KOMMONSENTSJANE – NSA WHISTLEBLOWER – NSA SPIED ON CONGRESS, SUPREME COURT, AND TRUMP


The IC has everything on their data storage in Utah, so its best that you assume that everything you do electronic is public.

kommonsentsjane

NSA Whistleblower: NSA Spied On Congress, Supreme Court & Trump

 March 27, 2017

(Information Liberation) NSA whistleblower William Binney told Tucker Carlson on Friday that the NSA is spying on “all the members of the Supreme Court, the Joint Chiefs of Staff, Congress, both House and Senate, as well as the White House.”tucker

NSA Spied On Congress, Supreme Court & Trump 1 informationliberation.com

Binney, who served the NSA for 30 years before blowing the whistle on domestic spying in 2001, told Tucker he firmly believes that Trump was spied on.

“They’re taking in fundamentally the entire fiber network inside the United States and collecting all that data and storing it, in a program they call Stellar Wind,” Binney said.

“That’s the domestic collection of data on US citizens, US citizens to other US citizens,” he said. “Everything we’re doing, phone calls, emails and then financial transactions, credit cards, things like…

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“They ‘Buy The Dip’ Yet Again”: Global Stocks, US Futures Rebound; Dollar Rises Off 4 Month Lows


Tyler Durden's picture

European, Asian stocks have rebounded as investor anxiety over Trump economic policy and US tax reform eased following yesterday’s remarkable comeback in the US market. S&P futures point to a slightly higher open, with oil higher and the dollar rebounding off fout month lows. It is a relatively quiet day in the US with the economic calendar focusing on wholesale inventories, consumer confidence and the Case-Shiller index.

European and Asian equities rose and S&P 500 futures edged higher as investor bullishness returned after the failure of U.S. President Donald Trump’s health-care bill.  Hopes that the Trump administration will now prioritize tax reforms coupled with still-robust economic data and corporate earnings forecasts spurred some investors to look past creeping doubts about Trump’s ability to deliver on campaign promises.

According to Bloomberg, the resumption of demand for risk assets signals investors are still pinning hopes on Trump’s ability to push through tax cuts and regulatory changes, pledges that helped trigger a reflationary upswing in global markets after his election. “Bond and FX market participants’ reaction to the failure of the health-care bill has been to re-price Treasuries and the dollar under the assumption that President Trump has lost a little of his shine,” Kit Juckes, a London-based global strategist at Societe Generale SA, wrote in a note.

Equity market participants have taken a look at the lower yields and weaker dollar and decided that since absurdly low rates are the elixir that the equity bull market lives on, they might as ‘buy the dip’ yet again.”

Europe’s Stoxx 600 rose 0.4% helped by financials and pharmaceutical stocks. Futures on the S&P 500 rose 0.1 percent. The underlying gauge dropped 0.1 percent Monday, paring a loss of as much as 0.9 percent.

In FX, the dollar index against a basket of major currencies edged up 0.1 percent to 99.252, after plumbing a trough of 98.858 overnight, its lowest level since Nov. 11. “Risky asset markets have rebounded from yesterday’s opening low, supporting our view of the current market setback as a risk pause and not a turning point towards generally lower risk valuations,” analysts at Morgan Stanley said in a note to clients. Morgan Stanley said that given some of the savings that were to come from replacing Obamacare would be lost, the upcoming tax reform may turn out to be a smaller package or result in a higher fiscal deficit.

The dollar steadied after its worst week since Trump’s election after talk of more rises in Federal Reserve interest rates this year. “Clearly we shouldn’t forget we are going to see at least two more hikes by the Fed this year and that there is still the potential for the next one to be pulled forward to June,” said CIBC strategist Jeremy Stretch. Sterling edged up a notch, trading within a narrow range as Britain prepared to start formal divorce proceedings with the European Union on Wednesday.

Recent weakness in the dollar underpinned crude oil prices though persistent worries about oversupply kept gains in check. Prices for front-month Brent crude futures were up 0.6 percent. In the United States, WTI crude futures rose 0.7% .

Yields on 10-year TSYs were unchanged at 2.38% after falling three basis points on Monday. European bonds mostly rose, with 10-year German yields falling one basis point to 0.39 percent.

On today’s calenar, Fed Chair Yellen will make a speech on workforce development in low-income communities. Although it does not seem like she will address monetary policy, we will watch her speech for any clues about the Fed’s thinking. Otherwise, Tuesday looks set to be a very quiet day. In the US, the Conference Board Consumer Confidence index for March will probably rise further.

Bulletin Headline Summary from RanSquawk

  • A brighter spark for European equities today with much of the upside attributed to an unwind of yesterday’s flight to quality price action
  • The USD recovery has been a modest one this morning, with limited upside traction seen in USD/JPY as focus falls on EM amid ZAR softness
  • Looking ahead, highlights include potential comments from Fed’s Yellen, George, Kaplan & Powell and ECB’s Coeure

US Markets

  • S&P 500 futures up 0.1% to 2,340.50
  • STOXX Europe 600 up 0.3% to 376.11
  • MXAP up 0.8% to 148.71
  • MXAPJ up 0.6% to 480.79
  • Nikkei up 1.1% to 19,202.87
  • Topix up 1.3% to 1,544.83
  • Hang Seng Index up 0.6% to 24,345.87
  • Shanghai Composite down 0.4% to 3,252.95
  • Sensex up 0.6% to 29,399.95
  • Australia S&P/ASX 200 up 1.3% to 5,821.23
  • Kospi up 0.4% to 2,163.31
  • Brent Futures up 0.7% to $51.11/bbl
  • German 10Y yield fell 1.2 bps to 0.39%
  • Euro down 0.1% to 1.0850 per US$
  • Brent Futures up 0.7% to $51.11/bbl
  • Italian 10Y yield fell 2.7 bps to 2.197%
  • Spanish 10Y yield fell 0.5 bps to 1.683%
  • Gold spot down 0.1% to $1,253.74
  • U.S. Dollar Index up 0.1% to 99.29

Top Overnight News

  • Amazon Wins Battle to Buy Middle East E-Commerce Firm Souq.com
  • Trump to Kill Suite of Obama-era Climate Change Policies
  • Akzo Pledges Plan for Profitable Split to Repel PPG Takeover
  • Credit Suisse Progress Buys Swiss Bank Room on Capital
  • Ericsson Sees Up to $1.7 Billion in Costs as Revamp Begins
  • Engie Aims to Fill U.S. Power and Gas Trading Gap Left by Banks
  • American Air to Invest $200 Million in China Southern Deal
  • Manhattan Landlords Turn to Retailer Giveaways as Stores Go Dark
  • Brookfield Finds Solar ‘Entry Point’ After SunEdison’s Collapse
  • Dakota Access Oil Line Outlasts Protests, Readies for Service
  • Huntsman Sees Venator Spinoff on Time Despite Damaged Ti02 Plant

Asian market sentiment improved as the region’s major indices shrugged-off the subdued Wall Street lead and traded mostly positive. ASX 200 (+1.1%) outperformed with the index led by financial and energy sectors, while Nikkei 225 (+1.1%) was underpinned as exporters found early respite from the recent JPY advances and with participants noted be on the bid ahead of ex-dividend dates. China traded mixed as the Hang Seng (+0.5%) conformed to the upbeat tone seen in its major regional counterparts, while Shanghai Comp. (-0.4%) lagged after the PBoC refrained from open market operations for the 3rd consecutive session, which resulted in a daily net liquidity drain of CNY 70bIn. 10yr JGBs traded slightly lower with demand dampened amid an improvement in risk sentiment and also following the enhanced liquidity JGB auction which saw weaker demand than the prior. PBoC refrained from open markets operations for a 3rd consecutive session, for a daily net drain of CNY 70bIn.

Top Asian News

  • Didi Said to Be Weighing $6 Billion SoftBank-Backed Funding
  • Malaysia Central Bank Sees March Inflation Exceeding 8-Year High
  • Unreachable Huishan Executive Exposes China Debt Woes, Bank Risk
  • Philippine Central Bank Chief Says Successor Must Be Named Soon

Europe likewise has seen a brighter spark for equities with much of the upside attributed to an unwind of yesterday’s flight to quality price action. The reprieve in commodity prices has seen energy and material names among the best performers. However, market moves have been somewhat contained ahead of the invoking of A.50 tomorrow. Of note, Members of the Scottish Parliament are to vote on giving First Minister Sturgeon authority to call a second independent referendum. In credit markets, French opinion polls keep OATs afloat with polls showing Macron would ease to victory ahead of Le Pen. In turn, this has alleviated concerns of the French political risk, subsequently narrowing the GE-FR spread (currently 57.5bps).This has also accounted for 2yr German Schatz yields rising, although the upside will likely be capped given the ongoing collateral squeeze as we approach month-end and financial year-end, the Schatz also saw a particularly soft auction today, which was technically uncovered (1.1) and saw a retention of 27.75%.

Top European News

  • Tesco to Pay $269 Million Over U.K. Accounting Scandal
  • U.K. Businesses Prepare Brexit Wish Lists as EU Talks Commence
  • Le Pen 25%, Macron 24%, Fillon 18% in 1st Round: Ipsos Poll
  • Dufry Rallies After Report China’s HNA May Buy Stake in Retailer

In currencies, the rand slid 1.9 percent to 12.98 against the dollar at 10:38 a.m. in London following Monday’s 2.5 percent decline. Prior to this drop, the currency had gained 9.5 percent year-to-date, making it a top emerging-market performer. The British pound climbed 0.2 percent to 1.2581. The Bloomberg Dollar Spot Index rose 0.1 percent after dropping 0.4 percent Monday. The USD recovery has been a modest one this morning, with limited upside traction seen in USD/JPY. Gains have extended to a little over 110.80, but with the market waiting for the next move from the Trump administration,
Treasuries find some near term support. The key 10yr rate is holding off 2.40%, and is only 3-4 bps higher from EUR/USD has pulled back off the 1.0900 level, and the market may sense the response to the policy shift at the ECB is now adjusted for. This is not to preclude a move on 1.0950 or 1.1000, but with French election fever hotting up from next week, gains may prove tough. Similar price action seen in GBP today as we saw Monday, though Cable gains towards 1.2600 are struggling amid modest USD buying. EUR/GBP continues to press for 0.8600-10 on the downside, the support here is likely to be aided by the familiar month end flow from Europe. Article 50 set to be triggered tomorrow, and even though this looks priced in, we cannot account for the subsequent rhetoric from Europe which may or may note add some colour to the negotiations which lie ahead.

In commodities, gold fell 0.1 percent at $1,253.50 an ounce after rising 0.9 percent Monday. West Texas Intermediate crude rose 0.8 percent at $48.11 per barrel following a 0.5 percent drop the previous day. As the USD recovers on the modest drop off in Treasuries, precious metals have come back off better levels, but not to any notable degree. The tenuous recovery in risk assets is largely behind this, as the market awaits the next move from the Trump administration — on tax reform. Gold still above USD1250.00, silver USD18.00. In contrast, base metals have recovered, though perhaps unconvincingly as yet — for the same reasons as above. Iron ore prices have come under pressure from Chinese stockpiles also, and this naturally impacts across the board. Copper is tentatively back above USD2.60. Oil prices also stabilise, with further comments — from Iran — that an extension to the production cuts agreed to late last year is on the table. Inventory levels and prospective shale production continues to counterbalance any relief rally. Iranian oil minister says that extending the OPEC and non-OPEC deal is likely but time is required in order to evaluate the decision.

Looking at the day ahead, the early data is the advance goods trade balance reading for February and the preliminary wholesale inventories data for February. Following that we’ll get the S&P/Case- Shiller house price index print in January before we then get the March consumer confidence print (expected to nudge down to 114.0 from 114.8) and Richmond Fed manufacturing survey. Away from the data it is a busy day for  Fedspeak. The Fed’s George speaks this afternoon at 12.45pm before Fed Chair Yellen speaks shortly after at 12.50pm. The Chair is however scheduled to speak on workforce development challenges so there is little suggestion that she will touch on monetary policy. Also due up today is Kaplan at 1pm and Powell at 4.30pm. The other potentially interesting event today is the  Scottish Parliament debate on a independence referendum.

US Event Calendar

  • 8:30am: Advance Goods Trade Balance, est. $66.4b deficit, prior $69.2b deficit, revised $68.8b deficit
  • 8:30am: Wholesale Inventories MoM, est. 0.2%, prior -0.2%; Retail Inventories MoM, prior 0.8%
  • 9am: S&P CoreLogic CS 20-City YoY NSA, est. 5.6%, prior 5.58%
  • 10am: Conf. Board Consumer Confidence, est. 114, prior 114.8; Present Situation, prior 133.4; Expectations, prior 102.4
  • 10am: Richmond Fed Manufact. Index, est. 15, prior 17

Central Banks

  • 12:45pm: Fed’s George Speaks in Midwest City, OK
  • 12:50pm: Fed Chair Janet Yellen Speaks
  • 1pm: Fed’s Kaplan Speaks in Dallas
  • 4:30pm: Fed Governor Jerome Powell Speaks

* * *

DB’s Jim Reid concludes the overnight wrap

After a bad start to the US session it felt like the market had its own sugar hit as the day wore on yesterday. Indeed whether you’re shocked at the fact that the S&P 500 only fell -0.10% yesterday (after being as low as -0.94% intra-day) perhaps depends on how much you think Trump’s most radical policies were priced into markets. There is an argument for saying that such trades weren’t actually priced in much anyway. The examples discussed yesterday within DB were that the 1) Fed funds market pricing are well below the FOMC dots; 2) the Dollar index is now back to where it was at the end of October; 3) the S&P 500 has been performing similarly to how it normally does after a close election even if there was a small pop up in February; and 4) that global PMIs are all consistent with where equities should be given the recent strength – a point we’ve made in previous EMRs. What we don’t know though is if some of the strong survey data contains some element of animal spirits only there because of Trump optimism. The fact that global numbers have been strong perhaps indicates that a lot of the optimism is in fact a global story and not a Trump one. So unless the global story turns then the healthcare debacle shouldn’t be too big a hit. Having said that, failure in the tax reform agenda will surely have more impact on animal spirits given its economic importance. So all to play for even if on some measures little obvious indication of success is priced in.

In markets the leader of the big selloff at the US open yesterday were Banks which tumbled over -2.50% within the first 10 minutes or so of trading. In doing so that meant US Banks briefly entered correction territory after plummeting -10.70% from the early month highs. After that, like the broader index, the sector bounced back impressively into the close and although finished a shade in the red by the end of play at -0.37% still recouped over 2% of the early losses. That move also came in the face of another day of tumbling Treasury yields with the 10y finishing the day 3.4bps lower at 2.379%. That is the lowest closing yield now since February 27th although yields did briefly dip below 2.350% at one stage yesterday. It’s worth noting that Chicago Fed President Charles Evans said yesterday that he sees the possibility of the Fed only hiking one more time this year should uncertainty continue to linger around the outlook for inflation and government spending.

The excitement for volatility also peaked fairly early in the day yesterday after the VIX touched an intraday high of 15.11 and the highest since November, before then settling back to finish at 12.50 and down over 3% on the day. Meanwhile Gold (+0.91%) found a bid amongst the risk-off moves and in doing so has now rebounded nearly 5% from the early month lows. Elsewhere metals had a day to forget with Copper (-0.76%), Aluminium (-0.46%) and Iron Ore (-4.10%) all down, while in FX the Greenback retreated -0.46% although as we noted above is back to pretty much where it was in October last year. It’s worth noting that the biggest mover in currencies yesterday was the South African Rand which tumbled -2.57% following the news that President Zuma ordered Finance Minister Gordhan to return home early from investor meetings in the UK and US. While there was no reason provided much of the chatter was that Zuma is preparing for an imminent cabinet reshuffle, raising uncertainty further around what is already a fragile situation.

As we refresh our screens this morning it appears that the positive momentum which saw Wall Street pare early losses has continued into Asia. The Nikkei (+1.07%), Hang Seng (+0.52%), Kospi (+0.28%) and ASX (+1.12%) are amongst the bourses higher while markets in China are largely flat. US equity index futures are also up about +0.20% while Gold has eased back a touch and rates markets are generally holding in around yesterday’s levels.

Moving on. Yesterday we saw the latest ECB CSPP numbers where the average daily rate of purchases of €308mn last week was the lowest outside of the summer and Xmas lull (average since start of €365mn). One week’s numbers do not make a trend but with the ECB tapering as of next week there will be some speculation that they are preparing to lower purchases. We’ll know in two weeks when the first week of April numbers are in. These will be important in working out the direction of spreads as this will give us an idea of whether they are planning tapering credit purchases as well as Governments. At the moment I would say the consensus is that they taper credit less.

The rest of the data yesterday was a little less exciting. In Germany the IFO survey surprised to the upside after the headline business climate reading rose 1.2pts in March to 112.3. Expectations had been for no change. The details also revealed a relatively equal contribution from both the expectations (+1.5pts to 105.7) and current assessment (+0.9pts to 119.3) components. Our economists in Germany made the point that the survey corroborates the strength of the PMI’s heading into Q2 and that both indices point to about 0.7% qoq GDP growth in Q1. The hard data continues to tell a different story though and the February hard data points will be important to gauge when and how this divergence will be resolved. Meanwhile the other data out in Europe yesterday was the ECB’s money and credit aggregates for February. M3 money supply growth was reported as slowing slightly to +4.7% yoy from +4.8% and as a result roughly staying in the range of the last couple of years. The credit side of the numbers also saw some retreat following strong January data. Banks lending to households slowed while lending to corporates saw its slowest pace in 5 months with the annual growth of corporate lending retreating to +2.0% yoy from +2.3%. Markets in Europe largely ignored the data yesterday and instead followed much of the lead from across the pond with the Stoxx 600 closing -0.40% but paring early heavier losses. In the US yesterday the sole release was the Dallas Fed’s manufacturing survey which was reported as falling 7.6pts in March to 16.9 (vs. 22.0 expected).

Looking at the day ahead, this morning in Europe it’s a particularly quiet start with no notable data due out, although we will hear from a couple of ECB speakers in Coeure and Makuch. Over in the US this afternoon the early data is the advance goods trade balance reading for February and the preliminary wholesale inventories data for February. Following that we’ll get the S&P/Case- Shiller house price index print in January before we then get the March consumer confidence print (expected to nudge down to 114.0 from 114.8) and Richmond Fed manufacturing survey. Away from the data it is a busy day for  Fedspeak. The Fed’s George speaks this afternoon at 4.45pm GMT before Fed Chair Yellen speaks shortly after at 4.50pm GMT. The Chair is however scheduled to speak on workforce development challenges so there is little suggestion that she will touch on monetary policy. Also due up today is Kaplan at 5pm GMT and Powell at 8.30pm GMT. The other potentially interesting event today is the  Scottish Parliament debate on a independence referendum.

ECB under Pressure to Reverse Direction


yellen-draghi

The European Central Bank (ECB) is coming under fresh pressure to increase interest rates, not merely from the standpoint that the Federal Reserve has been doing since the turn in our Economic Confidence Model 2015.75, when the first rate hike took place in December 2015. While there was little immediate reaction to the Fed’s decision to raise rates once again, Mario Draghi is struggling to explain his failed policy of negative rates that have utterly failed to reverse the downward pressure in the economy of Europe since 2008.

russia-capital-flows-10-13-2016

 

Euro outflows 2016

The latest data coming from the ECB and Eurostat is causing Draghi sleepless nights and cold sweats. Non-euro area investors have been net sellers of Eurozone debt securities in 2016 for the first time since the introduction of the euro. The total net outflows of investment capital from the Eurozone debt securities amounted to €192 billion in 2016, up from €30 billion in purchases during 2015. Once the ECM turned October 1st, 2015 (2015.75), indeed everything in global capital flows shifted right on time.

ECM-1970-2084

The bulk of the net sales have been government debt securities totaling €116 billion. Our model, on the other hand, has been forecasting the shift away from government debt to private sector assets. The latest data from Eurostat confirms that that forecast was also correct. The non-euro area investors remained net purchasers of only Eurozone equities, but that did decline by about 50% to from €268 billion in 2015 to €126 billion in 2016.

Occam’s Razor – If You Listen To Every Nunes Public Statement in Sequence…


Source: Occam’s Razor – If You Listen To Every Nunes Public Statement in Sequence…

The Case Against FBI Director Comey Grows – Intel Committee Chair Devin Nunes Explains Need for White House SCIF Visit…


Source: The Case Against FBI Director Comey Grows – Intel Committee Chair Devin Nunes Explains Need for White House SCIF Visit…

RyanCare Failure Means Trump Wins BIGLY – What Fake News Won’t Report | Mike Cernovich Periscope


Published on Mar 24, 2017

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Why 60 Minutes Failed: Fake News Narrative Exposed


Published on Mar 27, 2017

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On Sunday March 26th, 2016, 60 Minutes did a highly rated expose on Fake News: “The phrase ‘fake news’ has been used by Trump to discredit responsible reporting that he dislikes. But 60 Minutes’ investigation looks at truly fake news created by con-artists.”

While examining websites which create admittedly fictional hoax stories and Russian bots which can inflate social media statistics – Scott Pelley took aim at lawyer Mike Cernovich, in a segment which only further demonstrated the mainstream media’s dishonesty.

Link: http://www.cbsnews.com/news/how-fake-…

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The Plight of Mall REITs Linked to Poor Retail Market


From Crush the Street, by Joshua Enomoto

It’s one of the great contradictions of the real economy. Despite soaring job growth and surprisingly robust sentiment, the retail market continues to underperform. Even more bizarre, U.S. consumer sentiment hit multi-year record highs recently. In fact, this confidence barometer has been on the rise since 2008. If so many people are that enthused about the economy, why don’t retailers and the retail market have anything to show for it?First off, a large spike occurred in the inflation expectation index between December of last year through the end of February. That would suggest that consumers are buying products “in bulk” to avoid what they anticipate is a rise in prices. It’s not such a far-fetched idea. Ever since the Great Recession when so many families’ savings were gutted, a cynical and survivalist mentality may have proliferated. The retail market would receive a temporary boost, but over the long-term, the trend would not last.In fact, that’s exactly what we’re seeing. The last three months registered strong nominal sales for several retailers. The problem is that the total revenue is being split and allocated towards different sectors like e-commerce — these are competitive channels that simply didn’t exist 20 years ago.

Major retailers now have to compete on two fronts — the online world, and the traditional brick-and-mortars. The former is growing by leaps and bounds at the expense of the latter. Because of this dramatic shift in consumer shopping behavior, multiple companies are forced to close their doors. Why have them open and incur steep overhead costs when you can make better sales online?

retail market, mall REITs

From a business perspective, it makes perfect sense. But as more companies wake up to this trend, the retail market risks fracturing. That’s because when the big shops close for good, they eliminate the foot traffic that was once there. This siphoning inevitably spells trouble for already embattled retail real estate investment trusts, or REITs.

Mall REITs control the vast properties occupied by major shopping centers and strip malls. For decades, business was good. Anybody that wanted anything in the pre-internet era had to go to a retail establishment, and retailers were willing to pay top dollar for prime real estate. Mall REITs were making money hand over fist.

But all that changed with e-commerce. Physical location no longer carried the magnitude of advantage it once did. As consumers began buying discretionary items through their computers, the brick-and-mortars fell below their break-even point. When they closed, they took the cash flow of mall REITs with them.

The initial closures were the mom-and-pops. But when the majors started collapsing, mall REITs suddenly found themselves in a sea of red ink. And that’s exactly why so many publicly-traded variants have fallen underwater. There’s no one to pick up the slack. Worse yet, in the retail market, nobody wants to.

Shell’s New Permian Play Profitable At $20 A Barrel


Tyler Durden's picture

Authored by Rakesh Upadhyay via OilPrice.com,

OPEC’s worries about the booming U.S. oil production have increased significantly with the big three oil companies’ interest in shale. Exxon Mobil Corp., Royal Dutch Shell Plc, and Chevron Corp., are planning $10 billion of investments in shale in 2017, a quantum jump compared to previous years. All the naysayers who doubted the longevity of the shale oil industry may have to modify their forecasts.

OPEC lost when they pumped at will as lower oil prices destroyed their finances, and now they are losing their hard-earned market share as a result of cutting production. Shell’s declaration that they can “make money in the Permian with oil at $40 a barrel, with new wells profitable at about $20 a barrel” is an indication that Shell is here to stay, whatever the price of oil.

The arrival of the big three oil companies with their loaded balance sheets is good news for the longevity of the shale industry.

The oil crash, which started in 2014, pushed more than 100 shale oil companies into bankruptcy, causing default on at least $70 billion of debt, according to The Economist. Even the ones that survived haven’t been very profitable, according to Bloomberg, which said that the top 60 listed E&P firms have “burned up cash for 34 of the last 40 quarters”.

Therefore, during the downturn, the smaller players had to slow down their operations, but this will not be the case with the big three.

“Big Oil is cash-flow positive, so they can take a longer-term view,’’ said Bryan Sheffield, the billionaire third-generation oilman who heads Parsley Energy Inc. “You’re going to see them investing more in shale,” reports Bloomberg.

The majors are attempting to further improve the economics of operation. Shell said that its cost per well has been reduced to $5.5 million, a 60 percent drop from 2013. Instead of drilling a single well per pad, which was the norm, Shell is now drilling five wells per pad, 20 feet apart, which saves money previously spent on moving rigs from site to site.

Shell is not the only one—Chevron expects its shale production to increase 30% every year for the next decade. Similarly, Exxon plans to allocate one-third of its drilling budget this year to shale, and it expects to quadruple its shale output by 2025.  

“The arrival of Big Oil is very significant for shale,” said Deborah Byers, U.S. energy leader at consultant Ernst & Young in Houston. “It marries a great geological resource with a very strong balance sheet.”

$30 billion has been spent on land acquisitions in the Permian basin since mid-2016, which is a favorite among oil companies.

Considering the new projects and the resurgent shale boom, Goldman Sachs expects oil output to increase by 1 million barrels a day year-on-year. The outcome is an oversupply in the next couple of years.

“2017-19 is likely to see the largest increase in mega projects’ production in history, as the record 2011-13 capex commitment yields fruit,” the U.S. investment bank said in a research note on Tuesday, reports Reuters.

The U.S. Energy Information Administration expects the U.S. oil production to top 10 million barrels by December 2018, a level only surpassed in October and November 1970.

OPEC is running out of options.

Modern Day Snake Oil – Is 2% Growth As Good As It Gets?


Tyler Durden's picture

Authored by Mike Shedlock via MishTalk.com,

There have been 11 recessions and 11 recoveries since 1949.

The current recovery is the slowest recovery since 1949 and closing in on the becoming longest.

Growth since the 2nd quarter of 2009 is a mere 2.1%. The Wall Street Journal asks Is Two Percent as Good as It Gets?

“The growth seen during the recovery might, for a while, be as good as it gets,” the Federal Reserve Bank of San Francisco’s John Fernald, Stanford University’s Robert Hall, Harvard University’s James Stock, and Princeton University’s Mark Watson said in a study to be presented among Brookings Papers on Economic Activity.

Inquiring minds may wish to download the Brookings’ report entitled Disappointing Recovery of Output After 2009 but I found it a waste of time.

Okun’s Law 

The report was mostly mathematical gibberish based on Okun’s Law.

Okun’s law (named after Arthur Melvin Okun, who proposed the relationship in 1962) is an empirically observed relationship between unemployment and losses in a country’s production. The “gap version” states that for every 1% increase in the unemployment rate, a country’s GDP will be roughly an additional 2% lower than its potential GDP. The “difference version” describes the relationship between quarterly changes in unemployment and quarterly changes in real GDP. The stability and usefulness of the law has been disputed.

Clearly, Okun’s Law is at least as useless as any widely believed economic law, which is to say totally useless.

The supporting paper consists of 90 pages of largely unintelligible garbage such as the following.

Commendable Effort

The Wall Street Journal managed to condense 90 pages of nonsense down to 2 pages of nonsense. That’s a highly commendable effort, and the best one could reasonably expect.

Here’s the conclusion: “The causes aren’t entirely clear.”

I searched the 90-page report for the worddebt“. Care to guess the number of hits? I bet you can: zero.

Modern Day Snake Oil

I was discussing economic indicators with Pater Tenebrarum at the Acting Man Blog a couple of days ago. He pinged me with the correct takeaway.

Economic forecasting is not a science, and it is actually not the task of economic science to make forecasts (contrary to what is commonly asserted). Forecasting is akin to the task of the historian. Mises called speculators “historians of the future”.

Economic laws only play a role insofar as they can be used as constraints for a forecast. The problem is that all these models simply look at the data of economic history, at statistical series that always turn tail “unexpectedly”, driven by human action.

All these mathematical models are complete humbug. It is modern-day snake oil.

Still, it’s pretty clear that the market cares nothing for top-down or bottom-up forecasts of economic activity…