صحيفة: صندوق النقد يشارك بخمسة مليارات يورو في برنامج إنقاذ اليونان

قالت صحيفة “دير شبيجل” الألمانية في تقرير اليوم إن صندوق النقد الدولي من المرجح أن يساهم بما يصل إلى خمسة مليارات يورو ضمن حزمة الإنقاذ الثالثة لليونان. وأشارت الصحيفة إلى أن البنوك الأوروبية تتوقع مشاركة الصندوق بمبلغ يقترب من ذلك الحجم، بعد أن كانوا يأملون سابقاً في مشاركته بنحو 16 مليار يورو. وفي وقت سابق […]

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النفط يبقي على خسائره.. والخام الأمريكي أدنى 53 دولارا

انخفضت أسعار النفط خلال تداولات الجمعة متأثرة بارتفاع الدولار مقابل أغلب العملات الرئيسية، وتتجه لتسجيل خسائر أسبوعية، وذلك قبيل صدور بيانات عدد منصات التنقيب في الولايات المتحدة اليوم. ومن المنتظر في وقت لاحق إعلان شركة “بيكر هيوز” (BHI.N) للخدمات النفطية عن عدد منصات التنقيب عن الخام في أمريكا خلال الأسبوع الجاري. وفي سياق منفصل، ارتفع […]

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Permian Panic Continues As Rig Counts Rise Amid Record Glut In Crude

With a record glut of crude and gasoline, US crude production pushed to new cycle highs this week and continues to track lagged rig counts.

US crude inventories are at a new record high…

 

And so are Gasoline inventories…

 

And the rig ccount keeps rising with lagged oil prices…

  • *U.S. OIL RIG COUNT UP 6 TO 597 , BAKER HUGHES SAYS      :BHI US

Highest since October 2015

 

Production keeps rising, and has a long way to go to catch up to the lagged rig count…

 

And the oil algo idiocy from DOE data has been erased with RBOB back below $1.50…

 

The surge in rigs has been driven almost 100% in the Permian, but as OilPrice.com’s Nick Cunningham asks, how much longer that the Permian craze continue?

The two great dueling forces in the world oil market, OPEC and American production, have created an atmosphere of uncertainty, as prices hover above $50. Last week the EIA reported another record inventory and an increasing rig count, while analysts point to a possible crisis as a market held aloft by buoyant predictions of OPEC cuts slowly faces up to insufficient demand.

Crucial to this situation is the state of the U.S. patch, particularly the Permian Basin, which since late last year has been the focus of recovering production. The EIA data for the field is good, with new well production rising sharply and overall production of oil and gas rising sharply in 2017. While some speculate the bubble may burst, prospects for companies already invested in the Permian look positive, even if production costs are rising.

The Permian has seen the highest increase in rig count of any U.S. basin. Six of the twelve rigs added last week went up in the Permian, and its total now stands at 301 rigs, up from 172 a year ago, out of a total U.S. count of 741. In total the count is up 83 percent from May 2016, though it has yet to reach the booming numbers of 2013, when over two thousand rigs were in operation. Even 2015, as the U.S. sector was being squeezed by low prices, saw the total count hovering near two-thousand, according to Baker Hughes.

The increase is coming hot on the heels of the OPEC production deal, and seems to be in direct correlation with the OPEC announcement of nearly 900,000 bpd in cut production this month. For now, markets are happy, but underlying fundamentals remain as they were: cut production in Saudi Arabia and elsewhere will be made up by a resurgent American sector.

Last month, ExxonMobil paid $6.6 billion in order to double its exposure in the Permian, the single largest domestic U.S. oil deal since the price collapse in 2014, according to Forbes. Noble Energy announced in January 2017 it was acquiring Clayton Williams Energy for $2.7 billion, adding seventy-one thousand acres to its holdings in the Permian, specifically in the Southern Delaware Basin. 

Austin-based Parsley Energy has been acquiring more acreage, amounting to $2.8 billion, and looks set to be a major Permian player, though its acquisitions came in at a steep $37,000/undeveloped acre.

That looks better when compared to other recent Permian purchases, where land is going for as much as $60,000/undeveloped acre, according to Bloomberg. Those prices are ten-times what drillers pay in the Bakken field in North Dakota, where oil production has fallen off, according to EIA data, and the rig count has fallen. Parsley got a better deal than Concho Resources Inc.’s acquisition last year from Reliance Energy, where the price averaged $45,000/undeveloped acre.

Bloomberg is predicting the steep prices in the Permian will drive away some investors and trigger a backlash. Companies without a foothold will look elsewhere. This thinking explains why Exxon and Parsley made such big grabs, before prices really got out of control.

But for those with the wherewithal, the Permian pays off better than any other field. Occidental Petroleum Corp., which thinks of the Permian as its “growth engine,” has indicated its keeping its primary focus on its 2.5 million acres there, where production costs are so low a price threshold below $40/barrel still assures profitability. The Permian’s so rich, one Occidental exec noted to Natural Gas Intel, “It is pretty hard to drill a dry hole there.” With that in mind, however, Occidental has looked to cut its costs in the Permian by as much as twenty-five percent, in order to make up for steep losses in 2016 Q4. 

Other companies that are focused entirely on the Permian, like Diamondback Energy Inc., are not backing out. The company announced its production climbed thirty-eight percent, with Q4 production rising sixteen percent. The late-year boost, the result of the rise in prices on the back of the OPEC deal, helped out other Permian producers. But costs are rising, as running a well per-day rose from $13,900 to $16,000 in the space of a few months last year, according to CNBC.

The high price of getting into the Permian may be offset by the relatively low costs of producing there, as well as the abundance of oil and natural gas that await almost any driller who sinks a well. But if the land rush is in fact over, and attention swings elsewhere, the surge in Permian activity may slacken. That, of course, may be affected if the current bullish swing in prices comes to an end, and if analysts’ predictions of a sharp reduction in prices come to pass.

Some storm clouds related to the high cost of land may inhibit Permian growth, but with production costs low and opportunities bountiful, for those companies already invested the Permian will likely continue to pay off for at least the next year.

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Turkey’s Erdogan: Muslim Brotherhood is ideological, not terrorist organisation

Turkish President Recep Tayyip Erdogan has come out in defence of the Egyptian Muslim Brotherhood after recent international pressure against the movement, particularly from the United States, seeks to list the group as a terrorist organisation. Erdogan said that he did not consider the Brotherhood to be a terrorist organisation because “it is not an armed group, but is in actual fact an ideological organisation,” adding that “there would be no tolerance for the Muslim Brotherhood in Turkey if they had anything to do with terrorism, and we have not seen or observed any action [from them] that indicates this.” Erdogan’s comments were made during an interview with the Saudi-owned Al Arabiya during his recent visit to the Saudi Arabian […]

You Cannot Artificially Create Demand

By EconMatters


We discuss the fact that the market could get all three of its wishes in tax cuts, an infrastructure spending plan, and deregulation and still go into a recession because the natural course of the business cycle trumps all of these on the margin policy growth drivers. I would put it at around 50% that the US Economy signals to the market that we are entering a recessionary downturn this year. The hard economic data is much softer than the market realizes given the upbeat soft market sentiment data.

Investors are often pointed in the wrong direction at crucial turning points. A normal business cycle last about 6-8 years, 10 years is pushing it. There are only so many houses and cars that need to be supplied to the market in a given time, real structural demand is what moves the economy, not meetings with CEOs promising to create more jobs. We have had quite a run since the 2008 financial crisis, with everything from clunkers for cash, bank bailouts, unlimited stimulus, zero percent interest rates, etc. which has brought a lot of demand forward with regard to many goods and services like automobiles and houses.

We could get all of Trump`s initiatives and still roll over in the business cycle, or Trump policies could actually quicken the tightening of the credit market, and send the economy into a recession faster than without policy changes. Shoot we could drop in the stock market just by valuations alone because financial markets are in a bubble. Market participants are rather complacent and oblivious to the risks associated with asset prices at these levels given that we are most likely at the late stages of the current business cycle in my opinion.

 

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

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Put Up Or Shut Up: Judicial Watch Sues FBI, NSA, CIA For Flynn Records

As we noted previously, given the FBI has already ‘cleared’ Flynn, the only possible path for escalation from here by the deep state, is to leak the actual recorded calls to the press, thus “proving” Flynn lied.

Furthermore, as Mike Krieger recently raged, the public should demand the Flynn transcripts

…How do we know what was really said without the transcript? The New York Times tells us…

 

During the Christmas week conversation, he urged Mr. Kislyak to keep the Russian government from retaliating over the coming sanctions — it was an open secret in Washington that they were in the works — by telling him that whatever the Obama administration did could be undone, said the officials, who spoke on the condition of anonymity because they were discussing classified material. Federal officials who have read the transcript of the call were surprised by Mr. Flynn’s comments, since he would have known that American eavesdroppers closely monitor such calls. They were even more surprised that Mr. Trump’s team publicly denied that the topics of conversation included sanctions. Prosecutions in these types of cases are rare, and the law is murky, particularly around people involved in presidential transitions. The officials who had read the transcripts acknowledged that while the conversation warranted investigation, it was unlikely, by itself, to lead to charges against a sitting national security adviser.”

 

I have so many issues with the above reporting it’s hard to know where to start. Everything mentioned above is given to us secondhand via “anonymous American officials.” Nowhere do I see any specific quotes from the transcript, despite the fact that the paper admits it talked with federal officials who read it. Why not? Why must we hear about the content of the transcripts secondhand from anonymous officials? This is the most significant red flag with this whole story. If the leakers were truly interested in transparency, and wanted the public to know the truth, why not leak the transcript to Wikileaks and let the public decide?

 

I’ll tell you why. They didn’t do this because transparency was never the goal here. They wanted to illegally use intelligence information to take a scalp from a Trump administration they hate, and they knew they could do this via mainstream media journalists. I know what you’re thinking, Edward Snowden didn’t leak everything to Wikileaks either. He likewise picked a few journalists and trusted them to responsibly report the information. How is this any different?

 

It’s different in two important respects. First, we are talking about a single transcript, or a few transcripts, as opposed to the enormous intelligence data-dump that Snowden provided. Secondly, The Intercept and others who reported on the Snowden material provided a huge amount of primary source documentation for the public to see so that it could come to its own conclusion.

 

They didn’t simply tell everyone what to think about leaked documents while refusing to share any actual content. Where are the specific, comprehensive quotes from the Flynn transcript? Why doesn’t the public have a right to see the entire thing? Instead, we are being told what happened and what to think via secondhand anonymous sources. Sorry, but this doesn’t cut it for me.

 

I have yet to see any excerpts from the transcript. All I’ve seen is what anonymous officials say was discussed. This is absurd. We the people should demand the content of the relevant transcripts so we can decide for ourselves just how bad Flynn’s actions were. In the absence of this, we’re essentially being manipulated on a massive scale by rogue intelligence agents and told what to think through the major newspapers. This doesn’t cut it for me. I want to see the content of these conversations so I can make up my own mind. Perhaps it’s even worse than we know. So be it. We should be treated as adults and allowed to see the actual conversation if it’s going to be made into a story of such huge national importance.

And today, absent any other adults in the room, we learn that conservative watchdog Judicial Watch is planning to sue several government agencies if they do not hand over records related to the wiretapping of former National Security Adviser Michael Flynn. The group filed Freedom of Information Act requests for the records weeks ago but are planning to sue by next week for the records if they do not receive anything by then.

Judicial Watch filed the requests with the FBI, NSA, CIA, and Treasury Department, according to the group’s Director of Investigations and Research Chris Farrell. Below is a tweet from Judicial Watch President Tom Fitton on the National Security Advisor scandal.

The unprecedented FBI/DOJ investigation of Flynn and @realDonaldTrump transition reeks of corruption. @JudicialWatch investigating.

— Tom Fitton (@TomFitton) February 14, 2017

Additionally, Chris Farrell, Director of Investigations and Research, had the following to say about the wire tapping of Flynn.

READ THIS to cut thru the Flynn hysteria & smear campaign: The CIA really is out to get General Flynn https://t.co/WjlyUgmP0T

— Chris Farrell (@cjtfarrell) February 13, 2017

 

Furthermore, In an article titled “DOJ is also a target of President Trump’s probe into leaks” by the publication Circa, Chris Farrell was quoted saying,

“it would be a very narrow universe of persons who would have had access to that classified material. Even the number of persons who would have access should be definable. That sort of communication intelligence, or comment collection activity is very specific. The list of people is narrow.”

Rest assured, Judicial Watch is committed to uncovering the truth and holding those individuals accountable who may have broken the law.

One way or another the ‘leaking’ intelligent officials need to ‘put up or shut up’ with their Flynn allegations – leak (or release to JW) the transcript or stop the fake news supposition.

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American Express Lists Trump Administration As A Risk Factor In 10-K

That didn’t take long.

Earlier this week we reported that in the latest escalation between some prominent US corporations and the Trump administration, “Trump’s Twitter blasts, which often drive ‘yuge’ market reactions and come without warning, are forcing companies across the country to draft plans for “war rooms” to address a surprise presidential tweet.  Moreover, other companies are actively exploring strategically placing ads on MSNBC’s “Morning Joe,” CNN and “The O’Reilly Factor”—programs and networks fro which Trump has often appeared to draw inspiration for his tweets.”

Other companies took a different track, and began “aggressively promoting previously announced job creation numbers in an effort to head off any criticism from the White House.  The latest example of such a move came from Intel’s CEO, Brian Krzanich, who recently visited the White House to tout a $7BN investment in a facility in Chandler, Arizona which was already announced under the Obama administration.”

Today, we witnessed the first example of an even more pre-emptive approach to a potential showdown between a company and Trump. For the first time – that we are aware of – American Express has listed, in addition to “global economic and business conditions”, the Trump Administration as a risk factor in it 10-K filing:

changes in global economic and business conditions, consumer and business spending, the availability and cost of capital, unemployment rates, geopolitical conditions (including potential impacts resulting from the U.S. Administration and the proposed exit of the United Kingdom from the European Union), foreign currency rates and interest rates, all of which may significantly affect demand for and spending on American Express cards, delinquency rates, loan balances and other aspects of our business and results of operations;

In retrospect, this is a smart move: should anything “adverse” happen, the company can simply goal seek effect and cause, and ultimately blame it all on Trump, a trend we have seen emerge in increasingly more aspects of the economy, monetary policy and capital markets. Meanwhile, shareholders have been duly put on notice.

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Why 13D Founder Kiril Sokoloff Is Bearish On “The Most Crowded Trade In The World”

Two weeks ago, when laying out the ongoing battle over the most controversial proposal in Trump’s economic plan – the Border Adjustment Tax – we said that one of the biggest, and still undetermined unknowns is whether Trump will pursue a “stronger or a weaker Dollar” as there is a distinct lack of coherence between some of his fiscal proposals and their contradictory impact the US currency.  Overnight, one of our favorite newsletter writers, Kiril Sokoloff, author of the popular 13D’s “What I Learned This Week” newsletter, framed this all-important question similarly: “The key question is whether the Trump administration wants a weaker dollar to boost US exports.”

His answer is “yes” and in addition to forecasting that the Fed will not hike three times in 2017 as the FOMC expects, he also notes that “given the fact that on a purchasing parity basis, the dollar is extremely overvalued versus the euro the yen and the British pound, it seems to us that the best strategy is to talk the dollar down” and adds that “based on several factors, we think the Trump economic plan may take a long time to get passed and the markets have gotten ahead of themselves. We may find the Fed unable to raise rates anytime soon. If unemployment keeps rising–recall that it has risen from 4.6% in November to 4.7% in December to 4.8% in January–then the Fed may find itself cutting interest rates before the year is over.”

Here is his full note explaining why he is bearish on the “most crowded trade in the world.”

Our views on the US Dollar.

In response to a reader letter, 13D founder Kiril Sokoloff explains our bearish take on “the most crowded trade in the world.

The following excerpt began as an email exchange between one of our clients, our chairman and founder, Kiril Sokoloff, and the global research team at 13D.

* * *

“As the outlook for the US dollar is so important to investment and business decisions, I would like to have a deeper understanding about views of 13D and Kiril on the US dollar in respect to the following:”

  1. Bearish views on the US dollar are mainly attributed to Trump’s determination to have a weaker dollar against its trading partners with trade surpluses (i.e. Euroland, Japan, China) through tough trade negotiations. Are there any other factors behind the bearish views on the US dollar?
  2. Does this mean that the pace of US rate hikes will be slow and the magnitude of rate hikes will be mild? Is it because Trump will revamp all relevant statistics including job numbers and GDP growth so that there would be room for the Fed not to raise rates? Or will the widening interest rate differentials between US and other major countries not have a material impact on the US dollar exchange rate?

Below are insights from Kiril and our analyst team regarding the US dollar:

The argument for a stronger dollar is that Trump’s economic policies will strengthen the US economy. First, if a border tax is passed on imported goods, it is widely believed to cause the US dollar to strengthen anywhere from 20 to 25%, which could offset some or all of the added tax on businesses. Second, part of the tax plan is to allow US multinationals to repatriate the roughly $2 trillion they have offshore. It is unsure whether this is already in US dollars or other currencies. To the extent it is not in US dollars, bringing the funds back will strengthen the US dollar. Third, in the early 1980s, when President Reagan cut tax rates and boosted fiscal deficits, the US dollar became very strong and many observers are looking at that to repeat itself.

As you know, the world is much different now than it was in the early 1980s. At that time, we had the highest interest rates in the history of capitalism. Now we have the lowest interest rates in 5,000 years. Also, debt levels are much higher now.

The case for a weaker dollar rests on what is the best way to improve the trade situation with those countries that generate huge trade surpluses against America. Imposing an import tax on those countries would clearly bring retaliation for US exports. So, while Paul Ryan’s plan of a border tax might sound good to academics and theorists, we wonder whether it will be enacted. Some Senate Republicans have expressed skepticism about the wisdom of a border tax, raising more doubt about its ultimate passage. This is a very important consideration.

Nevertheless, the key question is whether the Trump administration wants a weaker dollar to boost US exports. Given the fact that on a purchasing parity basis, the dollar is extremely overvalued versus the euro the yen and the British pound, it seems to us that the best strategy is to talk the dollar down.

Also, we do not believe the Fed will raise interest rates three times in 2017. The Fed is under great scrutiny by the Republicans in Congress and many of them want to take away the Fed’s independence. It is interesting to note that the many speeches that members of the Fed were making up to the election have dropped dramatically as they realize it is in their best interest to stay quiet. (Interestingly, the Fed’s top financial regulator, Daniel Tarullo, unexpectedly submitted his resignation on Friday). Also, based on several factors, we think the Trump economic plan may take a long time to get passed and the markets have gotten ahead of themselves. We may find the Fed unable to raise rates anytime soon. If unemployment keeps rising–recall that it has risen from 4.6% in November to 4.7% in December to 4.8% in January–then the Fed may find itself cutting interest rates before the year is over.

As far as the euro goes everyone is bearish on it, and of course, it depends a lot on the French and German elections. With François Fillon likely out of the picture, we are now looking at Emmanuel Macron as an alternative to Marine Le Pen, who would be disastrous for the European Union and euro. When it comes to politics, it is very hard to make investment decisions because the electorate is very volatile in these times.

However, because of the universal bearishness on the euro and the crowded trade in the US dollar, we prefer to be long on the euro because everyone is on the other side of the trade. Furthermore, the recovery in European bank lending appears to be at a much earlier stage versus the US, which may help underpin a stronger euro. Already we are seeing that the EU economically is doing better than the US. And certainly, all the volatility that the Trump administration is creating cannot be good for US economic growth in the short-term.

Technical factors are another important consideration for the US dollar. For over a year, we have documented the many market reversals from deflation to inflation. The previous deflation market trends traded inversely to the dollar index. Unless the multi-decade inverse correlations no longer apply, the year-plus uptrends in the inflation-markets (many of which have advanced significantly) argue that the dollar is poised to decline.

Also, key long-term momentum indicators are now declining for USDJPY and USDEUR. These measures peaked over a year ago for the USD Index. Notably, “low-quality” currencies such as ZAR and BRL have appreciated strongly versus the dollar, which is an important clue that the dollar index is highly vulnerable to a sharp decline.

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