Sep 08

Today’s News September 8, 2015

  • Dead Market Walking – Chinese Stock Trading Volume Collapses To 3 Year Lows

    With “selling” outlawed and anything but cheer-leading strocks higher subject to detainment, it appears the Chinese government has managed to undo 3 years of liberalization and financial deregulation in the space of a week. Futures trading volume on the CSI-300 (China’s S&P 500) which for a while in May became the most actively traded financial contract in the world (surpassing S&P 500 e-minis), has utterly collapsed in the last week – since the arrests and detainment of various brokerage executives – to its lowest levels in three years. As one local trader noted – Chinese index futures trading is dead.

     

    In May, CSI-200 Futures were the most actiuvely traded financial instrument in the world – topping S&P e-minis…

     

     

    But that has all collapsed now to its lowest levels inm 3 years…

     

    in the space of just over a week…

     

     

    Re-capitalize your zombified over-leveraged SOEs now!!

    Charts: Bloomberg

  • What Will It Take To Set Off Your Alarm Bells?

    Submitted by Tom Chatham via Project Chesapeake,

    What does it take to make you sit up and take notice of the problems surrounding society today? What will it take to make you respond to the many crises taking place today? You have eyes so you can see and ears so you can hear but for many people any negative news is a reason to tune out the world and only think good thoughts.

    The problems we face continue to pile up and doing nothing is not an option if you expect to survive the next few years in tact. Prior planning and execution of a plan is now required to stay out of the flood zone when the dam breaks and everyone starts to drown. It does not matter what kind of person you are. You have to be able to save yourself before you have the ability to help others including your own family.

    You cannot protect your family if you cannot protect yourself from dangerous situations or people. You cannot protect your family if you are too weak from lack of water or food to get others to safety. You cannot protect your family from the elements if you have no cover for them due to sudden loss of your shelter.

    You have car insurance just in case you have an automobile accident. You have health insurance just in case you get sick. You have life insurance to help your family just in case you die. You have homeowners insurance just in case your home is destroyed. There is unemployment insurance just in case you lose your job.

    So where is your food insurance just in case you cannot find any food in the store? Where is your personal protection insurance just in case you are threatened and cannot depend on the police? Where is your water insurance just in case your water supply is shut off or becomes contaminated? Where is your communication insurance just in case the power is out and normal systems do not work? Where is your energy insurance just in case energy supplies are cut off and you need to drive to safety, cook your food or stay warm?

    People think that the types of insurance for cars, health, home and life are just fine to have but the other ones listed are crazy and paranoid to think about. Even in the first case, your insurance policies depend on other people to fulfill them and those people depend on a system that is still functioning such as the banks, communications and the insurance company itself. So what happens to all those other types of insurance when the insurers themselves are no longer functioning. Any crisis that takes down the stock market, power grid or the banks will also take down all of the insurance companies.

    The events of the past few weeks should have been a warning shot across the bow for many. Our financial and distribution systems are in a delicate balancing act right now and any sudden shifts could send them tumbling off the cliff rendering the services they perform extinct in a matter of hours. When that happens it will be too late to think about what you should have done when you still had the opportunity.

    You cannot get your money out of the bank after the doors are shut, the ATM is empty and the POS systems are no longer working. You cannot get the food you need after the stores have been cleaned out and the distribution system has stopped functioning. You cannot get fuel for your car after the gas stations are empty and deliveries have been suspended. You cannot get police help when everyone calls 911 at the same time and most of the police have gone home to protect their own families.

    If your alarm bells have not gone off already what will it take for you to realize you are in serious trouble? When that finally happens what do you plan to do to protect and care for your family? Having no plan means having a plan to suffer and persist through unpleasant situations for no good reason. Not knowing something is excusable but you have been warned many times in the past few years and to have to suffer in the future because you did not know what was coming is no longer an excuse. Failure to prepare at this time will not only cost you but it will likely put an unnecessary burden on those that will have to help you in the future.

    The warnings continue to go out. The situation continues to deteriorate. The mass of humanity continues to go about its normal daily business. The Earth continues to rotate with no chance of going back from here. The early warning alarms have sounded advising people to take a defensive stance just in case. Do you hear the alarms yet or have you hit the snooze button for a few more minutes of sleep?

  • Chinese Stocks Extend Losses As PBOC Weakens Yuan First Time A Week

    Following Monday's roller coaster of manipulated market machinations, perhaps China's leadership will keep its mouth shut tonight and just "monitor" the situation. Japan's opening 300-point flash-smash has now been eviscerated back to unchanged, Chinese stocks look set to open lower as Margin debt rose for the first time in 13 days (likely thanks to CSRC telling retail investors to "come back in, the water's fine.") As markets anxiously await China's trade data – which will either confirm the collapse or confirm the manipulation (given the utter devastation in Taiwan and South Korea trade data), the PBOC fixes Yuan weaker after 5 straight days of stronger fixes and injected another CNY150 billion in 7-day rev repo.

     

    A reminder of yesterday's farce…

     

    And as a reminder, it looks like tomorrow will be the day for Shanghai Composite to trigger its death cross, following CSI-300 signal yesterday.

    And tonight is notholding up well…

    • *MSCI ASIA PACIFIC INDEX ERASES GAIN, IS LITTLE CHANGED
    • *CHINA CSI 300 STOCK-INDEX FUTURES EXTEND LOSSES, FALL 1%

     

    Margin debt rose for the first time in 13 days – by the most in a month…

     

    After 5 straight days of stronger fixes – the biggest 5-day jump in Yuan since Sept 2010:

    • *CHINA SETS YUAN REFERENCE RATE AT 6.3639 AGAINST U.S. DOLLAR
    • *PBOC WEAKENS YUAN REFERENCE RATE FOR FIRST TIME IN SIX DAYS

    Just for context, this leaves Yuan a mere 4% weaker than pre-Devaluation – not exactly "war"

    And time for some more liquidity:

    • *PBOC TO INJECT 150B YUAN WITH 7-DAY REVERSE REPOS: TRADER

    It appears that fiscal policy is warming up…

    Xinhua reports that National Development and Reform Commission (NDRC) has approved six highway and bridge projects worth a total investment of CNY77.47 billion

     

    Says Beijing is speeding up the approval of infrastructure investment projects to stem the slowdown in economic growth.

     

    And with South Korea's monetary policy decision looming, this will not help the race to the bottom…

    • *S. KOREA ECONOMY FACES UNCERTAINTIES FROM CHINA, FED

     

    Charts: Bloomberg

  • In Bed With The Despotic House Of Saud

    Submitted by Paul Pillar via ConsortiumNews.com,

    The U.S.-Saudi alliance is no longer just an anachronism. It has become a dangerous anachronism with the Saudis implicating the United States in their brutal sectarian conflicts, such as the wars in Yemen and Syria, and in their reactionary human rights policies, as ex-CIA analyst Paul R. Pillar explains.

    Saudi King Salman visits Washington amid disagreement between the United States and Saudi Arabia on a broad range of issues. Moreover, the disagreements are rooted in fundamental characteristics of the anachronistic Saudi regime.

    Many regimes around the world, and the political and social systems of which they are a part, are markedly different from what is found in the United States, but the Saudi polity is one of the most different. The anachronism that is Saudi Arabia represents a major problem for U.S. foreign policy, both because of the impact Saudi-related matters have on the Middle East and beyond and because of the close association between Saudi Arabia and the United States that has come to be taken for granted.

    King Salman the President and First Lady to a reception room at Erga Palace during a state visit to Saudi Arabia on Jan. 27, 2015. (Official White House Photo by Pete Souza)

    Little of this has anything to do with the just-completed agreement to restrict Iran’s nuclear program, despite the attention that subject has been receiving. Riyadh is more likely to accept the agreement as a done deal — and already has publicly indicated its formal acceptance — than the accord’s opponents in the United States and Israel.

    The Saudis will continue to look for ways to discourage others, including the United States, from developing warm relations with their rival across the Persian Gulf, but this will not preclude the Saudis themselves, along with the other Gulf Arabs, from undertaking their own rapprochement with Tehran, just as they have done in the past.

    In hot spot after hot spot in the Middle East, U.S. and Saudi objectives and priorities diverge, even if in some loose sense they are considered to be on the same side. In war-torn Syria, the United States and Saudi Arabia have never agreed on whether the ouster of the Assad regime or the containment of ISIS should be the main objective.

    Saudi priorities are based on a variety of considerations that are specific to it and not to the United States, including hatred of the Assads for whatever role they may have played in the assassination of Lebanese prime minister Rafic Hariri, a special friend of the Saudis. Reflecting the different priorities and objectives is disagreement over selection and vetting of Syrian rebels to be deemed worthy of support.

    In Iraq, Saudi priorities are influenced by some of the same sectarian motives that shape Saudi policy toward Syria. And again, such motives are quite different from U.S. interests. Desired overthrow of the regime is not the factor that it is in Syria, but distrust of the Shiite-dominated government in Baghdad is a major part of the Saudi approach toward Iraq.

    In Yemen, the United States has allowed itself to become associated with a destructive and misguided Saudi military expedition, and thus also with the humanitarian tragedy that the operation has entailed. The main Saudi objective is to show who’s boss on the Arabian Peninsula, another objective not shared with the United States. Saudi Arabia’s operation has shown itself, more so than Iran, to be a destabilizing force intent on throwing its weight around in the neighborhood.

    In his most recent column Tom Friedman identifies what may be the most worrisome thing about Saudi Arabia for U.S. interests: “the billions and billions of dollars the Saudis have invested since the 1970s into wiping out the pluralism of Islam — the Sufi, moderate Sunni and Shiite versions — and imposing in its place the puritanical, anti-modern, anti-women, anti-Western, anti-pluralistic Wahhabi Salafist brand of Islam promoted by the Saudi religious establishment.”

    Friedman notes that Islamist extremist groups that the United States has come to consider preeminent security concerns, including Al Qaeda and now ISIS, “are the ideological offspring of the Wahhabism injected by Saudi Arabia into mosques and madrasas from Morocco to Pakistan to Indonesia.”

    The specific terrorist consequences of what the Saudis have done is justifiably an immediate concern for U.S. policy-makers. But the underlying bargain that Ibn Saud, the founder of the current Saudi kingdom, reached years ago with the Wahhabis also underlies much else that makes Saudi Arabia what it is today, and makes it the problem that it is. The kingdom’s troublesome characteristics are inextricably linked to how Ibn Saud’s offspring are trying to claim legitimacy and thus to cling to power.

    Consider some of the chief characteristics of the kingdom. Saudi Arabia is a family-run enterprise in which the distribution and exercise of political power are every bit as medieval as they ever were in any country ruled by the Plantagenets. There is no religious freedom. Human rights in many other respects are sorely lacking. Women are still subordinated. It was considered a big deal when they recently were told they could vote and run as candidates — in elections to local councils with scant power and in which the king will still appoint half the members — but women still cannot function as independent persons in many aspects of daily life. They still are not allowed to drive.

    It ought to be astounding that a place this far removed from the liberal democratic values with which the United States likes to be associated, even without considering the aforementioned divergence of objectives elsewhere in the region, still is considered a close partner of the United States. The usual, and to a large degree valid, explanation is that, as Friedman puts it, “we’re addicted to their oil and addicts never tell the truth to their pushers.”

    But there is another American attitude involved, which persists even in the shale-fracking era. Once a nation is considered a partner or ally in a region that is perceptually divided into allies and adversaries, the perceived line-up tends to stay fixed until and unless there is a political alteration sufficiently great to be labeled regime change.

    And regime change would be the most troubling chapter of all in the Saudi story. Some Saudi leaders, including the late King Abdullah, seem to have recognized the need to move in the direction of modernization and liberalization, even if only at the glacial pace that is possible in a Wahhabi-committed family enterprise.

    It is an open question whether the regime will be able to keep this kind of change ahead of demands for change of a more drastic and radical sort. If it fails to do so, and the revolution comes, then the association of the United States with the ancien régime will an even greater problem for U.S. policy-makers than what they face now.

  • Happy "$15 Minimum Wage" Labor Day From McDonalds

    Coming to, or rather from, every forced “minimum wage” provider near you. And don’t forget to thank your micromanaging, centrally-planning government.

    h/t @TopherCarlton

  • 33 Fascinating Facts On U.S. Currency

    The United States Bureau of Engraving and Printing makes approximately $696 million in currency each day. Amazingly, according to their very fitting website MoneyFactory.gov, in the fiscal year of 2014 they printed over $2.2 billion in $1 bills alone. It’s good practice, because with concerns of deflation circulating around Europe and Asia, the Feds may want to put the printing presses into overdrive.

     

    Courtesy of: Visual Capitalist

  • Japan's Nikkei Flash-Smashes 400 Points Higher In Milliseconds After Abenomics Gets Three-Year Extension

    Whether it is due to thin holiday liquidity, due to the BOJ intervening just ahead of its usual time, because Japan’s “legendary” Twitter trader “CIS” just went bullish (again), because prime minister Abe just learned he would be reinstalled as head of his ruling LDP party because no challenger had emerged unleashing three more years of unchallenged Abenomics, because Japan’s Q2 GDP was just revised modestly higher (to a less negative number) or just because this is how the New Normal rolls, moments ago the Nikkei flash smashed higher some 400 points higher, in a well-choreographed algorithmic frenzy, to take out Friday’s high stops.

     

    Perhaps this latest ridiculous move was predicated by the USDJPY momentum ignition which today came 30 minutes ahead of its usual time…

    … or by some of the economic data is neither relevant nor worth digging into. In this “market” things just happen…

    Speaking of the economic data, this is what Japan reported: instead of a -1.8% drop in Q2 GDP, Japan – like the US – revised the number higher to “only” -1.2% (versus the initial -1.6% report) with the real sequential decline of -0.3% fractionally better than -0.5%, even as nominal GDP posted the smallest possible sequential gain.

    Additionally, Japan reported that its July Current Account balance was higher than the JPY1.732 trillion expected, and rose to JPY1.809 trillion, up from JPY 559 billion in June.

    Perhaps the catalyst was the report that Prime Minister Shinzo Abe has returned as president of the ruling Liberal Democratic Party on Tuesday, as rival Seiko Noda failed to garner signatures of support from 20 LDP Diet members, a requirement to file a candidacy for the Sept. 20 election. According to the Japan Times  the deadline for filing the candidacy was set at 8:30 a.m. Tuesday, but Noda held a news conference to tell reporters that she gave up running prior to that the same day.

    In other words, Abe’s new term as LDP president continues for another three years, which means his term as the prime minister will be extended for that period as well, assuming the increasingly jerky Nikkei – the only thing that has allowed Abe to keep his position as long he has – does not crash in the interim.

    As a result, Abe is on course to become Japan’s longest-serving prime minister in more than four decades after standing unopposed in his party’s latest leadership election.

    Abe’s re-selection Tuesday as president of the Liberal Democratic Party comes as protests flare over unpopular legislation to expand the role of the Japanese military; Abe isn’t required to hold a general election for another three years. If he stays in office until 2018, he would become the third-longest serving prime minister since World War II

    There is no term limits for the prime minister, but a general election of the Lower House will be held at least once in every four years, and a new prime minister will be elected each time by members of the chamber.

    “I tried to run for the presidential election, but I was unable to accomplish that,” Noda said. Noda continued her last-minute efforts to garner support from other LDP members but the LDP leadership led by Abe kept putting pressure on them not to support her.

    Top LDP executives feared that if Noda succeeded to run, it could trigger internal strife within the party and give ammunition to opposition parties to further delay deliberations on contentious government-sponsored security bills, which are now being deliberated on in the Upper House.

    And while Abe’s reign is now literally supreme and unopposed, Japan Times cautions that Abe’s ruling camp is now set to bulldoze the bills through the chamber and have the legislation enacted next week. This is expected to cause a big public stir and will likely push down the Cabinet’s approval rating in media polls.

    Whether that means more or less Abenomics, read printing of money to make the rich richer, remains to be seen. Recall on Friday the IMF joined the chorus of warnings that the BOJ’s QQE will soon need to be tapered as Kuroda runs out of willing sellers.

    Judging by today’s early market kneejerk reaction, the algos have not gotten the memo.

  • The Numbers Are In: China Dumps A Record $94 Billion In US Treasurys In One Month

    Shortly after the PBoC’s move to devalue the yuan, we noted with some alarm that it looked as though China may have drawn down its reserves by more than $100 billion in the space of just two weeks. That, we went on the point out, would represent a stunning increase over the previous pace of the country’s reserve draw down, which we began documenting months ahead of the devaluation (see here, for instance). We went on to estimate, based on the projected size of the RMB carry trade unwind, how large the FX reserve liquidation might need to be to offset capital outflows and finally, late last week, we suggested that China’s official FX reserve data was set to become the new risk-on/off trigger for nervous, erratic markets. In short, the pace at which Beijing is burning through its USD assets in defense of the yuan has serious implications not only for investors’ collective perception of market stability, but for yields on core paper, for global liquidity, and for US monetary policy. 

    On Monday we got the official data from China and sure enough, we find out that the PBoC liquidated around $94 billion in reserves during the month of August to $3.557 trillion (the lowest since September 2013)…

    … and as Goldman argues (see below), the “real” figure might have been closer to $115 billion. Whatever the case, it’s a staggering burn rate and needless to say, were the PBoC to continue to liquidate its assets at this pace, it would necessitate a raft of RRR cuts and hundreds of billions in short-term liquidity ops to ensure that money markets don’t seize up in the face of the liquidity drain.

    Here’s some commentary from across sellside desks on the official numbers:

    • From RBC’s Sue Trinh: 
      • China FX reserves suggest about $140b used to defend yuan in April once valuation is accounted for
      • Believes PBOC has been intervening to maintain the yuan’s stability since the devaluation, but this kind of intervention can’t continue indefinitely
      • It’s unsustainable in the long run; yuan is overvalued by around 15% by RBC’s latest estimate; still targeting USD/CNY at 6.56 by year-end and 6.95 by the end of 2016
    • From Commerzbank’s Zhou Hao:
      • Decline in foreign reserves clearly suggests China’s central bank intervened intensively in the FX market to stabilize CNY exchange rate
      • “One-off devaluation” in mid-Aug. triggered market expectations of further CNY deprecation, which has not only endangered the financial stability, but also posts a downside risk to the economy due to capital outflows
      • It’s costly because frequent intervention will burn foreign reserves rapidly and tighten the onshore market liquidity; that said, further tightening of regulations is expected near term
      • Expects spread between CNY and CNH is likely to persist as PBOC has become an active player in onshore market
    • From Goldman:
      • The People’s Bank of China (PBOC) reported that its foreign exchange reserves dropped by US$94bn in August, to US$3.557tn at the end of the month. However, it is not straightforward to derive the actual scale of FX reserves sales from the headline FX reserves data, given uncertain valuation effects and possible balance sheet management by the PBOC.
      • It is possible to get an approximate sense about valuation effects stemming from currency movement: e.g., assuming the currency composition of the PBOC’s FX reserves broadly follows that of the average country’s (using the IMF COFER weights, which suggest roughly 70% in USD for EM countries), the currency valuation effect would probably be positive to the tune of roughly US$20bn (i.e., if we only look at the change in headline FX reserves as a gauge of sales of FX reserves, sales of FX reserves might have been underestimated by around US$20bn, given the currency valuation effect). However, besides currency movements, there could also be significant valuation effects from changes to the market prices of the PBOC’s investment portfolios, and the direction and size of those effects is hard to measure given the uncertainty of the asset composition. Moreover, there could also be possible short-term transactions and agreements between the PBOC and banks that may complicate the interpretation of the change in FX reserves as an underlying measure of RMB demand.

    Of course the huge draw down was widely anticipated and indeed, we’ve explored and detailed virtually every angle of this story in the lead up to the data. The key takeaway here is that we now have official confirmation that August saw $94 billion in reverse QE (and more likely $115 billion) or, quantitative tightening as Deutsche Bank puts it. 

    We can, as we explained on Saturday, argue about what the ultimate effect on safe haven assets will be, but what’s not up for debate is that conceptually speaking, China’s massive UST dumping is the opposite of Western central bank QE and as such should be expected to pressure yields. More specifically, Citi has suggested that for every $500 billion in EM FX reserve liquidation, there’s an attendant 108 bps or so of upward pressure on 10Y yields. Similarly, Deutsche Bank, citing the extant literature, flags 50-60bps of upward pressure on 5Y yields for every $100 billion in monthly EM FX reserve liquidations. 

    The takeaway, as we put it last week, is that if the Fed hikes this month, it will be tightening into a tightening.

    But it’s not that simple. It’s also possible that, if China’s FX reserve draw downs do indeed end up serving as a trigger for risk-off behavior (i.e. a selloff in risk assets), the subsequent flight to safety could end up driving yields on long bonds lower, not higher. We discussed this in detail over the weekend. 

    Still, China isn’t the only country liquidating its USD assets. When you consider that global EM FX reserves amount to more than $7 trillion, it seems reasonable to ask whether the flight to safety that would invariably accompany a worldwide selloff in risk assets would be sufficient to replace the lost bid from massive reserve draw downs. Or, as we put it on Saturday, “the real question is what would everyone else do. If the other EMs join China in liquidating the combined $7.5 trillion in FX reserves (i.e., mostly US Trasurys but also those of Europe and Japan) shown below into an illiquid Treasury bond market where central banks already hold 30% or more of all 10 Year equivalents (the BOJ will own 60% by 2018), then it is debatable whether the mere outflow from stocks into bonds will offset the rate carnage.”

    And that consideration, in turn, puts the Fed in a very, very difficult spot. A rate hike cycle will put further pressure on already beleaguered EM currencies which raises the possibility that the FX reserve liquidation will be larger than the eventual safe haven flows and besides, there’s bound to be a lag between the liquidation of USD assets and the flight to safety and given the potential for extraordinary bouts of volatility in UST, JGB, and German Bund markets, it’s anyone’s guess what happens in between. 

    Whatever the case, something will have to give here. That is, all of these dynamics (i.e. a Fed hike, China’s massive UST dumping, an EM meltdown precipitating FX reserve drawdowns, illiquid markets for the same assets everyone is dumping, hemorrhaging petrostate budgets, etc.) simply cannot coexist for long without something snapping because, as we put it last week, in this very unstable arrangement, the smallest policy error will reverberate exponentially, and those reverberations can lead to only one thing: the Fed’s admission of policy failure by adopting a tightening bias, and ultimately launching another phase of monetary easing, be it QE4 or perhaps even the long-overdue and much anticipated Friedmanesque “helicopter money” episode.

  • Syria: Imperial Responsibility, Imperial Conscience

    Submitted by Charles Hugh-Smith of OfTwoMinds blog,

    Come on, America. We could better and should do better.

    I am not an unbiased observer of the Syrian refugee crisis, for we have a Syrian friend. She is a young woman, with legal residency in the U.S. She is completing her university studies in computer science. Her uncle served honorably in the U.S. Army for many years in theater (Iraq) and recently retired in California's Central Valley.

    Her brother is completing his medical studies and wants to practice medicine in the U.S.

    If you've been to a major hospital in the U.S. recently, you know that if all foreign-born doctors vanished, the current shortage of physicians would be much, much worse.

    This is to remind us all that not every immigrant or refugee is a terrorist or welfare recipient.

    We have a number of young Vietnamese-American friends who are the children of Boat People who fled Communist oppression after 1975. Those who were unable to escape often served years in re-education labor camps, i.e. concentration camps, for the heinous crime of working for the Americans during the American war in Vietnam.

    Hundreds of thousands of Vietnamese risked their lives and the predations of pirates as they attempted to reach freedom in overloaded leaky craft. Uncounted thousands lost their lives in the process.

    Today, it is self-evident that the Vietnamese-American community has paid back the help extended by the U.S. to those who bore the brunt of our Imperial meddling in Vietnam many times over.

    In 1975, the U.S. did not wait for the full catastrophe to strike before accepting tens of thousands of refugees. Tiny Wake Island, an atoll in the middle of the Pacific and home to a mere 251 U.S. military and civilian personnel at the time, processed 15,000 Vietnamese refugees. (Tens of thousands of others were processed through Subic Bay and Guam.)

    With the imminent fall of Saigon to North Vietnamese forces, President Gerald Ford ordered American forces to support Operation New Life, the evacuation of refugees from Vietnam. The original plans included Subic Bay and Guam as refugee processing centers but due to the high number of Vietnamese seeking evacuation, Wake Island was selected as an additional location.

     

    In March 1975, Island Commander Major Bruce R. Hoon was contacted by Pacific Air Forces (PACAF) and ordered to prepare Wake for its' new mission as a refugee processing center where Vietnamese evacuees could be medically screened, interviewed and then transported to the United States or to other resettlement countries. A 60-man civil engineering team was brought in to reopen boarded-up buildings and housing, two complete MASH units arrived to set up field hospitals and three Army field kitchens were deployed. A 60-man Security Police team, processing agents from the U.S. Immigration and Naturalization Service and various other administrative and support personnel were also on Wake. Potable water, food, medical supplies, clothing and other supplies were shipped in.

     

    On April 26, 1975, the first C-141 military transport aircraft carrying refugees arrived. The airlift to Wake continued at a rate of one C-141 every hour and 45 minutes, each aircraft with 283 refugees on board. At the peak of the mission, 8,700 Vietnamese refugees were on Wake.

     

    When the airlift ended on August 2, a total of about 15,000 refugees had been processed through Wake Island as part of Operation New Life.

    That, ladies and gentlemen, is how America once acted: with responsibility and conscience, not with tepid half-measures but with presidential orders that mobilized the U.S. government to alleviate the suffering of tens of thousands of people.

    If you want a taste of frenzied fear and hatred of immigrants, please refer to the response of native-born Americans to the flood of Irish immigrants in the 19th century. It was feared the nation could not survive the onslaught of poor Irish, who brought with them a full spectrum of destruction: drunk, prone to criminality, ready to use their fists at the drop of a hat, typically Catholic–the list of horrors appeared endless.

    Now might be the right moment to mention that I'm 38% Irish, and one branch of the family (Scots-Irish) immigrated to the U.S. in the Great Potato Famine. (As for rest of my mongrel mix: 37% Scots/English, 14% Viking, oops I mean Scandinavian, and 11% French, i.e. everything that mixed it up in France. Oh, and let's not forget the 2% Neanderthal buried in the mix… that 2% might have kept me in one piece after many an injury.)

    I wonder how many of the mealy-mouthed congress critters who oppose aiding Syrian refugees have relatives who arrived in the U.S. as immigrants or refugees (or slaves). Shall we hazard a guess that it's 100% if we set aside traces of Native American heritage?

    The hypocrisy is self-evident. That the U.S. has covertly supported the overthrow of the Assad regime in Syria is an open secret. That there are no American boots on the ground (at least officially) does not absolve the U.S. of partial responsibility for the refugee catastrophe unleashed by the Syrian war.

    Of an estimated 4 million Syrian refugees, the U.S. has accepted a mere 1,500. We're told Many Obstacles Are Seen to U.S. Taking in Large Number of Syrian Refugees. I am sure President Ford was told the same thing: it was "impossible" to absorb hundreds of thousands of Vietnamese refugees.

    Fortunately, President Ford (a Navy veteran himself) rejected both the defeatism and the implicit wish to wash our hands of any responsibility for our decisions and actions.

    Our friend has told us of her childhood visits to relatives in Old Damascus, one of the most ancient cities in the world. Rather than reprint photos of the horrific destruction that has been wrought on Syrian cities, I want to share a photo of Old Damascus by photographer Hasan Bryiez:

    According to our friend, a cosmopolitan mix of ethnicities and religious faiths co-existed peacefully in Old Damascus.

    Now that world is no more. The social order that enabled peaceful co-existence has been shredded by the war. Though Old Damascus may appear materially undamaged, it too has passed the point where the previous pluralism can be re-established.

    Syria: The Chaos of War:

    This is the bargain that Damascus and Syria made: live under an iron fist in exchange for a social safety net and a space for religious and cultural, if not political, pluralism. Then Syrians took peacefully to the streets in early 2011, claiming that a family mafia oppressed not only the Sunni majority but all citizens. The government responded with overwhelming force, and its opponents turned to arms.

    The war in Syria is being fought on multiple levels. One is the Great Game, the geopolitical chess game that I have often addressed: Oil, Empire and Playing the Great Game (October 1, 2014).

    It's clear that the goal of ridding the region of the Assad regime will eventually succeed; what is much less clear is what will be made of the torn battlefield.

    The U.S. has around 317 million residents. How much of a burden would 50,000 or 100,000 Syrian refugees place on a nation of 317 million, a nation that once airlifted supplies to West Berlin for over a year in defiance of a Soviet blockade, a nation that airlifted 15,000 refugees to a remote atoll in the Pacific in hundreds of C-141 sorties?

    Empire comes with responsibilities, and it should come with conscience. The U.S. is not a passive observer in Syria. Those of us outside the Deep State have no idea what's been done or supplied or promised in the name of the American people.

    Shall we accept 5% responsibility for events in Syria? That equates to 5% of 4 million refugees or 200,000 refugees.

    There are many Syrians already here who are willing to sponsor relatives and friends. There are Christian churches willing to sponsor refugees of any faith, because they seek to walk in the path of Jesus.

    There is no shortage of good will in the U.S., only a lack of political will. Sadly, we no longer have presidents or congresspeople who make the "impossible" happen to alleviate the suffering of civilians fleeing war zones.

    So every refugee has to be interviewed, screened, and possibly receive medical care. How could the U.S. do so for tens of thousands of Vietnamese refugees in a matter of months, yet now we are so crippled we can only manage to process 1,500 refugees from the Syrian war?

    Politico toadies who like to pin American flag buttons to their lapels while ignoring our Imperial responsibilities and the conscience that should go with it are beneath contempt.

    Come on, America. We could better and should do better. If we feel no obligation to the refugees from Syria, we owe it to those Americans who stepped up and did their part for refugees from wars past.

  • In Gold We Trust – 2015 Edition

    Monetary history, staggering mountains of debt, demographic problems, metrics relevant to the gold market, central bank debauchery and currency debasement in all their terrible glory, and even the beer price of gold – the latest Incrementum "In Gold We Trust"chartbook has it all…

     

     

     

    There has been an astonishing synchronization between equity markets and the gold-silver ratio until 2011. A rising stock market almost always coincided with a declining gold-silver ratio, i.e. with silver outperforming gold. This may have been due to re-inflation being accomplished with conventional monetary policy –  i.e., credit expansion by commercial banks – in previous cycles . This affected the real economy more quickly and fostered consumer price inflation. This time, re-inflation has been attempted by means of central bank securities purchases, which has led to price increases in investment assets, but has not been able to spur consumer price inflation.

     

     

     

    Full Chartbook below…

    Chartbook – In Gold We Trust 2015 & Status Quo

    h/t Acting-Man.com

  • Trump Surges Past "Almost Apologetic" Hillary As Presidential Front-Runner, Latest Poll Shows

    Despite the liberal media spinning Hillary's non-apology as bringing her closer to the American public, it appears her presidential campaign took another shot to the chest this weekend. Not only does Bernie Sanders keep rising in the polls, Republican presidential front-runner Donald Trump leads Hillary Clinton head-to-head, garnering 45% support versus 40% of his Democratic rival, according to a new national poll.

     

    As Press TV reports, while the popularity of Trump campaign increased through the summer, Clinton could not improve her image among likely voters over her lack of transparency and trustworthiness as former secretary of state.

    According to a CNN/ORC sampling of national voters conducted in late June, just days after Trump entered the competition, 59 percent backed Clinton as opposed to 34 percent who supported Trump in a head-to-head matchup.

    In July, the same polling organization put Clinton at 57 percent to Trump at 38 percent with another one in August showing Clinton with 52 percent support and Trump with 43 percent.

    The Survey USA poll shows that Trump has also beaten Senator Bernie Sanders (I-Vt.) by 44 percent to 40 percent; Vice President Joe Biden by 44 percent to 42 percent; and former Vice President Al Gore by 44 percent to 41 percent.

    And now, as The new poll, conducted by Survey USA, marks a significant turnaround in the polls.

    Republican presidential frontrunner Donald Trump leads Hillary Clinton head-to-head, garnering 45 percent support versus 40 percent of his Democratic rival.

     

    This comes as another survey revealed Thursday showed Trump has hit a new high in the race to the Republican presidential nomination. According to the survey by Monmouth University, the businessman now enjoys a 30 percent support nationally.

    As Doyle McManus writes in The LA Times,

    I talked with Republican wise men last week — sober establishment strategists who have seen many presidential campaigns come and go — to ask them how long the improbable popularity of Donald Trump can last. Reassure me, I said: He can't actually win, right?

     

    Their answers surprised me.

     

    "It's not inconceivable," Vin Weber, a former congressman (and Jeb Bush supporter) told me. "It doesn't look as if he's going to implode any time soon…. It's hard for me to say this, but he actually seems to be getting better as a candidate."

     

    "Trump has put himself on the short list of five or six names who could win the nomination," said another GOP operative who insisted on anonymity because he's working for one of those other candidates. "It's not impossible that he could win."

     

    Until a few weeks ago, the conventional wisdom held that Trump was merely a summer fling for angry voters, a protest candidate whose insults and braggadocio would soon impose a ceiling on his support. But recent polls suggest that Trump has raised that ceiling.

     

    …

     

    On balance, a Trump victory still appears unlikely; his conservative credentials are too weak, his political experience too thin. "I'm hearing people talk about him as if he were the inevitable nominee," Weber said. "We aren't there yet."

     

    But Republican Party's grandees are glumly acknowledging that America's love affair with Trump is more than a summer romance — maybe a lot more.

    *  *  *

  • The Danger Of Eliminating Cash

    Submitted by Alasdair Macleod via GoldMoney.com,

    In the early days of central banking, one primary objective of the new system was to take ownership of the public's gold, so that in a crisis the public would be unable to withdraw it.

     

    Gold was to be replaced by fiat cash which could be issued by the central bank at will. This removed from the public the power to bring a bank down by withdrawing their property. A primary, if unspoken, objective of modern central banking is to do the same with fiat cash itself.

    There are of course other reasons for this course of action. Governments insist that they need to be able to trace all private sector transactions to ensure that criminals do not pursue illegal activities outside the banking system, and that tax is not evaded. For the government, knowledge of everything individuals do is necessary control. However, in the monetary sense, anti-money laundering and tax evasion are not the principal concern. Central banks are fully aware that the financial system is fragile and could face a new crisis at any time. That's why cash in their view must be phased out.

    A gold run against a bank or banks, in the ordinary course of banking, is no longer a systemic threat, but the possibility that depositors might queue up to withdraw physical cash from a bank in which they have lost confidence is very real. Furthermore it is a public spectacle associated with monetary disorder of the most alarming sort. It is far better, from a central banker's point of view, to only permit the withdrawal of a deposit to be matched by a redeposit in another bank. That way, a bank run can be hidden through the money markets, with or without the intervention of the central bank, and the deflationary effects of cash hoarding are avoided.

    This is commonly understood by followers of monetary matters. What has not been addressed properly is how a cashless economy behaves in the event of a significant alteration in the public's preferences for money relative to goods. Normally, there is a balance in these matters, with the large majority of consumers unconcerned about the objective exchange-value of their money. There are a number of factors that can change this complacent view, but the one that concerns us for the purpose of this article is the speed at which the relationship between the expansion of money and credit and the prices of goods and services can change.

    There is no mechanical link between the two, but we can sensibly posit that the extra demand represented by an increase in the money quantity will eventually drive up prices, setting the conditions for a potential shift in public preferences for money, which would drive prices up even more. When the general public perceives that prices are rising and will continue to do so, people will buy in advance of their needs, increasing their preference for goods over holding money.

    This is currently desired by central bankers wishing to stimulate demand, but they are under the illusion it is a controllable process. Furthermore, increases in the money quantity are being driven by factors not under the direct control of monetary authorities. Welfare states are themselves insolvent and require the issuance of money and low-interest credit to balance their books. Commercial banks can only continue in business if the purchasing power of money continues to fall, because their customers are over-indebted. Unless the expansion of the money quantity continues at an increasing rate, the whole financial system will most likely grind to a halt. It is now required of central banks to ensure the money quantity continues to expand sufficiently to prevent systemic failure.

    It is therefore only a matter of time, so long as current monetary policies persist, before it dawns on the wider public what is happening to money. Preferences will then shift more definitely against holding money, radically altering all price relationships. If this leads into a hyperinflation of prices, which is the logical and unavoidable outcome, the speed at which money collapses will be governed in part by physical factors. In the case of Germany's great inflation in the 1920s, the final collapse can be tied down to a period of six months or so, between May and November in 1923, after a last-ditch attempt to control monetary inflation failed.

    The limiting factor in this case was the time taken to clear payments through the banking system, and when prices began to rise so rapidly that cheques lost significant value during the clearing and encashment process, the economy moved entirely to cash. When prices rose faster than cash could be printed, the limitation on the purchase of necessities then became one of cash availability.

    It is in truth impossible to isolate all the factors involved, and the course of events during the destruction of a currency's purchasing power is bound to vary from case to case. Today the situation is very different from the hyperinflations in Europe over ninety years ago. A society which uses electronic transfers spends bank deposits instantly. The merchant, who is subject to the same panic over the value of the payment received looks to dispose of his cash balances as rapidly as possible as well. In other words, the electronic transfer of money has the potential to facilitate a collapse in purchasing power at a rate that is far more rapid than previously experienced.

    The most obvious delaying factor left becomes the speed with which the public realises that government money has no value at all. People are generally ignorant of monetary matters, and a majority of them have no alternative but to believe in their money, because without it they are reduced to barter. It is entirely human to wish these concerns away. For a minority of the population lucky enough to have a combination of wealth and foreign currency bank accounts the problem was not so great in the past, but the interconnectedness of the global monetary system suggests that all today's fiat currencies face the same problem contemporaneously, and there is no refuge in foreign currency.

    These concerns have encouraged the development of alternative solutions, such as our own Bitgold/GoldMoney payment and storage facility, which will allow both consumers and producers to reduce their exposure to the banking system and continue to trade. There are also private currency alternatives such as bitcoin. Whether or not alternative currencies have a future monetary role for ordinary people at this stage looks unlikely, primarily because they are less stable than government currencies; however that might change in the future. They represent a work-in-progress that has the power to undermine the state monopoly on money, not least because they lie outside a government's ability to manage capital controls directed through the banks.

    What fascinates many of those with an understanding of anticipatory private sector solutions, is the potential for triggering a seismic change in the money used today. They have the ultimate potential to free commerce from the whole concept of a state-directed monetary policy. Rapidly developing technological solutions are therefore another factor that could accelerate the public rejection of government money and the state-licensed banking system, simply by offering a practical alternative to a debasing currency. With the progress being made to eliminate cash and the private sector's ability to develop an alternative financial system in advance, if the collapse of government money comes, it could be very swift indeed.

  • Radar Image Said To Reveals Nazi "Gold Train" Final Resting Place

    With every passing week the saga of the Nazi “Gold train”, which legend has it carried some 300 tons of Third Reich gold when it disappeared somewhere between the Polish cities of Wroclaw and Walbrzych, gets more interesting. In the last train update a week ago, we learned that the Polish culture ministry had confirmed the discovery of the train, but promptly backpeddaled, warning it may be boobytrapped, before toning down the “discovery” rhetoric saying it had no knowledge of the issue to keep the wannabe-Indiana Joneses away.

    Instead, as the Telegraph reports, it was none other than Polish soldiers who arrived on Friday at the “X marks the (alleged) spot” of the train’s final resting place. “Polish soldiers arrived on Friday at the spot where authorities suspect a German Nazi-era train that could be carrying guns and looted jewels is buried.”

    The military personnel arrived in Walbrzych, an old mining town in south-west Poland, as the two treasure hunters who last month claimed to have found the fabled train went public.

    In addition to the involvement of the military, another key development took place when the two formerly anonymous men who claimed to have found the train, finally revealed their identity and spoke to the Polish media: Piotr Koper, from Poland, and German national Andreas Richter appeared before the cameras of TVP, Poland’s public television station, insisting that they had “clear evidence of the so-called gold train.”

    Peter Koper and Andreas Richter who have claimed that they have
    discovered an armoured train from World War II in the area of Walbrzych

    Until now the two men had kept their identity secret, fueling suspicion that their claims were a hoax.

    “We have clear evidence of the train,” said Mr Koper from reading a short prepared statement, adding they had found it by using “our own resources, eyewitness testimony and our own equipment and skills.”

    The reason the two had shied from media reports is because they were trying to negotiate a 10% finders fee on the value of the find, said to be in the billions. And while the duo had pledged to place the train in a local museum if it is discovered, Koper insisted that evidence the pair had presented confidentially to local authorities on August 18 had later been leaked to the media.

    Whether that dilutes their “finders” leverage, or fee, remains to be seen, as remains to be seen if indeed the legendary train is hidden where the two claim it can be found, some 70 years after its final voyage.

    As proof of their discovery, the men released an image taken with ground penetrating radar purportedly showing the armored train. It is shown below.

    A graphic taken with a GPR KS-700 reportedly showing a section of land in 3D with a visable shaft

    With the Polish army already in place, and certainly doing its best to reach the train as fast as possible, the answer whether the mysterious Nazi gold train has indeed been found should be available in the next several days.

  • Sep 8 – China FX Reserves In Record Fall On Yuan Intervention
    Follow The Market Madness with Voice and Text on FinancialJuice

     

    EMOTION MOVING MARKETS NOW: 9/100 EXTREME FEAR

    PREVIOUS CLOSE: 11/100 EXTREME FEAR

    ONE WEEK AGO: 14/100 EXTREME FEAR

    ONE MONTH AGO: 28/100 EXTREME FEAR

    ONE YEAR AGO: 47/100 NEUTRAL

    Put and Call Options: EXTREME FEAR During the last five trading days, volume in put options has lagged volume in call options by 24.35% as investors make bullish bets in their portfolios. However, this is still among the highest levels of put buying seen during the last two years, indicating extreme fear on the part of investors.

    Market Volatility:  NEUTRAL The CBOE Volatility Index (VIX) is at 26.09. This is a neutral reading and indicates that market risks appear low.

    Stock Price Strength: EXTREME FEAR The number of stocks hitting 52-week lows is slightly greater than the number hitting highs and is at the lower end of its range, indicating extreme fear.

    PIVOT POINTS

    EURUSD | GBPUSD | USDJPY | USDCAD | AUDUSD | EURJPY | EURCHF | EURGBP| GBPJPY | NZDUSD | USDCHF | EURAUD | AUDJPY 
     

    S&P 500 (ES) | NASDAQ 100 (NQ) | DOW 30 (YM) | RUSSELL 2000 (TF) | Euro (6E) |Pound (6B) 

    EUROSTOXX 50 (FESX) | DAX 30 (FDAX) | BOBL (FGBM) | SCHATZ (FGBS) | BUND (FGBL) 

    CRUDE OIL (CL) | GOLD (GC)

     

    MEME OF THE DAY – DUBAI GOLD DEALER OLYMPICS

     

    UNUSUAL ACTIVITY

    SH NOV 25 CALL Activity PRO SHARES SHORT 800 @$.60 on OFFER

    NBL SEP 30 CALL Activity @1.60 by offer 6000+ Contracts

    VIPS NOV 22 CALLS 3200 Block right by the BID side @$.575

    LANC Director Purchase 500 @$96.6

    CDE President and CEO Purchase 25,000 @$2.8984

    BBT Director Purchase 1800 @$35.797 Purchase 1800 @$35.779

    More Unusual Activity…

     

    HEADLINES

     

    ECB asset buying slows to weakest pace since QE began

    BOJ said to waver on confidence in underlying growth

    BBK’s Weidmann replaces Noyer as BIS Board Chairman

    AU Manpower Survey (Q4): 7.00% (prev. 4.00%)

    NZ Manpower Survey (QoQ) (Q4): 12% (prev 11%)

    UK PM Cameron faces revolt over EU referendum rules

    Majority of Brits would vote for Brexit –poll

    IEA’s Birol: Oil prices to remain low

    Glencore to reduce costs by $10bn to cut debt

    Tesco agrees sale of South Korean business for £4bn

    China FX reserves in record fall on yuan intervention

    China to cut dividend taxes for long-term shareholders

    China cuts 2014 growth rate to 7.3%

     

    GOVERNMENTS/CENTRAL BANKS

    BBK’s Weidmann appointed BIS Board Chairman, replacing Noyer

    BOJ said to waver on confidence in underlying growth –BBG

    France’s Hollande: French Growth Expected At More Than 1% In 2015 –Rtrs

    Hollande: E2 Bln in 2016 Tax Cuts Won’t Raise Deficit –MNI

    UK PM Cameron faces parliamentary revolt over EU referendum rules –Rtrs

    EY: UK FinMin Osborne’s bank raid ‘to raise double forecast’ –SKY

    Poll suggests majority of Brits would vote for Brexit –CNBC

    ESM’s Regling confident IMF will participate in Greek program -Rtrs

    Greece’s Tsipras pledges to continue fighting for better bailout terms –WSJ

    Tsipras rules out possibility of cooperation with New Democracy –Enikos

    GEOPOLITICS

    IAEA: North Korea reportedly building at nuclear site –JP

    FIXED INCOME

    ECB Asset Buying Slows to Weakest Under QE in Summer Lull

    ECB PSPP (04 Sep): EUR301.447B (Prev EUR289.537B)

    ECB CBPP3: EUR112.215B (Prev EUR111.116B)

    ECB ABSPP: EUR11.494B (Prev EUR11.112B)

    US companies dominate Eurozone debt issuance –WSJ

    Sovereign borrowers are falling behind on record sums of debt –FT

    Asset-backed debt losses mount as Draghi support proves feeble –BBG

    Zurich Said to Arrange $8.4 Billion Bank Financing for RSA Bid –BBG

    Treasury Market Liquidity To Be Bullish In Mid September –Wall St Examiner

    FX

    GBP: Sterling gets respite from sell-off –Rtrs

    USD: DB cautions against USDJPY dip-buying

    CHF: Franc weakens after Swiss data –FT

    CNY: China FX reserves fall by record $93.9bn on CNY intervention –WSJ

    EM FX: Rand, lira weighed by global and local concerns –FT

    EM FX: Ringgit falls to new 1998 low amid uncertainty

    COMMODITIES/ENERGY

    CRUDE: Rosneft chief rules out Russia/Opec co-operation –RT

    CRUDE: IEA’s Birol: Oil prices to remain low –SZ

    COPPER: Glencore cuts give copper a leg up –FT

    EQUITIES

    C&E: Glencore swings $10bn axe to cut debt –FT

    M&A: Tesco agrees to sell South Korean business for ?4bn –BBC

    M&A: Microsoft poised to buy Israeli cybersecurity firm –CNBC

    DEALS: Goldman group buys Barclays secured lending unit –FT

    C&E: Rio: expect partnerships, not M&A amid slump –FT

    BANKS: EBA reveals shrinking pool of millionaire bankers –FT

    CRA: Moody’s revises Mitsubishi’s outlook to stable; affirms A1 rating

    AUTOS: Fiat Chrysler recalls 8,000 Jeeps amid hacking fears –IBT

    EMERGING MARKETS

    China cuts 2014 growth rate to 7.3% –WSJ

    China Financial Futures Exchange proposes circuit breakers for Chinese stock markets

    China to cut dividend taxes for long-term shareholders –Rtrs

    China End -Aug Gold Reserve: $61.8B (prev $59.2B)

    China End- Aug Forex Reserves: $3.56T (est $3.58T, prev $3.65T)

     

    COMMENT: Is it time to declare an EM crisis?

  • The Elite Have Prepared For The Coming Collapse – Have You?

    Submitted by Michael Snyder via The Economic Collapse blog,

    Why are the global elite buying extremely remote compounds that come with their own private airstrips in the middle of nowhere on the other side of the planet?  And why did they start dumping stocks like crazy earlier this year?  Do they know something that the rest of us don’t?  The things that I am about to share with you are quite alarming.  It appears that the global elite have a really good idea of what is coming, and they have already taken substantial steps to prepare for it.  Sadly, most of the general population is absolutely clueless about the financial collapse that is about to take place, and thus most of them will be completely blindsided by it.

    As I discussed the other day, the only way that you make money in the stock market is if you get out in time.  The elite understand this very well, and that is why they have been dumping stocks for months.  This is something that has even been reported in the mainstream news.  For example, this comes from a CNBC article that was published on June 16th…

    The so-called smart money is pulling back from market risk, with fund managers taking down exposure to stocks, increasing cash holdings and buying protection against a sharp selloff.

    About two weeks before that, I discussed the same phenomenon on my website.  The article that I published on May 30th was entitled “Why Is The Smart Money Suddenly Getting Out Of Stocks And Real Estate?”

    Did the “smart money” know what was about to happen?  Since the peak of the market, the Dow has already lost more than 2200 points.  All of the gains since the end of the 2013 calendar year have already been completely wiped out.

    And of course the truth is that you didn’t really need any inside information to see that it was time to get out.  I have been warning my readers for months about what was coming.  The signs have been clear as a bell if you were willing to look at them.  Just consider the following excerpt from a recent piece by Michael Pento…

    Earlier in the year margin debt had risen over $30 billion or 6.5% to $507 billion and was equal to a record 2.87% of U.S. GDP. This surpasses the previous all-time high of 2.78% set in March 2000 – the top of the last largest stock market bubble in history.

     

    And despite the assurance of every mutual fund manager on TV that they have boatloads of cash ready to deploy at these “discounted” levels, in early August cash levels at mutual funds sank to their lowest level in history, 3.2% (see chart below). As a percentage of stock market capitalization, fund cash levels are also nearing the record low set in 2000 when the NASDAQ peaked and subsequently crashed by around 80%.

    The financial markets are absolutely primed for a major crash, and when that happens many among the elite will be hightailing it to the middle of nowhere.

    Earlier this year, the Mirror published an article all about this entitled “Panicked super rich buying boltholes with private airstrips to escape if poor rise up“.  Here is a brief excerpt…

    Robert Johnson, president of the Institute of New Economic Thinking, told people at the World Economic Forum in Davos that many hedge fund managers were already planning their escapes.

    He said: “I know hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand because they think they need a getaway.”

    Keep in mind that these are not just some rumors that Robert Johnson has heard.  These are people that he knows personally and that he interacts with regularly.

    And Robert Johnson was not alone in this assessment.  Here is more from the Mirror…

    His comments were backed up by Stewart Wallis, executive director of the New Economics Foundation, who when asked about the comments told CNBC Africa: “Getaway cars, the airstrips in New Zealand and all that sort of thing, so basically a way to get off.

     

    “If they can get off, onto another planet, some of them would.”

    For some reason, the global elite seem to have a particular affinity for New Zealand.  Perhaps it is because of the great natural beauty of the nation combined with the fact that it is in the middle of nowhere.  The following comes from the Daily Mail…

    New Zealand, which is about the size of the UK, but has a population of just 4.4 million, offers them all the modern luxuries they have come to expect – but miles from any country which may implode into chaos.

     

    The country is 11,658 miles away from the UK, while its closest neighbour is Fiji – 1,612 miles away, more than double the distance between Lands End and John O’Groats.

     

    Homes at the top end of the market come with tennis courts, swimming pools and media rooms – and some even boast their own personal jetties where a family can moor their boat.

     

    But the icing on the cake for those looking to make a quick escape comes in the form of private helipads or, better, your own airstrip.

    For most of us, buying a luxury bolthole with a private airstrip in New Zealand is not a possibility.

    But we should all be getting prepared.

    I have a contact in the food industry that has told me that her company’s sales have “been through the roof” over the past 10 days as people stock up for what is coming.  In fact, she even used the word “panic” to describe what was happening.

    And Americans have been buying a record number of guns as well…

    Newly released August records show that the FBI posted 1.7 million background checks required of gun purchasers at federally licensed dealers, the highest number recorded in any August since gun checks began in 1998. The numbers follow new monthly highs for June (1.5 million) and July (1.6 million), a period which spans a series of deadly gun attacks — from Charleston to Roanoke — and proposals for additional firearm legislation.

    For a very long time, I have been warning people to get prepared.

    Well, now we are getting so close that panic is starting to set in.

    Hopefully you are already well prepared for what is about to happen.  If not, you need to kick your prepping into overdrive.

    These next few months are going to change everything.  Get ready while you still can.

  • Chuck Norris "Exhausted" By Iran Nuclear "Antics", Walker May Launch "Pre-Emptive Strikes"

    Earlier this year, for reasons that remain unclear to this day, the US government decided to re-annex Texas.

    The idea, according to on-the-ground intelligence, was to send in the SEALs and other elite military units under the guise of a “training” exercise on the way to instituting martial law and nullifying Texans’ second amendment rights. The exercises, dubbed “Jade Helm 15”, began on July 15 and run through next week. As of now, the feared “Texas takeover” has not in fact played out. 

    As far as we can tell, there are only two possible explanations for why insubordinate Texans weren’t rounded up in rail cars and shipped off to makeshift internment camps at abandoned Wal-Marts. The first explanation is that Jade Helm really was what the military said it was – a training exercise. Needless to say, that seems unlikely – just ask Walter Eugene Litteral, Christopher James Barker, and Christopher Todd Campbell (pictured below). 

    The more plausible reason why Texas is not currently under siege by federal forces is that the US Spec Ops command realized the government’s original assumption – that besides the Texas guard, the state would be largely defenseless against a federal incursion – was a dangerous miscalculation…

    As you might recall, Chuck Norris pledged to protect the state in the event Jade Helm turned Texas into a war zone and we can only assume that it was Walker Texas Ranger’s warning to Washington (“these ‘exercises’ come too near to my ranch’s backdoor”) which ultimately served to dissuade the Pentagon. 

    Now that Jade Helm is set to end without incident, Chuck Norris is free to focus on even bigger threats to the American public than the military. Threats like Barack Obama and Iranian President Hassan Rouhani, two like-minded despots who, as you might have heard, recently struck a deal that will soon see Tehran obtain enough nuclear firepower to wipe out a continent – or something. 

    Anyway, we learned last week that Obama likely has the support he needs to sustain a veto of a GOP challenge to the Iran Nuclear Deal which means that unless Republican lawmakers can figure out some manner of legislative ruse, the world is about to get a lot more dangerous – and in a hurry. 

    Of course keeping America safe in an insanely dangerous world means calling on an insanely dangerous man for help and on that note, we bring you the following message from Chuck Norris, in which America’s favorite Texas Ranger suggests that if he were allowed to speak for and act on behalf of the entire international community (and what a world that would be), the Bahamas will never obtain a nuclear weapon, Iranian drug dealers will never be given a 90-day heads up to hide their stash, and most importantly, Iranian nuclear ambitions will be “sniffed” out and “pre-emptive strikes” will be launched.

    *  *  *

    Via Chuck Norris

    Let me highlight six Obama statements about the Iran nuclear agreement that are complete exaggerations.

    1) President Obama said, “I’ve had to make a lot of tough calls as president, but whether or not this deal is good for American security is not one of those calls. It’s not even close.”

    “Not even close”?

    He just said Friday, “the vast majority of experts on nuclear proliferation have endorsed this deal. The world is more or less united …”

    But 200 retired generals and admirals completely disagreed as they sent a letter to Congress last week urging lawmakers to reject the Iran nuclear agreement, which they said “would threaten the national security and vital interests of the United States.”

    Are we to assume that most of them are not in any respect “experts on nuclear proliferation”? And are we gullible enough to believe that the commander in chief knows more about military strategy and American security than 200 retired generals and admirals?

    2) President Obama said, “Because this is such a strong deal, every nation in the world that has commented publicly – with the exception of the Israeli government – has expressed support.”

    But the Wall Street Journal reported that “Saudi Arabia, Egypt and the United Arab Emirates – are just as distraught” as Israel about the Iran nuclear deal.

    Obama’s “with the exception of the Israeli government” comment is not only a ginormous snub to our greatest ally in the Middle East but an affront to the fact that Israel has been threatened repeatedly with genocide by Iranian leaders.

    Jerusalem is 970 miles from Tehran, which is roughly the distance between Washington, D.C., and the islands of the Bahamas – just 50 miles off the Florida coast. If the Bahamas were a hostile state to Washington with a long history of threatening to eradicate the U.S. capital from the planet, do you think anyone in Washington would concede to give the Bahamas nuclear power?

    3) The president initially said International Atomic Energy Agency, or IAEA, inspectors would be allowed to “access any suspicious location” in Iran. He then backpedaled and limited it, saying, “Inspectors will be allowed daily access to Iran’s key nuclear sites. If there is a reason for inspecting a suspicious, undeclared site anywhere in Iran, inspectors will get that access, even if Iran objects. This access can be with as little as 24 hours’ notice.”

    But the truth is, Obama’s “anytime, anywhere” inspections is a bunch of smoke-and-mirror sales pitches to get the American public and legislators to buy the agreement.

    First, even the president confessed: “And while the process for resolving a dispute about access can take up to 24 days, once we’ve identified a site that raises suspicion, we will be watching it continuously until inspectors get in.”

    However, the Wall Street Journal did an investigation into the Joint Comprehensive Plan of Action released by the Obama administration and it “reveals that its terms permit Iran to hold inspectors at bay for months, likely three or more.”

    Now, imagine what a drug dealer could do with a warning 90 days before a law-enforcement raid.

    The White House noted: “Right now, Iran has nearly 20,000 centrifuges between their Natanz and Fordow facilities. But under this deal, Iran must reduce its centrifuges to 6,104 for the next ten years.”

    Ten years?! That’s two-and-a-half presidential terms or cycles. And we expect the No. 1 terrorist-recruiting Islamic nation in the world to comply and not play a shell game with centrifuges over that 10-year period?

    And if you think the preceding sounds bogus, consider that the Associated Press just discovered a “secret agreement” between the IAEA and the United Nations and reported this about the discovery: “Iran will be allowed to use its own inspectors to investigate a site it has been accused of using to develop nuclear arms, operating under a secret agreement with the U.N. agency that normally carries out such work.”

    And, to add injury to insult, guess who will pay for those Iran inspectors to investigate their own nuclear facilities? You guessed: the American taxpayers have to pay more than $10 million a year.

    Imagine: Washington agreeing to force American taxpayers to pay for a rogue and terrorist-funding Islamic republic to inspect its own nuclear facilities while ignorantly hoping it doesn’t develop a nuclear bomb behind our backs.

    We really have forgotten Sept. 11.

    Over the last week, I discovered two more exaggerations for a total of eight I want to address.

    Here are two more significant exaggerations:

    Obama says his critics are exclusively Republican and warmongers: “a majority of Republicans declared their virulent opposition. … By killing this deal, Congress would not merely pave Iran’s pathway to a bomb, it would accelerate it.”

    First, what Americans need to know is that many of those who have formerly backed the president are reneging their support when it comes to the nuclear deal with Iran. And even though the president may boast that he has enough votes to prevent a veto override by Congress, opponents are within one vote of securing enough votes to overcome any filibuster, and five Democrats’ votes are still unknown.

    What is it saying for a Democrat president when key Democrats largely from more liberal coastal states are even opposing his nuclear deal?

    Obama cited critics, “They warned that sanctions would unravel. They warned that Iran would receive a windfall to support terrorism. The critics were wrong.”

    No, Obama is wrong, and this point may prove just how clueless he really is.

    Here’s one of the craziest facts about the U.S. deal: Even if Congress rejects it, Iran will be rewarded with at least $40 billion and up to $150 billion that were previously frozen through international sanctions. These are funds that can and will be used to sponsor terrorism against the U.S. itself.

    When fact-checking this claim, PolitiFact affirmed, “Even if Congress does not approve lifting the United States’ sanctions, Iran will likely be able to get a good chunk of the money it currently cannot access.”

    PolitFact continued, “Iradian estimated that Iran would be able to access $40 billion of its currently inaccessible assets in that scenario, and the Iranian economy could get an even bigger boost if European companies decided to invest heavily in Iran.”

    The more you open the sanction floodgates, the more money Iran will have to pour into its military and pro-terrorist sponsoring. And don’t forget that the Islamic regime will also start to sell its oil openly on the market. That will dump mega-amounts of money into its economy and military to fund terrorism around the region and world.

    The worst part of this money being released is what prompted even Rep. Brad Sherman, D-Calif., to call the whole deal “good, bad and ugly.” Win or lose the agreement, Iranians will “get their hands on $56 billion,” which he said they will use to “kill a lot of Sunni Muslims, some of who deserve it and many of whom do not, and what’s left over will go to kill Americans and Israelis.”

    Does the White House have a cell left in its thinking cap? Who’s kidding whom? Is there anything right or sane about giving a terrorist nation the money to kill our own people and allies?

    How about the option neither to give Iran nuclear abilities nor more pro-terrorist monies?

    What about the international community regarding Iran for the terrorist-sponsoring Islamic regime it is and saying to its leaders, “We’re exhausted by your antics and empty promises. If we so much as sniff continued nuclear development, we are going to covertly and overtly stop you, even if that means military action and pre-emptive strikes on your nuclear facilities.”

    Isn’t an international line in the sand a better option than either Iran developing a nuclear bomb behind our backs or funding more terror against the U.S. and possibly our next Sept. 11?

    Congress, don’t be pressured to drink the nuclear Kool-Aid!

    *  *  *

  • In Major Escalation, Washington Demands Greece Blocks Its Airspace For Russian Flights To Syria

    Last week, when reporting that at least according to the White House,Russian presence in Syria is no longer disputed, we said that regardless if Russian troops are indeed on the Syrian ground, this admission that the current Syrian state of play “effectively ends the second “foreplay” phase of the Syrian proxy war (the first one took place in the summer of 2013 when in a repeat situation, Russia was supporting Assad only the escalations took place in the naval theater with both Russian and US cruisers within kilometers of each other off the Syrian coast), which means the violent escalation phase is next. It also means that Assad was within days of losing control fighting a multi-front war with enemies supported by the US, Turkey and Saudi Arabia, and Putin had no choice but to intervene or else risk losing Gazprom’s influence over Europe to the infamous Qatari gas pipeline which is what this whole 3 years war is all about.”

    Moments ago, following ever louder hints – if still unconfirmed by the Kremlin – that Russian forces are either en route to Syria or already there (Russian soldier’s VK post stating troops are in Syria, intercepted communication from a Russian An-124 military cargo plane en route to Latakia, Russian Roll-on/roll-off ship allegedly carrying military equipment to Syria), the US made a dramatic diplomatic escalation ahead of what is now assured to be the second major showdown between the US and Russia in Syria, over a Qatari gas pipeline no less, when according to Reuters, it asked Greece to deny Russia the use of its airspace for supply flights to Syria, a Greek official said on Monday, after Washington told Moscow it was deeply concerned by reports of a Russian military build up in Syria.

    Reuters also notes that the Greek foreign ministry said the request was being examined. “Russian newswire RIA Novosti earlier said Greece had refused the U.S. request, quoting a diplomatic source as saying that Russia was seeking permission to run the flights up to Sept. 24.”

    We very much doubt Athens will refuse to comply with western (either US or European) demands: now that Greece is officially a European debt colony with permanent capital controls, and deposits whose evaporation is merely a function of Brussels (and Frankfurt’s) good will, what the “democratic powers” demand – if only from Greece – the “democratic powers” get, which is why we are confident that within 48 hours Greece will fully roll over and make it clear to Putin that all Russian military flights will have to be diverted going forward.

    We have previously explained the state of play, which Reuters summarizes as follows:

    U.S. Secretary of State John Kerry told his Russian counterpart Sergei Lavrov on Saturday that if reports of the build-up were accurate, that could further escalate the war and risk confrontation with the U.S.-led alliance that is bombing Islamic State in Syria.

     

    Lavrov told Kerry it was premature to talk about Russia’s participation in military operations in Syria, a Russian foreign ministry spokeswoman told RIA Novosti on Monday.

     

    Lavrov confirmed Russia had always provided supplies of military equipment to Syria, saying Moscow “has never concealed that it delivers military equipment to official Syrian authorities with the aim of combating terrorism”.

     

    Russia has been a vital ally of President Bashar al-Assad throughout the war that has fractured Syria into a patchwork of areas controlled by rival armed groups, including Islamic State, leaving the government in control of much of the west.

     

    Foreign states are already deeply involved in the war that has killed a quarter of a million people. While Russia and Iran have backed Assad, rebel groups seeking to oust him have received support from governments including the United States, Saudi Arabia and Turkey.

     

    The Syrian army and allied militia have lost significant amounts of territory to insurgents this year. Assad said in July the Syrian army faced a manpower problem.

    Still, the simplest confirmation and the proof that the Syrian intervention was never about ISIS (which from day one was a US creation designed to remove Assad from power), is that Russia has been trying to build a wide coalition including Damascus to fight Islamic State.

    But the idea has been rejected by enemies including the United States and Saudi Arabia, who see Assad as part of the problem.

    But wait a minute, the only reason Assad is on the verge of losing control is because of ISIS which earlier today was reported to have captured a key Syrian oil field near the city of Palmyra. It appears that only when it comes to affairs involving ISIS, the enemy of America’s enemy is double its enemy.

    Then again, once one realizes that ISIS was from day one nothing but window dressing for a mythical opponent created in Hollywood, and designed to spook the masses into providing the media cover for what is shaping as an inevitable western intervention in Syria, and that the real enemy was none other than the same Assad who in the summer of 2013 was shown on a fabricated YouTube clip to have gassed his population in another transparent attempt to rally the population around the offensive war flag, then all falls into place.

    Meanwhile, what we first reported is quietly but rapidly taking place behind the scenes: Russia is preparing for what appears to be the latest inevitable proxy war: one which will pit Syria (with Russian support, on and off the ground) against ISIS, the “moderate Syrian rebels”, and various Turkish forces (with US support, on and off the ground).

    From Reuters:

    A senior U.S. official told Reuters on Saturday that U.S. authorities have detected “worrisome preparatory steps,” including transport of prefabricated housing units for hundreds of people to a Syrian airfield, that could signal that Russia is preparing to deploy heavy military assets there.

     

    The official, speaking on condition of anonymity, said Moscow’s exact intentions remained unclear but that Kerry called Lavrov to leave no doubt about the U.S. position.

     

    A Syrian military official has said Syrian-Russian military relations have witnessed a “big shift” in recent weeks.

     A Lebanese newspaper reported on Monday that Russian military experts who arrived in Syria weeks ago have been inspecting air bases and working to enlarge some runways, particularly in the north, though Moscow had yet to meet a Syrian request for attack helicopters.

     

    As-Safir, citing a Syrian source, said there had been “no fundamental change” in Russian forces on the ground in Syria, saying they were “still operating in the framework of experts, advisers, and trainers”.

    Well would you look at that: the US is not the only country that can send military “instructors”, “consultants” and “trainers” to a distant country to prepare the locals for war.

    As-Safir said the Russians had “started moving toward a qualitative initiative in the armament relationship for the first time since the start of the war on Syria, with a team of Russian experts beginning to inspect Syrian military airports weeks ago, and they are working to expand some of their runways, particularly in the north of Syria.”

     

    The newspaper, which is well-connected in Damascus, said nothing had been decided about “the nature of the weapons that Damascus might receive, though the Syrians asked to be supplied with more than 20 Russian attack helicopters, of the Mi-28 type”.

    Bottom line: the battle lines are now fully drawn and the only question, just like in the case of the Greek near-default, is who gets the blame: if the western full court media press to represent Syria as colluding with Putin – when in reality Assad’s forces were about collapse under relentless US pressure, which with the help of ISIS, meant from day one to remove the Syrian president from power and replace him with a pro-US puppet, one who would allow the passage of the Qatari gas pipeline – succeeds, then the media spin is already prepared. It will mean that the imminent invasion in Syria by US and European powers will be portrayed as another escalation involving Russia, just like in 2013 and 2014.

    And yes, we said Europe because as France’s president pivoted earlier today, Europe’s refuge crisis is about to be portrayed as the responsibility of Assad (but apparently not of the Western powers whose intervention in Syria has led to the country being torn by a bloody civil war), and as a result France is now preparing to bomb Syria to retaliate for a tragic refugee crisis, that has been years in the making not without Washington’s, or CIA’s, blessing. In other words, just like the fabricated “chemical attack” youtube clips of 2013 were the media pretext to attack Syria, so Europe’s great refugee crisis of 2015 will be the catalyst for the second attempt to remove Assad from pwoer.

    On the other hand, Russia will deny any involvement in Syria, a la Crimea, even as its troops are positioned deep inside Syrian territory in preparation for what will soon be the latest mid-east proxy war.

    None of the above, however, should not detract from the seriousness of the situation: suddenly Syria is months if not weeks or even days away from a repeat of the summer of 2013 which some may have forgotten, but on several occasions the US and Russia were this close from launching another world war.

    Which is also why while we appreciate the impact of China’s economic hard landing on the price of oil, should the upcoming conflict, which now seems inevitable, spark a metaphorical (or literal) fire in, say, Saudi’s Ghawar oil fields – an outcome Putin would be delighted by – then oil may be poised for substantial upside from here.

    This is what we said last week:

    Finally, while we have no way of knowing how the upcoming armed conflict will progress, now may be a safe time to take profits on that oil short we recommended back in October, as the geopolitical chess game just shifted dramatically, and with most hedge funds aggressively short, any realization that the middle east is suddenly a far more violent powderkeg – one which may promptly include the Saudis in any confrontation – could result in an epic short squeeze.

    With every day that we get closer to the all-out Syrian war, said squeeze becomes virtually assured.

  • Two-Thirds Of Greeks Say Adopting Euro Has Not Benefited Country

    Five years of austerity, higher taxes, deep cuts in public spending, record suicide rates, and homelessness beyond anyone’s worst forecasts… is it any wonder that, as Gallup reports, a majority of adults in the country – 55% – said in a poll that they think converting from the Greek drachma to the euro in 2001 has harmed Greece.

     

     

    Perhaps most shocking is that 34% believe it has “benefited” Greece… perhaps that is the third of Greeks who have emigrated.. .or hold high office?

  • Petrostate Cash Crunch Continues Amid Oil Collapse, Proxy Wars

    On Friday we noted that Qatar has now followed Saudi Arabia into the debt markets to raise cash amid slumping crude prices. Specifically, Qatar issued some $4 billion in bonds earlier this month – the offering was oversubscribed four times. Central bank Governor Abdullah Bin Saoud Al Thani said simply, “Interest rates are low in Qatar now so we decided it was the right time to issue these bonds and sukuk.” 

    Indeed, but it’s clearly not all about interest rates although, as we said last month regarding the Saudis’ return to the bond market, there’s something hilariously ironic about the fact that one reason crude prices have remained so low is that ZIRP has kept capital markets open to insolvent US producers allowing them to stay in business longer than they otherwise would have, effectively making the war to maintain market share longer and more painful than the Saudis had figured on, and that, in turn, has now led Gulf states to tap the very same accommodative capital markets that are keeping their US competition in business.

    In short, the fallout from the demise of the petrodollar is becoming impossible to sweep under the rug even as Gulf states are keen to downplay the severity of the budget crunch.

    For the Saudis, who need crude at $100 to plug a budget deficit that’s projected at a whopping 20% of GDP, the situation is becoming particularly acute and indeed, the kingdom is now set to slash any “unnecessary expenditures.”

    Here’s AFP:

    “We are working… to cut unnecessary expenditure,” Finance Minister Ibrahim al-Assaf told Dubai-based CNBC Arabia in Washington, where he is accompanying King Salman on a visit.

     

    “There are projects that were adopted several years ago and have not started yet. These can be delayed,” Assaf said.

     

    He said the government would issue more conventional treasury bonds and Islamic sukuk bonds to “finance the budget deficit” – which is projected by the International Monetary Fund at a record $130bn (£86bn) for this year.

     

    The kingdom has so far issued bonds worth “less than 100 billion riyals (£17.8bn)” to help with the shortfall, he said, without providing an exact figure.

     

    “We intend to issue more bonds and could issue sukuk for certain projects… before the end of 2015,” Assaf said.

     

     

    And then just hours ago, via Reuters:

    Saudi Aramco, the kingdom’s state oil giant, is talking to banks about raising a $5 billion loan related to a refinery it built in collaboration with China’s Sinopec, three sources with knowledge of the matter said on Monday.

     

    The funds raised from banks will be used to replace some of the capital Aramco invested to build the 400,000 barrel per day (bpd) refinery at Yanbu on the west coast of the kingdom, which can then be deployed in other projects.

    In other words, the kingdom needs to borrow if it wants to keep financing projects at current crude prices. 

    For Qatar, the situation isn’t quite as dire. At $65/b, Qatar’s break-even price is far lower and the budget gap, so far anyway, is negligible. But that doesn’t mean the country’s officials aren’t acutely aware that the world is now scrutinizing the budgets of petrostates in the wake of collapsing crude and indeed on Monday, Qatari Finance Minister Ali Sherif al-Emadi was at pains to reassure the market that as of now, there’s no danger of projects being cut. Once again, here’s AFP:

    Qatar will not scale back economic development projects or cut state subsidies for fuel and food in response to low oil and natural gas prices, because government finances remain strong, the finance minister said on Monday.

     

    The comments by Ali Sherif al-Emadi set Qatar apart from other wealthy Gulf Arab oil exporting states; the other five members of the Gulf Cooperation Council have begun to curb spending or review costly consumer subsidies because of the plunge of energy prices since last year.

     

    Qatar, the world’s top liquefied natural gas exporter, is in the strongest financial position. A Reuters poll of economists last month found them predicting Doha would run a state budget deficit of only 0.7 percent of gross domestic product this year, the region’s smallest deficit.

     

    “Our budget is still not that far in terms of deficit,” Emadi said at a financial conference, adding that state finances would break even with an average oil price of $65 a barrel. Brent crude is currently around $49.

     

    “I still think the financial situation is very healthy and I don’t think we’ll take any extra measures for these things,” he said when asked whether subsidy cuts were possible.

    So while Qatar may be in the best position vis-a-vis its neighbors, when looked at in context, it’s not entirely clear that “healthy” is the right word to use when describing the fiscal situation relative to history:

    While subsidies are obviously a key consideration for the Saudi budget and also for Qatar, it’s certainly worth paying attention to developments in Yemen when discussing the outlook for the two countries’ fiscal accounts. As noted earlier today, Qatar deployed 1,000 troops over the weekend after a deadly rocket attack killed 45 UAE soldiers and 10 Saudi soldiers on Friday. If the push to take Sana’a ends up leaving the gulf monarchies mired in a protracted conflict, it could materially impact the region’s financial health in the face of persistently low crude and dwindling petrodollar reserves. 

    We’re quite sure we’ll be revisiting this sooner rather than later, especially given the fact that Saudi Arabia and Qatar are highly likely to get drawn deeper into the conflict in Syria as well, but for now we’ll close by posing the following question to Saudi Finance Minister Ibrahim al-Assaf:

    When you talk about “unnecessary expenditures”, does this count? …

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