Will US Drillers Drive Oil Prices into the Ground?
The relationship between supply and demand has a funny habit of holding true to form. Though a matter of pure coincidence, it is telling that the Wolfchamp news roughly coincided with oil price’s most recent peak. Since then, its per-barrel price has fallen by about a fifth to $44-ish despite the Saudi’s best efforts to push the price back towards $60, which is still down 60 percent from 2014 highs. It’s fair to ask if $60 is an arbitrary target? Think of it as the least sweet, sweet spot that enables the planned initial public offering of state-owned Saudi Arabian Oil (Aramco) to well, work, mathematically-speaking. You can bet your bottom petrodollar the very idea of taking the crown jewel public stirred a bit of controversy.
Cash-Out and Run For Cover—Huge Correction Dead Ahead
Renowned investor Marc Faber has made another dire prediction for the stock market: It may fall by as much as 40% or even more. “Dr Doom” Marc Faber, the author of “Gloom, Boom & Doom Report,” said in an interview to CNBC TV that the stock market could see another ‘lurch’ higher, but then the investors may want to cash out and run for cover.
Rig The Markets Even More?
Through Berkshire Hathaway, he quietly buys enough shares of a company to gain ownership in the single-digit percentage range. This buying activity drives up the price. His brokerage firm knows, word spreads, and those in the know also buy the shares. Then the stake is disclosed in an SEC filing. Instantly, shares jump further. “Buffett Buys x% of…” the media scream. With his avuncular face on CNBC and other TV shows, he gets to promote what a great company this is, how he believes in the management, yada-yada-yada. Shares jump further.
What the Fed Giveth….It Will Soon Taketh
Despite the ribbing from the media and Bernanke’s certitude, the truth of the matter is that those expressing inflationary concerns in 2008 were 100% correct. The only problem is that they failed to predict where inflation would appear. They did not appreciate at the time that those products closest to the monetary firehose would inflate.
Tensions Mount as the New Saudi Prince Takes Charge
Adding to these tensions, a palace coup in Saudi Arabia just sidelined the kingdom’s iron-handed number two, former Crown Prince and Interior Minister Mohammed bin Nayef and replaced him by 31-year old Prince Mohammed bin Salman, the favorite son of King Salman. The King is said to be seriously ill. But the 15,000-member Saudi family is not pleased by the defenestration of heir apparent Nayef. Prince – now crown prince – Mohammed was the author of Saudi Arabia’s stalemated war in Yemen, which is burning through the kingdom’s cash reserves at a time when oil prices are plunging and has killed large numbers of civilians. He is behind the recent Saudi-Egyptian-Israeli tacit alliance. It was Prince Mohammed who came up with the plan to run US shale producers out of business by launching an oil price war. It has backfired badly. The Saudis even had to borrow $9 billion to keep the kingdom running. Arab critics assert that the young prince is rash and inexperienced. The Trump administration likes Prince Mohammed a lot. He is about the same age as Trump’s favorite, son-in-law, Jared Kushner, who is in Israel this week supposedly crafting a final peace settlement between Jews and Arabs after a century of conflict. What a cruel joke this is.
Chinese Satellite Data Hint At Ominous Manufacturing Slowdown
Chinese factory activity contracted last month for the first time in nearly a year when the Caixin PMI dipped below 50, the threshold for growth. And now, early indicators for the month of June – including one satellite-based measure – suggest that there’s more pain ahead for the manufacturing sector in the world’s second-largest economy. A reading published by San Francisco-based SpaceKnow Inc. which uses commercial satellite imagery to monitor activity across thousands of industrial sites signaled deterioration in the country’s manufacturing sector for the first time since August. The gauge, known as the China Satellite Manufacturing Index, fell to 49.6, below the 50 break-even level. The index incorporates satellite data from thousands of industrial sites across China.
Project Veritas Exposes CNN: “The Russia Thing Is Just A Big Nothing Burger”
Yesterday, after dropping his first undercover CNN bombshell, which starred producer John Bonifield admitting that CNN’s endless ‘Russian meddling’ crusade was “mostly bullshit” directed by the network’s CEO Jeff Zucker with the sole intent of spiking ratings, Project Veritas’ James O’Keefe promised there was more to come. And, all we knew was that the subject of the second video would be “someone we all knew…” As it turns out, that ‘someone’ is none other than CNN’s Van Jones who inadvertently got caught revealing his true thoughts on CNN’s ‘Russian meddling’ narrative, namely that the whole story is a “big nothing burger.”
Seattle’s Minimum Wage Fiasco—-Lessons for California And Others
In 2016, Seattle raised its $11.00 per hour minimum wage to $13 per hour, the highest in the U.S. Subsequent protests demanded an increase to $15.00 per hour in 2017. However, research by economists at the University of Washington shows that the wage hike could have:1) Triggered steep declines in employment for low-wage workers, and 2) Resulted in a drop in paid hours of work for workers who kept their jobs. Overall, these negative impacts have more than cancelled out the benefits of higher wages, so that, on average, low-wage workers now earn $125 per month less than before the minimum wage was hiked in January 2016. In simple terms, instead of rising by $4,160 per annum, minimum wage earners’ wages fell $1,500 per annum…..
The Illinois Fiscal Disaster Intensifies—-$14.6 Billion of Unpaid Bills Stuffed In the Drawer
This is what happens when a major American state lets its bills stack up for two years. Hospitals, doctors and dentists don’t get paid for hundreds of millions of dollars of patient care. Social-service agencies help fewer people. Public universities and the towns that surround them suffer. The state’s bond rating falls to near junk status. People move out.
Republicans Craft the Next Great Healthcare Failure
The advocates of greater government involvement have always said that health care is too important to be left to the free markets. But you could make the same claims about food, clothing and shelter as well. The free market is perfectly capable of delivering those necessities at costs that fit all budgets. In fact, the relative costs of all three of those things have stayed the same, or come down, over the years. But health care, distorted by regulations, subsidies and tax incentives, has seen costs spiral out of control….But since Republicans do not have the guts to stand up for the free market principles they pretend to stand for, they should not make the fatal political mistake of affixing their brand to a sinking ship. Better to let the S.S. Obamacare sink, and then come up with a free market system that will actually float.
