The Shale Oil Party Won’t be an All-Nighter, Phibro’s Andy Hall Warns

What I find most frustrating is economic obfuscation and how statistics are manipulated to sell a paradigm. In a nutshell, lying leads to a misallocation of resources and therefore handicaps us in the future. The sustainable output of fracking is debatable, decline rates on wells are not publicised, it is highly subsidised through tax breaks and the environmental effects are unknown and more than likely, lethal. Courtesy of Andy Hall at Astenback Capital Management:

Oil Supply

The speed with which an interim agreement was reached with Iran was unexpected. Equally unexpected was the immediate relaxation of sanctions relating to access to banking and insurance coverage. This will potentially result in an increase in Iranian exports of perhaps 400,000 bpd. Beyond that it is hard to predict what might happen. The next set of negotiations will certainly be much more difficult. The fundamental differences of view that were papered over in the recent talks need to be fully resolved and that will be extremely difficult to do. Also, Iran’s physical capacity to export much more additional oil is in doubt because its aging oil fields have been starved of investment.

As to Libya, it seems unlikely that things will get better there anytime soon. The unrest and political discontent seems to be worsening. Whilst some oil exports are likely to resume – particularly from the western part of the country (Tripolitania), overall levels of oil exports from Libya in 2014 will be well below those of 2013. Continue reading

Mark Spitznagel Asks “Wouldn’t We Be Better Off Without Central Banks?”

Courtesy of Institutional Investor:

Happy 100th Birthday, Federal Reserve – Now, Please Go Away

Nearly 100 years ago, on December 23, 1913, the Federal Reserve Act was signed into law, giving the U.S. exactly what it didn’t need: a central bank. Many people simply assume that modern nations must have a central bank, just as they must have international airports and high-speed Internet. Yet Americans had gone without one since the 1836 expiration of the charter of the Second Bank of the United States, which Andrew Jackson famously refused to renew. Not to be a party pooper, but as this dubious anniversary is observed, we should ask ourselves, Has the Fed been friend or foe to growth and prosperity?

According to the standard historical narrative, America learned a painful lesson in the Panic of 1907, that a “lender of last resort” was necessary, lest the financial sector be in thrall to the mercies of private capitalists like J.P. Morgan. A central bank — the Federal Reserve — was supposed to provide an elastic currency that would expand and contract with the needs of trade and that could rescue solvent but illiquid firms by providing liquidity when other institutions couldn’t or wouldn’t. If that’s the case, then the Fed has obviously failed in its mission of preventing crippling financial panics. The early years of the Great Depression — commencing with a stock market crash that arrived 15 years after the Fed opened its doors — saw far more turmoil than anything in the pre-Fed days, with some 4,000 commercial banks failing in 1933 alone.

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Cameron’s internet filter goes far beyond porn – and that was always the plan

It seems to me that everything the UK government touches never provides the designed outcome but something far more sinister. A reduction in rights and privacy is prevelant and this is what we should be concerned with and moving to quell. This is not the behaviour of a healthy and open soceity but one in decline. Courtesy of the The New Statesman:

There is no porn filter, and blocking Childline is not an accident

The idea of an internet porn filter has always been a political fiction, a conveniently inaccurate sound bite used to conjure images of hardcore fisting and anal rape in the feverishly overactive imaginations of middle Britain. What activists actually called for – and ISPs were forced to provide – is an ‘objectionable content’ filter, and there is a vast, damp and aching chasm between the two.

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The language of the mythical ‘porn filter’ is so insidious, so pervasive, that even those of us opposed to it have been sucked into its slippery embrace. And so even when it turns out that O2 are blocking the Childline and Refuge websites, or that BT are blocking gay and lesbian content, we tend to regard them as collateral damage – accidental victims of a well-meaning (if misguided) attempt to protect out children from the evils of cock. Continue reading

Genetic discovery points the way to much bigger yields in tomato, other flowering food plants

Courtesy of Eurekalert:

Scientists learn how tweaking a ‘hybrid vigor’ gene generates higher crop yields

Cold Spring Harbor, NY – Every gardener knows the look of a ripe tomato. That bright red color, that warm earthy smell, and the sweet juicy flavor are hard to resist. But commercial tomato plants have a very different look from the backyard garden variety, which can grow endlessly under the right conditions to become tall and lanky. Tomatoes that will be canned for sauces and juice are harvested from plants that stop growing earlier than classic tomato varieties, and are therefore more like bushes. While the architecture of these compact bushy plants allows mechanical harvesters to reap the crop, the early end of growth means that each plant produces fewer fruits than their home garden cousins.

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But what if commercial tomato growers could coax plants into producing more fruit without sacrificing that unique and necessary bushy plant shape? Today, CSHL researchers announced that they have determined a way to accomplish this. Their research has revealed one genetic mechanism for hybrid vigor, a property of plant breeding that has been exploited to boost yield since the early 20th century. Teasing out the hidden subtleties of a type of hybrid vigor involving just one gene has provided the scientists with means to tweak the length of time that bushy tomato varieties can produce flowers. In these plants, longer flowering time substantially raises fruit yield. Continue reading

The Probability Of A Stock Market Crash Is Soaring

The writing is on the wall for all to see, with another market correction likely through lax monetary policy and from a central monetary authority who are incompetent at best. If the information is available, why is the response nonexistent? Courtesy of The Hedge:

While some individual stocks (cough TWTR cough) may have reached irrational bubble territory, the US equity market is undergoing a seemingly ‘rational’ bubble. However, as John Hussman illustrates in the following chart, the probability of a stock market crash is growing extremely rapidly.

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Does Quantitative Easing Mainly Help the Rich?

Silly question but of course it does, the central banks of the world are privately owned banks and they benefit….not me or you. Courtesy of CNBC:

Last month, the Bank of England issued a report that must have made Fed chairman Ben Bernanke squirm.

It said that the Bank of England’s policies of quantitative easing – similar to the Fed’s – had benefited mainly the wealthy.

Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households.

Many said the BOE’s easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it.”

The BOE countered that the benefits of easing may have trickled down, and that “without the Bank’s asset purchases, most people in the U.K. would have been worse off.” Continue reading

The Gold Rush Spreads From China And India To Saudi Arabia

Well it was only a matter of time before the authoritarian rulers of Saudi Arabia got involved in physical gold, especially with their oil reserves over stated. Courtesy of Zerohedge:

In the “west”, the higher the price of gold rose, the more demand there seemingly was by momentum-chasing gamblers investors, if only for paper certificates claiming to represent gold, or GLD as the case may be. Conversely, once the momentum turned, the same investors couldn’t be bothered with gld (sic) even at 30% lower. At the same time, in the “east” the higher the price of gold rose, the lower the demand was for physical, which for that extinct breed of deranged gambler known as “value investor” is a familiar concept.” And now that gold’s price is not only back to early 2011 levels, but is essentially below production costs, demand out of China is off the charts. Demand in India – traditionally the greatest in the world – continues to also at unprecedented levels, although now that official purchases of gold are regulated and limited through capital controls, it is forcing the local population to smuggle in gold through the most innovative of schemes.

But while the west is the west, and the east is the east, and no amount of adaptive behavioral modifications can change that, much to central bankers’ chagrin, what lies in-between? Courtesy of the Saudi Gazette we learn that the uber-rich middle eastern kingdom, which floats on a sea of oil has picked its side… and it has chosen to take advantage of the ongoing paper-driven price collapse and load up on as much gold as possible. Continue reading

Outrageous HSBC Settlement Proves the Drug War is a Joke

A quality article from Matt Taibi and one of the few mainstream writers who are shining a light on the malfeasance and malevolence of the system. Courtesy of Rollingstone:

If you’ve ever been arrested on a drug charge, if you’ve ever spent even a day in jail for having a stem of marijuana in your pocket or “drug paraphernalia” in your gym bag, Assistant Attorney General and longtime Bill Clinton pal Lanny Breuer has a message for you: Bite me.

Breuer this week signed off on a settlement deal with the British banking giant HSBC that is the ultimate insult to every ordinary person who’s ever had his life altered by a narcotics charge. Despite the fact that HSBC admitted to laundering billions of dollars for Colombian and Mexican drug cartels (among others) and violating a host of important banking laws (from the Bank Secrecy Act to the Trading With the Enemy Act), Breuer and his Justice Department elected not to pursue criminal prosecutions of the bank, opting instead for a “record” financial settlement of $1.9 billion, which as one analyst noted is about five weeks of income for the bank.

The banks’ laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC’s Mexican branches and “deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows.” Continue reading

Tax avoidance: a capital idea!

Courtesy of Private Eye:

“OFFSHORE investors avoiding millions in tax spent £7 billion on London’s lavish properties in last year sending market prices soaring.” So screamed a Daily Mail headline a year ago. What the newspaper didn’t report was that a chunk of the “offshore” purchases of prime London property were accounted for by its very own proprietor, Lord Rothermere.

Home for Rothermere, his wife Claudia and their five children is Ferne House, a neo-Palladian mansion in 224 acres of grounds in Wiltshire. But the family also has a London house on Addison Road, Holland Park, a ten-minute walk up Kensington High Street from the Mail’s Derry Street headquarters. This is no pokey pied-a-terre either. Property website Zoopla, part of Rothermere’s Daily Mail and General Trust plc group, values it at £21.75m.

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