while she was France’s finance minister nearly a decade ago – a verdict for which the 60-year-old IMF chief won’t face a fine or prison term – the Executive Board of the International Monetary Board decided that her transgression was not too extensive, and reaffirmed its full confidence in Lagarde, indicating support for her to remain managing director of the lender despite being convicted of negligence by a French court.

“The Executive Board took all relevant factors into account in its discussions, including the Managing Director’s outstanding leadership of the Fund and the wide respect and trust for her leadership globally,” the executive board said in a statement. “In this context, the Executive Board reaffirms its full confidence in the Managing Director’s ability to continue to effectively carry out her duties.”

“The Executive Board looks forward to continuing to work with the Managing Director to address the difficult challenges facing the global economy.”

As if nothing happened.

Ironically, according to her terms of appointment, Lagarde must strive to avoid “even the appearance of impropriety”, such as what happened today. She can be terminated at any time by the 24-member executive board, which represents the IMF’s 189 member nations. Still, the board has maintained confidence in her since it was announced a year ago that she would face trial in France.

Lagarde was reappointed for her second five-year term this year when no challengers emerged. She became the first woman to run the Washington-based fund, after its previous head, Dominique Strauss-Khan was embroiled in a sexual scandal involving a hotel maid in New York City.

The IMF statement was unambiguous in its praise. “The Executive Board took all relevant factors into account in its discussions, including the Managing Director’s outstanding leadership of the Fund and the wide respect and trust for her leadership globally,” according to the statement.

As Bloomberg adds, other officials jumped to Lagarde’s defense: U.S. Treasury Secretary Jacob Lew reaffirmed his “full support” for Lagarde in a statement, calling her a “strong leader” during a critical time for the world economy. France’s Finance Ministry published a statement expressing “full confidence” in the IMF chief. 

Lagarde is the third straight IMF managing director to run into legal issues. Her predecessor Dominique Strauss-Kahn resigned after a hotel maid accused him of sexual assault. Prosecutors dropped a criminal case amid inconsistencies in her testimony, and Strauss-Kahn reached an undisclosed civil settlement with the woman. Last year, he was acquitted in France of charges of aggravated pimping in connection with a string of sex parties.

Rodrigo Rato, who preceded DSK at the IMF, has been accused in Spain of misusing credit cards during his time at Bankia SA. Rato has denied acting inappropriately.

But perhaps the biggest factor influecing the board’s decision was the risk of having to pick a new head at a time of turbulent political upheaval in the US. In backing Lagarde, Bloomberg wrote, the fund’s executive board avoids the task of having to select a new managing director as the U.S. transitions to a new administration under Donald Trump. One of Trump’s finalists for secretary of state, John Bolton, wrote in a recent opinion piece that the world should think creatively about how to reform the IMF, and consider privatizing development lenders such as the World Bank.

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The President who once taunted Republicans in Congress with phrases like “elections mean something” and “I’ve got a pen, and I’ve got a phone” before signing a litany of executive orders, is now admonishing President-elect Trump on doing the same.  In an interview posted this morning with National Public Radio, Obama said that while Trump would be “entirely within his lawful power” to sign executive orders, his “preference” should be to govern through bipartisan legislation.

That’s something Obama said he accepts: “If he wants to reverse some of those rules, that’s part of the democratic process. That’s, you know, why I tell people to vote — because it turns out elections mean something.”

 

Obama told NPR that Trump is “entirely within his lawful power” to sign new executive orders of his own. “Keep in mind, though, that my strong preference has always been to legislate when I can get legislation done. In my first two years I wasn’t relying on executive powers because I had big majorities in the Congress and we were able to get bills done, get bills passed. And even after we lost the majorities in Congress, I bent over backwards consistently to try to find compromise and a – a legislative solution to some of the big problems that we’ve got.”

 

Obama pointed to immigration, saying he “held off for years in taking some of the executive actions that I ultimately took in pursuit of a bipartisan solution.” He was referring to a big immigration reform package that was crafted by a bipartisan group of senators and passed the Senate in 2013, only to be stalled in the House with objections from conservatives, in particular to the “path to citizenship” that the bill would have provided for many in the country illegally.

And while Obama fondly reminisces about some alternate reality in which he attempted to work closely with Republicans in “pursuit of bipartisan solutions,” in reality he repeatedly taunted his opposition with catch phrases like “I’ve got a pen, and I’ve got a phone” which ultimately made bipartisan legislation all but impossible.

Meanwhile, we suspect that telling Republicans they could come along for the ride but would have to “sit in back,” also didn’t help his efforts to work with folks from across the aisle.

But sure, President Obama, we’re confident that Trump will heed your advice on the use of executive orders and all of your controversial actions of the past 8 years, many of which were vehemently opposed by roughly 50% of the population, will remain untouched…no need to worry about that “legacy” issue at all.

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In the latest example of poor decision-making by the outgoing president, not to mention some truly troubling political optics, with the world on fire following three separate acts of apparent terrorism around the globe, including Ankara, Zurich and Berlin, White House pool reports showed that President Barack Obama was off to enjoy a game of golf shortly after learning of today’s tragic events.

As Mediaite reports, the first email from the White House pool shows that Obama directed his staff to keep him updated on the situation in Turkey regarding the assassination of the Russian Ambassador.

Subject: Press Pool Report 4

 

From the White House, per Principal Deputy Press Secretary Eric Schultz:

 

“This morning the President was briefed by his National Security Team on the assassination of the Russian Ambassador to Turkey in Ankara today. The President directed his team to provide updates as warranted.”

 

Meanwhile, at 10:10 a.m. in Kailua, the press van prepares to depart the rental house where we’ve been holding.

In a following email, we are informed that Obama is leaving the rental home to go play golf.

Subject: Pool report 5

 

The President and his motorcade departed the Kailua neighborhood where the First Family rents a vacation home at 10:21 a.m. Spectators on the street threw shakas and recorded photos or video on cell phones as the motorcade made the 10-minute drive to Mid-Pacific Country Club, where the President will be golfing under cloudy skies.

Despite his relaxing schedule, Obama di manage to squeeze in a record number of commutations, pardons, and sentence reductions. The Press Secretary’s office did release a statement on the assassination at least.

Statement by NSC Spokesperson Ned Price on the Assassination of Russian Ambassador to Turkey Andrei Karlov

 

The United States strongly condemns the assassination of the Russian Ambassador to Turkey, Andrei Karlov, in Ankara today, which reportedly also left others wounded. Our thoughts and prayers are with the families and loved ones of Ambassador Karlov and the other victims, and we offer our condolences to the Russian people and Government. This heinous attack on a member of the diplomatic corps is unacceptable, and we stand united with Russia and Turkey in our determination to confront terrorism in all of its forms.

With the global news dominated by both the assassination in Turkey, which will have significant implications on foreign policy and relations, and multiple deaths in Berlin via a truck driving through a market in an incident reminiscent of the Nice terror attack, Obama felt it was prudent to enjoy himself for the next few hours. 

Needless to say, there will be a lot of negative attention given to Obama playing golf in the immediate aftermath of these tragic events.

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Just weeks after Ford idled four plants "due to slowing sales", GM and Fiat Chrysler announced today that they will idle seven plants across Canada and US as they work to reduce near-record high inventories amid weakening sales.

With an inventories-to-sales ratio above historical peaks (only beaten by huge spike in 2008 when sales stopped), the pain for automakers has only just begun…

For example, GM's inventory of vehicles on dealer lots at the end of November stood at 874,162, up 26.5% from the same time a year ago. And so, as AP reports,

General Motors will temporarily close five factories next month as it tries to reduce a growing inventory of cars on dealer lots.

 

The factories will close anywhere from one to three weeks due to the ongoing U.S. market shift toward trucks and SUVs, spokeswoman Dayna Hart said Monday. Just over 10,000 workers will be idled.

 

The company's Detroit-Hamtramck factory and Fairfax Assembly plant in Kansas City, Kansas, each will be shut down for three weeks, while a plant in Lansing, Michigan, will be down for two weeks. Factories in Lordstown, Ohio, and Bowling Green, Kentucky, each will be idled for one week.

 

The factories make most cars in the General Motors lineup including the Chevrolet Cruze, Camaro, Corvette, Malibu, Volt and Impala; the Cadillac CT6, CTS and ATS; and the Buick Lacrosse.

 

At the current sales pace, GM dealers have enough Malibus to last for 84 days and enough Camaros to last for 177 days, according to Ward's Automotive.

 

Normally automakers like to have a 60-day supply on lots.

If that were not bad enough, Fiat Chrysler said it is adding four off days to the Jan. 2 observation of New Year’s at its minivan assembly plant in Windsor, Ontario, and its large-car facility in Brampton, Ontario.

The moves are to align production with demand, spokeswoman Jodi Tinson said in an e-mail.

 

The automaker has already stopped making the Dodge Dart and Chrysler 200 sedans.

 

A factory in Belvidere, Illinois, will make its last Jeep Compass and Patriot models this week, allowing retooling for Cherokee production, she said.

Worst of all, while the rest of the US manufacturing sector has been in secular decline, the auto industry was perhaps the last shining light for battered US manufacturing during the past several years. However, if demand for cars continues to collapse, forcing supply to follow suit, it is only a matter of time before the US manufacturing recession returns with a vengeance, and at the worst possible time: when not even the US service sector can hinder the realization that the US economy is on the verge of contracting.

Finally, here are some auto-related charts courtesy of Goldman Sachs.

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Bail-Ins Coming To Italy? World’s Oldest Bank “Survival Rests On Savers”

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