The Fed unsurprisingly chickened out from the much touted September hike. International conditions and a disapproval from Mr. Market was enough to unnerve an increasingly bewildered FOMC board.
Less well known is the fact that the FOMC gave a strong, and unexpected, signal to the Pavlovian world of central bank front runners. Dovish hold as the enlightend call it. It is all about managing expectations – see Goebbelnomics where we said:
As the Keynesian revolution was merged with the models of Robert Lucas, it eventually morphed into something called neoclassical economic thought. The general gist was that economic agents can be tricked into changing their behaviour through surprises in monetary policy, which yes, has somewhat miraculously become the mainstay of central bank economists… … the academic transition led to the “economics of money shifting to economics of psychology”.
With this in mind it seem untenable that the radical change in the dot-plots is due to a rogue, independent minded FOMC member. On the contrary, everything coming out of the Federal Reserve is well coordinated and is there to signal to the rest of the world where the Fed would like speculators to place their bets, or in this case, should not put their money.
With the probability of the Federal Reserve’s funds rate going negative in 2016 suddenly much higher, the one way bet on a stronger dollar (and hence emerging market crash) is put into question. Investors will thus think twice before sending their money into the dollar from now on. This is obviously a desperate move from the FOMC in a futile attempt to stem the emerging market capital exodus.
As the chart below shows, large movements in the dollar coincide with emerging market bubbles and busts. The FOMC, wrongly, believes the strong dollar causes the bust, but in reality it is just a symptom of massive capital misallocations unable to service their debt and a consequent retrenchment in the Eurodollar leverage and velocity. Insisting on maintaining the unsustainable capital flows will only make the inevitable bust that must larger.
In other words, by adding international developments to the FOMC action function the health of the Eurodollar has become the de facto guiding target for the Fed. The Global Central Bank has officially been born.
It also tells investors, especially Wall Street banks with USD2.2 trillion held in a depository account at the Federal Reserve, that they should not necessarily expect to receive 25 basis points on their excess reserves for ever. Some of these banks were undoubtedly looking forward to the day the FOMC was forced to raise the rate on excessive reserves (IOER) because it would create even more scarce “capital” for the banks to play around with. In addition, those same reserves the Fed is paying banks to hold are part of an intricate re-hypothecated collateralised financial chain, helping to prop up risk throughout the investable world. We touched upon this in Corporate Foie Gras.
To banks, excess reserves are a highly valuable commodity. It receives an income (the IOER) as an immobile cash pile at the Fed and can simultaneously be used to trade ever rising markets.
However, the recipient of such collateral will use the very same collateral for their funding needs (re-hypothecation), creating long collateral chains dependent on the excessive reserves staying put.
However, if the cost of keeping reserves increases it will at some point be better to use the money directly – id est. withdrawing the money from the Fed. Note, the original holder of these deposits only benefits from the IOER and the first link in the collateralised chain. If the interest received go negative (and markets drop) it is easy to see that the cost of maintaining excess reserves will easily outweigh the benefits. The holder will thus refrain from keeping reserves at the Fed. This will in turn break the collateralised re-hypothecated chain, which will lead to widespread deflation (just as the QE’s wreaked havoc with the shadow banking system) and a general market sell-off through a fall in collateral velocity and leverage.
In the latest update on depository institutions Federal Reserve deposit holdings we may just have gotten a taste of what to expect. Banks withdrew an unprecedented USD405bn in one week; incidentally a week when the S&P500 lost more than 6 per cent. Hardly a coincidence.
So why would the FOMC risk so much by signalling NIRP when they could just keep interest rates unchanged and leave it at that? First of all, we don’t think they have a clue on what is going on behind the most obvious – the thing that is seen to use an expresson from Bastiat. The perception of central bank omnipotence may be a thing on Wall Street, but we don’t buy it.
Secondly, as mentioned above, they want to stem the strong dollar movement (which is just another way of saying propping up a crumbling Eurodollar).
Third, and this is where we think the Fed is going with this, they need to make sure there is a bid on TSYs as the global vendor funding machine is currently in reverse. Emerging markets and commodity producers have become net sellers of TSYs on a 12mth rolling basis and if the Eurodollar deflates further from here this selling will only intensify.
Imagine what would happen to “risk” if the all the banks, pension- hedge- and mutual funds would sell stocks and corporate bonds to buy TSYs in a deflationary down spiral. Rosengren’s Ternary Mandate would obviously not be met according to standard.
To assure a TSY bid, NIRP, or the possibility of NIRP, should induce banks to reallocate their excessive reserves to the treasury market; especially if there were a chance the Fed may lure them in with hints of both QE4 and NIRP.
In Europe something very similar happened. When the ECB lowered the deposit rate to zero banks moved funds from the deposit account to the current account to avoid the added cost of using the overnight deposit account, but then slowly moved money out of the ECB system and into sovereign bonds.
The striking similarity between Greek bond yields and excess liquidity within the euro bloc clearly suggest banks started to front run the ECB by buying sovereign bonds as the cost of holding excess reserves rose and the lure of buying sovereign bonds increased due to hints of ECB QE.
Greek yields are obviously affected by the dire political situation and negotiations with the quadriga and can make massive moves on the whims of European politicians. However, investor front running the ECB with the use of excess reserves is clearly shown in other markets too, such as the Bunds, Oats and BTPs thus substantiating our argument.
The European experience with NIRP is exactly what the Fed is looking for. Releasing excess reserves to buy the TSYs being sold by panicking emerging markets. In addition, the mere mentioning of NIRP could actually deter further dollar strength.
The fact that the re-hypothecated collateral chains that currently holds up risk will break and become highly deflationary and that the dollar strengthens because of a crumbling Eurodollar and not some perceived strength in the US economy will be lost on our money masters.
We believe the US will be in recession before the end of 2016 and then things will be really interesting. How will the public receive news of more QE, NIRP, forward guidance, cash bans and capital control in a time when faith in central bank omnipotence disappears?
Ceterum censeo Federal Reserve esse delendam
More and more institutions are trying to make it harder for you to move your money into cash.
Globally, over $5 trillion in debt currently have negative yields in nominal terms, meaning the bond literally has a negative yield when it trades. In the simplest of terms this means that investors are PAYING to own these bonds.
Bonds are not unique in this regard. Switzerland, Denmark and other countries are now charging deposits at their banks. In France and Italy, you are not allowed to make cash transactions above €1,000.
This sounds laughable to most people, but it is a reality in Europe… and in the US, in some regions. Louisiana has made it illegal to purchase second hand goods using cash.
This is just the beginning. The War on Cash will be spreading in the coming weeks.
The reasoning is simple. Most large financial entities are insolvent. As a result, if a significant amount of digital money is converted into actual physical cash, the firm would very quickly implode.
This is precisely what happened in 2008…
When the 2008 Crisis hit, one of the biggest problems for the Central Banks was to stop investors from fleeing digital wealth for the comfort of physical cash. Indeed, the actual “thing” that almost caused the financial system to collapse was when depositors attempted to pull $500 billion out of money market funds.
A money market fund takes investors’ cash and plunks it into short-term highly liquid debt and credit securities. These funds are meant to offer investors a return on their cash, while being extremely liquid (meaning investors can pull their money at any time).
This works great in theory… but when $500 billion in money was being pulled (roughly 24% of the entire market) in the span of four weeks, the truth of the financial system was quickly laid bare: that digital money is not in fact safe.
To use a metaphor, when the money market fund and commercial paper markets collapsed, the oil that kept the financial system working dried up. Almost immediately, the gears of the system began to grind to a halt.
When all of this happened, the global Central Banks realized that their worst nightmare could in fact become a reality: that if a significant percentage of investors/ depositors ever tried to convert their “wealth” into cash (particularly physical cash) the whole system would implode.
None of these issues have been resolved. The big banks remain as leveraged as ever and at risk of implosion should a significant percentage of capital get pulled into physical cash.
European banks as a whole are leveraged at 26 to 1. In simple terms, this means they have just €1 in capital for every €26 in assets (bought via borrowed money).
This is why whenever things get messy in Europe, the ECB and EU begin implementing capital controls.
Consider what recently happened in Greece. Depositors began to flee the banks in droves, so they declared a bank holiday. This holiday included safe deposit boxes… so all the bullion or physical cash Greeks had stashed there remained locked up… just like the “digital” money in their savings accounts.
Again, it was impossible to get cash out of the banks… even cash that technically wasn’t “in the system” anymore but sitting in safe deposit banks.
The US financial system isn’t any better. Indeed, the vast majority of it is in digital money. Actual currency is just a little over $1.36 trillion. Bank accounts are $10 trillion. Stocks are $20 trillion and Bonds are $38 trillion.
And at the top of the heap are the derivatives markets, which are over $220 TRILLION.
If you think the banks aren’t terrified of what this market could do to them, consider that JP Morgan managed to get Congress to put the US taxpayer on the hook for it derivatives trades.
Mind you, this is the same bank that is now refusing to let clients store cash in safe deposit boxes.
This is just the tip of the iceberg. As anyone can tell you, it’s all but impossible to move large amounts of money into cash in the US. Even the large banks will routinely ask you for 24 hours notice if you need $10,000 or more in cash. These are banks will TRLLLIONS of dollars worth of assets on their books.
This is just the beginning.
Indeed, we've uncovered a secret document outlining how the Fed plans to incinerate savings.
We detail this paper and outline three investment strategies you can implement
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We already noted that it has been a bad 24 hours for US foreign policy, when hours after the US blamed Russia of targeting civilians, it was the US itself which bombed a hospital in Afghanistan, killing 9 Doctors without Borders staffers, 3 children and other innocent bystanders.
The president got the brunt of it during yesterday's press conference, when he got a very targeted question from Reuters' White House reporter Julia Edwards who asked Obama point blank "how do you respond to critics who say Putin is outsmarting you, that he took a measure of you in Ukraine and he felt he could get away with it?"
The exchange can be seen 41:30 into the clip below:
Obama's meandering response:
Yes, I’ve heard it all before. (Laughter.) I’ve got to say I’m always struck by the degree to which not just critics but I think people buy this narrative.
Let’s think about this. So when I came into office seven and a half years ago, America had precipitated the worst financial crisis in history, dragged the entire world into a massive recession. We were involved in two wars with almost no coalition support. U.S. -- world opinion about the United States was at a nadir -- we were just barely above Russia at that time, and I think potentially slightly below China’s. And we were shedding 800,000 jobs a month, and so on and so forth.
And today, we're the strongest large advanced economy in the world -- probably one of the few bright spots in the world economy. Our approval ratings have gone up. We are more active on more international issues and forge international responses to everything from Ebola to countering ISIL.
Meanwhile, Mr. Putin comes into office at a time when the economy had been growing and they were trying to pivot to a more diversified economy, and as a consequence of these brilliant moves, their economy is contracting 4 percent this year. They are isolated in the world community, subject to sanctions that are not just applied by us but by what used to be some of their closest trading partners. Their main allies in the Middle East were Libya and Syria -- Mr. Gaddafi and Mr. Assad -- and those countries are falling apart. And he’s now just had to send in troops and aircraft in order to prop up this regime, at the risk of alienating the entire Sunni world.
So what was the question again? (Laughter.)
Laughter indeed, but yes: Obama really needed a reminder what the question was as he completely failed to answer it. He did try to pivot back modestly toward the end of the near-800 word response saying the following...
we’re not going to make Syria into a proxy war between the United States and Russia. That would be bad strategy on our part. This is a battle between Russia, Iran, and Assad against the overwhelming majority of the Syrian people. Our battle is with ISIL, and our battle is with the entire international community to resolve the conflict in a way that can end the bloodshed and end the refugee crisis, and allow people to be at home, work, grow food, shelter their children, send those kids to school. That’s the side we’re on.
This is not some superpower chessboard contest. And anybody who frames it in that way isn’t paying very close attention to what’s been happening on the chessboard.
... actually a superpower chessboard contest is precisely what this is, and while Obama can argue whether or not Putin is outsmarting him, someone else on the global chessboard is smelling blood. That someone is China, and this time China, which as we profiled before is aligning itself not with the US but with Russia in the Syria proxy war - because that's precisely what it is - targeted not the US foreign policy failures, but Obama's domestic problems, namely the "routine" series of mass shootings taking place in the US which according to an Op-Ed in China's premier media outlet, Xinhia, "exposes failure of US politics."
Here is the full Op-Ed posted by Xinhua's editors:
Obama's "routine" on mass shooting exposes failure of U.S. politics
The Americans were startled once again when tragic news break out about the deadly campus shooting in Oregon on Thursday.
However, the United States is "the only advanced country on earth that sees these kinds of mass shootings every few months," just like President Barack Obama has painfully acknowledged.
Obama, angry and frustrated, criticized that the nation's response to mass shootings has become "routine," from press coverage, to his own comments, to the fruitless debate over gun control.
It is obvious that the country has grown "numb" to mass shootings like Thursday's incident in Oregon, where a 20-year-old gunman killed at least nine people at a community college.
There have been 296 shootings so far this year in the United States, claiming more than 370 innocent lives, and it was the 15th time Obama has pleaded for gun control legislation since taking office in 2009.
How come a country as powerful as the United States has been unable to stop this kind of brutal attacks against innocent civilians?
The problem is deeply rooted in the country's political system, where bipartisan politics and interest groups exert huge influence, to the point that security of the American people have to give way to political correctness and corporate interests.
Opinion polls have repeatedly shown that an overwhelming majority of Americans favor stricter gun control rules, yet no legislation on that front can be expected in the near future.
Even the Newtown massacre in 2012 that killed 20 children and six adults failed to break the impasse in Washington over gun control.
The biggest surprise to the world in the wake of Oregon shooting is that there was no surprise for such cold-blooded murders to happen again and again in the United States.
Defects in the U.S. political system have not only caused inaction, but also panic that alarmed the world, as an imminent government shutdown resulting from political wrestle on the Capitol Hill last month posed danger to both the U.S. economy and the world market.
The recurrent mass shootings in the United States deserve real reflection and pondering, since those innocent lives cannot be lost in vain.
Yes, China - that paragon of human rights - is openly mocking the US for its own domestic policy failings. Because in the grand chessgame which Obama refuses to acknowledge, it is not so much what China says, but that it says it in the first place - something which confirms the elephant in the room, and yet which few are willing to discuss: US standing in the international arena, especially through the lens of the "other" superpowers, has rarely sunk this low.
And if Obama's "non-chess" competitors don't respect him, how can the US president hope to impose the national interests of those whose interests he truly represents - as even China openly points out - namely US corporations and Wall Street companies, on the global arena?
If you’re a mega corporation, one of the most annoying things about employees is that they expect to be paid for their work and as if that’s not enough, they also tend to draw a parallel between the performance of the company and what their labor is worth.
Fortunately, the combination of ZIRP-assisted, EPS-inflating buybacks and the relative powerlessness of the American worker has served to preserve the divide between corporate management and everyday employees, but every once in awhile, beleaguered laborers start to get the idea that they’re entitled to a greater share of what they effectively create and that translates directly into calls for higher wages.
This situation is exacerbated when the peasantry gets together in the form of organized labor which unfairly seeks to deprive management of its capitalistic right to keep almost all of the profits from the widgets their employees produce.
Given the above, it comes as no surprise that the subprime loan-assisted boom in auto sales has auto workers asking for a larger piece of the pie. Here’s WSJ:
Automobiles flew off dealer lots last month at the fastest pace in 10 years, but the good times are stirring tension between U.S. auto makers and their unionized workers that threatens to undercut the industry’s rebound.
United Auto Workers union members at Fiat Chrysler Automobiles NV this week rejected for the first time in three decades a tentative agreement as inadequate, and Ford Motor Co. faces a walkout at a big truck factory as soon as Sunday.
As buyers flood dealer lots, snapping up pricey pickups and sport-utility vehicles that deliver fat profits to General Motors Co., Ford and Fiat Chrysler, factory workers are demanding an end to the concessions that put the U.S. industry back on its feet after near collapse seven years ago.
“We got a catered meal of hot dogs and hamburgers as our thanks while others, I’m sure, got big bonuses,” said Phil Reiter, a 44-year-old union member referring to a recent production milestone at Fiat Chrysler’s Toledo, Ohio, Jeep factory. That plant on Tuesday rejected a UAW supported contract by a more than 4-to-1 ratio.
And while “a catered meal of hot dogs and hamburgers” should clearly be enough, these greedy assembly line workers still want more, which of course means that the auto industry needs to simply stop hiring them:
On Thursday, the UAW confirmed that 65% of its Fiat Chrysler members spurned Fiat Chrysler’s offer, the first time in more than 30 years a proposed bargaining deal was voted down. The decision is a blow to the UAW, which has tried to reverse a persistent decline in union auto jobs by accepting concessions.
Obviously, we've employed a bit of sarcasm in our presentation here, but the simple fact is that no matter what side of the organized labor debate you fall on, the situation depicted in the following graphic simply isn't sustainable...
...but we imagine that in today's jobs market, workers' complaints may fall on largely deaf ears because after all, manufacturing jobs clearly aren't important when it comes to sustaining America's feudal "robust" economic recovery:
By Dana Lyons, partner at J. Lyons Fund Management
Stock Market Reaches Key Post-Crash Milestone
The average retest period following crashes similar to that in August have bottomed an average of 27 days after the crash…that would be Friday .
On September 4, we posted a chart showing the path of the S&P 500 following other “crashes” since 1950 that were similar to that which occurred at the end of August. Our goal was to lay out a general road map for how the index might behave in the weeks following the initial August 25 low. Specifically, we looked at drops in the S&P 500 of at least 10% within 10 days.
As it turns out, we identified 11 prior unique crash occurrences. Among the 11, 2 of them – July 1974 and September 2008 – continued to cascade lower, nearly unabated, for several more months. The other 9 resulted in an initial low in relatively short order. Here is the chart from that September 4 post:
What general takeaways did the chart present us? Here are a few noteworthy items that we wrote in the prior post:
- Of the 9, there was just 1 “V-Bottom” – September 2001 – that was never subject to a retest.
- The other 8 all went on to test the initial low at some point.
- 5 of the 9 eventually dropped below the initial low, if only marginally.
- The quickest retest/bottom process came after the March 2001 decline and lasted just 9 days.
- The longest bottoming process – following the July 2002 crash – lasted 55 days.
- ****The average bottoming process lasted 27 days (which would equate to October 2 in our present situation).****
- The median bounce between the initial low and the end of the bottoming process was +10%. That would equate to 2056 in our current circumstances.
- The majority of the crashes (5) came after significant damage had already been done, i.e., the S&P 500 was anywhere from -7% to -25% below its 52-week high when the crash began.
- The other 4 (1987, 1998, 2000 and 2011) began from within 2.6% of the S&P 500?s 52-week high. The recent crash started at just -1.25% below the 52-week high.
Our conclusion from that piece was this:
This examination would loosely suggest that the current bottoming process (assuming we are in one) may possibly persist for another month, with a possible higher bounce along the way before a possible retest of the August 25 lows.
Obviously we don’t like to feign certainty when dealing with markets, only probabilities and possibilities. Well, flash ahead to Friday and we see that the path of the S&P 500 has fairly closely followed the path of “possibilities” suggested by the prior post-crash events, i.e., a rally followed by a retest. Whether the retest of the past few days will be successful (i.e., hold) or not is obviously yet to be determined.
Related to that point, you will notice the significance of Friday, October 2, as it pertains to the asterisked bullet listed above. That is, the previous post-crash instances took an average of 27 days following the crash before they bottomed for good (as defined by “leading to a sustained multi-month rally”). 27 days following the August 25 crash low is Friday. We do not in any way expect that the current post-crash pattern will conform precisely to the average or median or any of the previous post-crash periods specifically. However, it does seem to be as good a time as any to update the chart to check on the S&P 500?s progress and its correlation to prior events. As mentioned above, it has followed the general path fairly closely.
Friday obviously cannot be THE low since it doesn’t appear that prices will eclipse the low from Tuesday by the end of the day. However, if Tuesday was the low (not a guarantee), it did occur in close proximity to the 27-day average of prior events. More importantly, the path of the S&P 500 has followed the general post-crash path that we laid out a month ago.
Again, whether or not the market has put in a post-crash bottom is yet to be determined. But we can see by this study that examining past patterns and price behavior attached to specific circumstances can be instructive of the reaction that prices may undergo in similar circumstances in the future. This is likely due to human nature. No matter what era one is dealing with, people will respond to various stimuli in a consistent and somewhat predictable fashion. And while we will never be able to predict price action with absolute precision, this kind of study can aid us in managing the probabilities in various situations. It certainly has aided us over the past month.
One question that’s been asked repeatedly over the past thirteen months is why Washington has been unable to achieve the Pentagon’s stated goal of “degrading and defeating” ISIS despite the fact that the “battle” pits the most advanced air force on the planet against what amounts to a ragtag band of militants running around the desert in basketball shoes.
Those of a skeptical persuasion have been inclined to suggest that perhaps the US isn’t fully committed to the fight. Explanations for that suggestion range from the mainstream (the White House is loathe to get the US into another Mid-East war) to the “conspiratorial” (the CIA created ISIS and thus doesn’t want to destroy the group due to its value as a strategic asset).
The implication in all of this is that a modern army that was truly determined to destroy the group could likely do so in a matter of months if not weeks and so once Russia began flying sorties from Latakia, the world was anxious to see just how long the various rebel groups operating in Syria could hold up under bombardment by the Russian air force.
The answer, apparently, is “less than a week.”
On Saturday, the Russian Ministry of Defense said it has conducted 60 bombing runs in 72 hours, hitting more than 50 ISIS targets.
According to the ministry (Facebook page is here), Islamic State fighters are in a state of “panic” and more than 600 have deserted.
Here's what happens when the Russians locate a terrorist "command center":
According to The Kremlin, the structure shown in the video is (or, more appropriately, "was") "an ISIS hardened command centre near Raqqah." Su-34s hit it with concrete-piercing BETAB-500s setting off a series of explosions and fires that "completely destroyed the object."
Surgical airstrikes by Russian fighter jets have knocked out a number of Islamic State installations in Syria, including the battle headquarters of a jihadist group near Raqqa, according to the Russian Defense Ministry.
“Over the past 24 hours, Sukhoi Su-34 and Su-24M fighter jets have performed 20 sorties and hit nine Islamic State installations,” Igor Konashenkov, Russia’s Defense Ministry spokesman, reported.
Konashenkov added that yesterday evening Russian aircraft went on six sorties, inflicting strikes on three terrorist installations.
“A bunker-busting BETAB-500 air bomb dropped from a Sukhoi Su-34 bomber near Raqqa has eliminated the command post of one of the terror groups, together with an underground storage facility for explosives and munitions,” the spokesman said.
Commenting on the video filmed by a Russian UAV monitoring the assault near Raqqa, Konashenkov noted, “a powerful explosion inside the bunker indicates it was also used for storing a large quantity of munitions.
“As you can see, a direct hit on the installation resulted in the detonation of explosives and multiple fires. It was completely demolished,” the spokesman said.
And here's the Russian Defense Ministry taking a page out of the US Postal Service's "neither rain, sleet, snow, nor hail" book on the way to serving notice that nothing is going to stop the Russian air force from exterminating Assad's enemies in Syria:
Twenty-four hours a day #UAV's are monitoring the situation in the ISIS activity areas. All the detected targets are effectively engaged day and night in any weather conditions.
Now obviously one must consider the source here, but Kremlin spin tactics aside, one cannot help but be amazed with the pace at which this is apparently unfolding. If any of the above is even close to accurate, it means that Russia is on schedule to declare victory over ISIS (and everyone else it looks like) in a matter of weeks, which would not only be extremely embarrassing for Washington, but would also effectively prove that the US has never truly embarked on an honest effort to rid Syria of the extremist groups the Western media claims are the scourge of humanity.
Summed up in 10 priceless seconds...
There is a growing divide in the country and day by day it grows deeper and more irrevocable. All around us we see the signs, if we look for them, of decay and collapse built into the very system itself.
If you reward indolence, it will become the norm, if we practice wholesale slaughter from the womb to a foreign wedding party others will take the cue. If we celebrate slatterns and degenerates and ridicule the wholesome and traditional we will wind up with more of one and less of another.
The further an organism lives from it’s natural state, the more adaptable the organism will become to that which is unnatural.
Yesterday an older farmer came to pick up his cow from my farm. She had been a guest of ours for several days to be bred by my bull and when he arrived I asked him to pull his trailer to the lower trail beside the stream and open the rear door. I explained that I would be opening a gate from one pasture and leading the animals to another, that his animals- the cow and her young heifer- would follow at the rear of the herd and when he saw them approach he would simply close the pasture gate behind them and allow them to load back in his trailer. The cattle dogs watched my every move, excited to work and anxious for their opportunity to show off to my friend. I called out to the cows- mooing to them from the trailhead- and they quickly assembled at the gate, mooing in return.
I opened the gate, placing my hands with palms extended behind me and walked them along the trail towards the upper field. The dogs, without instruction, took up places at the right and left of the herd, keeping a close eye on the calves. When the last calves passed through the gates the dogs trotted alongside them without a sound and followed them the length of the passage. My friend stood by his trailer watching for his animals and as my herd moved into the upper pasture they spread out and put their heads down to the grass walking slowly uphill.
The calves, younger and full of energy shot ahead past his animals and sprinted through the gate to catch up with their mothers on the green field and like clockwork his two cows passed the edge of his trailer and made a sharp right and climbed into the trailer without a hitch. The dogs came in for a pat and a couple of “good dogs!”, panting happily.
He shut the door behind them and looked at me with a rare smile on his face, genuine and slightly surprised.
Any cow in it’s natural state, well fed, not stressed, kept on pasture rather than in confinement and handled with respect are trouble free. They thrive. They get along. They breed easily, deliver strong calves, put on muscle with ease, and are generally a pleasure to be around. Human beings share a very similar set of needs and requirements as most domesticated livestock- domesticated livestock being a creation of humans, adapted to human use and care throughout the centuries and to human habits and behaviors.
In progressive farming- yes, that’s what industrial agriculture calls itself- animals are kept in confinement, fed diets that contain little or no grass in order to fatten them quickly not with protein rich muscle but with tallow. They are pumped full of antibiotics- not to keep sickness at bay but to kill the digestive microbes in their guts so that each pound of feed is more readily converted to a pound of fat. They stand not in fields of grass but in knee deep paddocks filled with manure. They are moved about not by family farmers who have known them since birth, respectfully and with ease, but by hirelings who shout and push them and use taser like devices to shock them into compliance from on overcrowded paddock to another, filled with fear, their bodies flooded by hormones before slaughter.
How do we fail to make the connection? How do we not see that the further we drift from what we were meant to be and to do as human beings the more we become disoriented, obese, dysfunctional, angry, depressed, violent or passive in the extreme. These responses are the natural outcome of unnatural circumstances and we should be in no way surprised that the more we extol and promote such systems the more often we will see such behaviors. It isn’t surprising, it doesn’t require any in depth studies or introspection beyond the obvious.
We are a product of our time and place. We live in a dystopian future that makes Brave New World look positively mundane in comparison. Mass shootings are the natural outcome of a society that mentally shackles its population while pumping it full of psychotropic drugs and violent imagery. It tells us to turn away from bullying while it dumps payloads of high explosives on hospitals and schools. It tells us to empathize with women while objectifying them via pornography and then denies young adult males the benefits of a loving wife and family unless he meets an impossible standard or forces him in direct competition with females both academically and in the workplace, putting off family formation until such a time as a woman is near menopause.
I could go on but you get the picture.
What is happening is- in my opinion- is engineered. You couldn’t do more if you personally placed the gun in the young man’s hand and gave him a lawful order to kill everyone in that school- and ironically is that not what we do to our drone pilots, only in different locations?
We are being led, deliberately and inexorably to the abattoir. The only question is, are you willing to submit?
With Germany's largest company by revenue, Volkswagen, deep in damage recovery mode, and the market still unable to decide just how systemic and profound the fallout will be from the emissions scandal which has already cost the job of VW's CEO and which according to some will impact the GDP of Hungary and the Czech republic as much as -1.5%, many are still trying to determine not if but how many other companies - whether "clean diesel" focused or otherwise - will be impacted by the crackdown on emissions fraud.
We don't know the answer suffice to speculate that it will be "many" for one simpler reason: there are dozens of ways to manipulate emissions tests in both the lab and on the road, and with the temptation to "reduce" emissions all too great for management teams laser-focused on boosting profit margins, one can be certain that in this particular case not only is there more than one cockroach, there are dozens.
The chart below from Transport and Environment shows some of the traditional ways in which carmakers manipulate CO2 emissions tests to make their cars appear more efficient:
Worse, according to a follow-up report, it is only a matter of time before far more widespread crackdowns take place within the auto industry where emissions fraud now appears as systemic as that of the global banking sector.
As reported earlier this week, the gap between official test results for CO2 emissions/fuel economy and real-world performance has increased to 40% on average in 2014 from 8% in 2001, according to T&E’s 2015 Mind the Gap report, which analyses on-the-road fuel consumption by motorists and highlights the abuses by carmakers of the current tests and the failure of EU regulators to close loopholes. T&E said the gap has become a chasm and, without action, will likely grow to 50% on average by 2020.
By exploiting loopholes in the test procedure (including known differences between real-world driving and lab simulations) conventional cars can emit up to 40-45% more CO2 emissions on the road than what is measured in the lab. But the average gap between test results and real-world driving is more than 50% for some models. Mercedes cars have an average gap between test and real-world performance of 48% and their new A, C and E class models have a difference of over 50%. The BMW 5 series and Peugeot 308 are just below 50%. The causes of these big deviations have to be clarified as soon as possible.
Greg Archer, clean vehicles manager at T&E, said: “Like the air pollution test, the European system of testing cars to measure fuel economy and CO2 emissions is utterly discredited. The Volkswagen scandal was just the tip of the iceberg and what lies beneath is widespread abuse by carmakers of testing rules enabling cars to swallow more than 50% more fuel than is claimed.”
Greg Archer concluded: “This widening gap casts more doubt on how carmakers trick their customers in Europe to produce much better fuel efficiency in tests than can be achieved on the road. The only solution is a comprehensive investigation into both air pollution and fuel economy tests and all car manufacturers to identify whether unfair and illegal practices, like defeat devices, may be in use. There must also be a comprehensive overhaul of the testing system.”
Who are the biggest European culprits.
The cost: distorted laboratory tests cost a typical motorist €450 a year in additional fuel costs compared to what carmakers’ marketing materials claim, the report finds.
Now multiply that by tens of millions of cars and you get a sense of the potential industry liability, especially since can be absolutely certain Europe's US carmaking peers are just as guilty of emissions manipulation.
Finally, to paraphrase Dr. House, everybody lies.
By SM Gibson of Antimedia
One of the United States’ strongest allies is currently inflicting as much carnage as any other nation in the world. Instead of being vilified for their part in a staggering amount of human rights atrocities, the critics go mute and the bloodshed is rewarded. The news regarding Saudi Arabia this week is too abundant to include in any one headline.
According to UNICEF, the ongoing attacks by a U.S.-backed, Saudi Arabian-led coalition in Yemen have resulted in the deaths of at least 505 children since March 26, 2015. Another 710 have been left injured, and 1.7 million are at risk of malnutrition. As Daniel Johnson with the U.N. pointed out, the grievous numbers are equivalent to eight children killed or maimed in Yemen every day for six months.
On Monday, a missile from a Saudi-led airstrike struck a Yemeni wedding reception in the village of Al-Wahijah, located near the Red Sea. The explosion resulted in 131 deaths, and the incident is being labeled as one of the deadliest attacks on civilians during the six-month conflict.
In total, there have been 7,217 civilian casualties, including 2,355 killed and 4,862 wounded in the six months since the fighting began, according to the United Nations.
Despite these statistics, the Minister for Foreign Affairs of Saudi Arabia — while addressing the United Nations General Assembly on Thursday evening — had the audacity to scold the international community’s inability to end the bloodshed in Syria. Abdel Ahmed Al-Jubeir hypocritically stated that the world has been “unable to save the Syrian people from the killing machine that is being operated by Bashar al-Assad.”
It gets worse.
Last month, it was announced that Saudi Arabia would head the U.N. Human Rights Council (yes, you read that correctly) — a decision that mirrors unfathomable satire. According to cables released by Wikileaks, Saudi Arabia — along with their despicable human rights record — originally made their way on to the council under very questionable circumstances in 2013. The cables allege that a vote-trading deal was made in secret between Britain and Saudi Arabia to ensure both countries were elected to the council.
Days prior to the announcement that Saudi Arabia would head the UNHRC, the Saudi regime released their decision to deny the final appeal of 20-year-old Ali Mohammed al-Nimr. Aged 17 at the time of his arrest, the pro-democracy activist will be executed for taking part in an anti-government protest in 2012. Despite pleas from human rights organizations around the globe, it has been ruled that the young man will be put to death by way of crucifixion any day now.
Even the U.N. has called for the Saudis to halt the execution. Yes, the same U.N. whose Human Rights Council they now head.
So far in 2015, Saudi Arabia has executed at least 134 people, according to Amnesty International — most of those by beheading.
“It is scandalous that the UN chose a country that has beheaded more people this year than ISIS to be head of a key human rights panel,” said UN Watch executive director Hillel Neuer. “Petro-dollars and politics have trumped human rights.”
A number of U.S. politicians have recently been asked to weigh-in on Saudi Arabia and their obvious penchant for barbarity by journalist Lee Fang, from The Intercept.
“They may be bombing civilians, which is actually not true,” Senator John McCain said when asked about civilian casualties in Yemen.
“Civilians aren’t dying?” Fang asked.
“No, they’re not,” the senator replied. “Oh, I’m sure civilians die in war. Not nearly as many as the Houthis have executed.”
Fang also approached Sen. Chris Coons, (D-Del) and asked him to comment on the Saudi-led airstrikes in Yemen.
“As the co-founder of the Human Rights Caucus in the Senate, I do think we need to pay attention to human rights all over the world, regardless of where human rights violations arise,” Coons said.
When the Fang pressed the senator to elaborate on Saudi Arabia specifically, Coons immediately ended the conversation.
“Coons ignored me and continued walking into the building, even though a staff member accompanying him had just informed the senator that he had “plenty of time” before his speech. The staff member offered to exchange contact information for a lengthier comment later. I emailed and did not hear back,” according to Fang.
In case you are left pondering why you hear corporate news outlets harp on about the incivilities of numerous Middle Eastern nations ad nauseum (while the brutalities carried out by Saudi Arabia are never uttered), it is worth mentioning — coincidental or not — that the 2nd largest stockholder in Fox News (21st Century Fox) is a man by the name of Prince Alwaleed Bin Talal. The prince, who just so happens to be a member of the Saudi royal family, is also a prominent stockholder in Citigroup and Twitter.
The Largest US Foreign Policy Blunder Since Vietnam Is Complete: Iran Readies Massive Syrian Ground Invasion
On Thursday, in “Mid-East Coup: As Russia Pounds Militant Targets, Iran Readies Ground Invasions While Saudis Panic”, we attempted to cut through all of the Western and Russian media propaganda on the way to describing what Moscow’s involvement in Syria actually portends for the global balance of power. Here are a few excerpts that summarize what’s taking shape in the Middle East:
Putin looks to have viewed this as the ultimate geopolitical win-win. That is, Russia gets to i) expand its influence in the Middle East in defiance of Washington and its allies, a move that also helps to protect Russian energy interests and preserves the Mediterranean port at Tartus, and ii) support its allies in Tehran and Damascus thus preserving the counterbalance to the US-Saudi-Qatar alliance.
Meanwhile, Iran gets to enjoy the support of the Russian military juggernaut on the way to protecting the delicate regional nexus that is the source of Tehran’s Mid-East influence. It is absolutely critical for Iran to keep Assad in power, as the loss of Syria to the West would effectively cut the supply line between Iran and Hezbollah.
It would be difficult to overstate the significance of what appears to be going on here. This is nothing short of a Middle Eastern coup, as Iran looks to displace Saudi Arabia as the regional power broker and as Russia looks to supplant the US as the superpower puppet master.
In short, the Pentagon’s contention that Russia and Iran have formed a Mid-East “nexus” isn’t akin to the Bush administration’s hollow, largely bogus attempt to demonize America’s foreign policy critics in the eyes of the public by identifying an “axis of evil.” Rather, the Pentagon’s assessment was an attempt to come to grips with a very real effort on the part of Moscow and Tehran to tip the scales in the Mid-East away from Riyadh and Washington.
Solidifying the Assad regime in Syria serves to shore up Hezbollah and presents Tehran with an opportunity to assert itself in the name of combatting terror. The latter point there is critical. The West has long contended that Iran is the world’s foremost state sponsor of terror, and the Pentagon has variously accused the Quds Force of orchestrating attacks on US soldiers in Iraq after cooperation between Washington and Tehran broke down in the wake of Bush’s “axis of evil” comment.
Indeed, Iran was accused of masterminding a plot to kill the Saudi ambassador at a Washington DC restaurant in 2011.
Now, the tables have turned. It is the US, Saudi Arabia, and Qatar who stand accused of sponsoring Sunni extremists and it is Iran, and specifically the Revolutionary Guard, that gets to play hero.
Of course this would be largely impossible without Moscow’s stamp of superpower approval. The optics around the P5+1 nuclear deal were making it difficult for Tehran to be too public in its efforts to bolster Assad. That doesn’t mean Tehran’s support for the regime in Syria hasn’t been well documented for years, it simply means that Iran needed to observe some semblance of caution, lest its role in Syria should end up torpedoing the nuclear negotiations. Now that Moscow is officially involved, that caution is no longer obligatory and Iran is now moving to support Russian airstrikes with an outright ground incursion (just as we’ve been saying for weeks). Here’s WSJ:
Iran is expanding its already sizable role in Syria’s multisided war in the wake of Russia’s airstrikes, despite the risk of antagonizing the U.S. and its Persian Gulf allies who want to push aside President Bashar al-Assad.
Politicians in the region close to Tehran as well as analysts who have been closely following its role in Syria say a decision has been made, in close coordination with the Russians and the Assad regime, to increase the number of fighters on the ground through Iran’s network of local and foreign proxies.
The support also could involve more Iranian commanders, military advisers and expert fighters usually assigned to these units, these people said.
Wiam Wahhab, a former Lebanese minister allied to Iran and Mr. Assad, stressed that Iran wouldn’t be dispatching troops in the conventional sense. Instead, they were likely to be officers and advisers from the Islamic Revolutionary Guard Corps, or IRGC, he said.
“I know there is a major battle upon us and everything needed for this battle will be made available,” said Mr. Wahhab, who has some members from his own political party fighting in Syria alongside the regime. “There is a plan to carry out offensive operations in more than one spot.”
Experts believe Iran has some 7,000 IRGC members and Iranian paramilitary volunteers operating in Syria already.
Separate from the regular army, the IRGC was founded in the aftermath of the 1979 revolution as an ideological “people’s army” reporting directly to the supreme leader, Iran’s top decision maker.
The more than 100,000-strong force controls a vast military, economic and security power structure in Iran and is in charge of proxies across the region. Its paramilitary organization, the Basij, was the lead force in the crackdown on pro-democracy demonstrators in 2009.
Since late 2012 Iran has played a lead role in organizing, training and funding local pro-regime militias in Syria, many of them members of Mr. Assad’s Alawite minority, a branch of Shiite Islam. Experts believe they number between 150,000 and 190,000—possibly more than what remains of Syria’s conventional army.
What’s more, some experts estimate 20,000 Shiite foreign fighters are on the ground, backed by both Shiite Iran and its main proxy in the region, the Lebanese Shiite militia Hezbollah.
About 5,000 of them are new arrivals from Iraq in July and August alone, said Phillip Smyth, a researcher at the University of Maryland. He said this figure was compiled through his own contacts with some of these fighters, flight data between Baghdad and Damascus as well as social media postings. “It looks like it was timed out to coincide with the Russian move,” Mr. Smyth said.
Yes, it certainly does "look like" that, and it wasn't hard to see this coming. Here's another excerpt from our recent analysis:
Back in June, the commander of Iran’s Quds Force, Qasem Soleimaini, visited a town north of Latakia on the frontlines of Syria’s protracted civil war. Following that visit, he promised that Tehran and Damascus were set to unveil a new strategy that would “surprise the world.”
Just a little over a month later, Soleimani - in violation of a UN travel ban - visited Russia and held meetings with The Kremlin.
Make no mistake, this is shaping up to be the most spectacular US foreign policy debacle since Vietnam - and we don't think that's an exaggeration.
The US, in conjunction with Saudi Arabia and Qatar, attempted to train and support Sunni extremists to overthrow the Assad regime. Some of those Sunni extremists ended up going crazy and declaring a Medeival caliphate putting the Pentagon and Langley in the hilarious position of being forced to classify al-Qaeda as "moderate." The situation spun out of control leading to hundreds of thousands of civilian deaths and when Washington finally decided to try and find real "moderates" to help contain the Frankenstein monster the CIA had created in ISIS (there were of course numerous other CIA efforts to arm and train anti-Assad fighters, see below for the fate of the most "successful" of those groups), the effort ended up being a complete embarrassment that culminated with the admission that only "four or five" remained and just days after that admission, those "four or five" were car jacked by al-Qaeda in what was perhaps the most under-reported piece of foreign policy comedy in history.
Meanwhile, Iran sensed an epic opportunity to capitalize on Washington's incompetence. Tehran then sent its most powerful general to Russia where a pitch was made to upend the Mid-East balance of power. The Kremlin loved the idea because after all, Moscow is stinging from Western economic sanctions and Vladimir Putin is keen on showing the West that, in the wake of the controversy surrounding the annexation of Crimea and the conflict in eastern Ukraine, Russia isn't set to back down. Thanks to the fact that the US chose extremists as its weapon of choice in Syria, Russia gets to frame its involvement as a "war on terror" and thanks to Russia's involvement, Iran gets to safely broadcast its military support for Assad just weeks after the nuclear deal was struck. Now, Russian airstrikes have debilitated the only group of CIA-backed fighters that had actually proven to be somewhat effective and Iran and Hezbollah are preparing a massive ground invasion under cover of Russian air support. Worse still, the entire on-the-ground effort is being coordinated by the Iranian general who is public enemy number one in Western intelligence circles and he's effectively operating at the behest of Putin, the man that Western media paints as the most dangerous person on the planet.
As incompetent as the US has proven to be throughout the entire debacle, it's still difficult to imagine that Washington, Riyadh, London, Doha, and Jerusalem are going to take this laying down and on that note, we close with our assessment from Thursday:
If Russia ends up bolstering Iran's position in Syria (by expanding Hezbollah's influence and capabilities) and if the Russian air force effectively takes control of Iraq thus allowing Iran to exert a greater influence over the government in Baghdad, the fragile balance of power that has existed in the region will be turned on its head and in the event this plays out, one should not expect Washington, Riyadh, Jerusalem, and London to simply go gentle into that good night.
The unexpectedly poor September US jobs data weakened the greenback's technical tone, as questions about the underlying strength of the world's largest economy, and the implications for the Fed's take-off, intensify. The economic data the US is scheduled to release in the week ahead are not of sufficient heft to alter the pessimism that was spurred, but not caused, by the jobs data. Recall that earlier in the week, the US reported it new flash reading on merchandise trade. The unexpectedly large deficit caused the Atlanta Fed's GDPNow to halve its estimate for Q3 growth to 0.9%.
No fewer than five Fed officials will speak next week and the FOMC minutes from its September meeting will be released. The former will give an opportunity to both hawks and doves to provide their economic assessments in light of the recent economic developments. The latter will provide some color on 1) how close the decision was to defer lift-off; 2) how confident they were that rates could still go up this year; and 3) which particular global developments are especially worrisome for the conduct of monetary policy.
The dollar's recovery after initially selling off on the data surprise mitigated some the technical damage that had been inflicted earlier. The Dollar Index held above the 61.8% retracement objective of the rally from the September 18 lows, which is found near 95.10. The trend line connecting the August 24 and September 18 low came in near 94.75 (corresponds to the lower Bollinger Band) before the weekend (and almost 95.20 at the end of next week). A break of that trendline could spur a move toward the critical 94.00 area. The RSI is pointing lower, and the MACDs are poised to turn lower. On the upside, a move back above 96.00 would lift the tone while the 96.50-96.70 area has to be retaken to put the bulls back in control.
The euro was rose from the lower end of its range to the upper end by the US jobs data. It stalled at the upper end of its two-week range near $1.1330. This area corresponds to the downtrend line drawn off the August 24 spike high (~$1.1715) and the September 18 high (~$1.1460). A break of this trendline would likely signal a move toward $1.1400 initially. The $1.1475 area, however, key. A convincing break could spur a move to the August 24 high, if not a bit higher. The RSI has turned higher, and the MACDs are poised to do the same. On the downside, a loss of the $1.1180 neutralizes the technical condition.
Since late-August the dollar has been tracing out a large symmetrical triangle pattern against the yen. About three-quarters of the time, this pattern is a continuation pattern. In the current context, this means a downside break for the dollar. The other point that needs to be made is that this pattern is subject to false breaks. And that is precisely what has happened on the past two Friday's. On September 25, the dollar broke to the upside on an intraday basis only to close back within the triangle pattern. This past Friday, the employment shock saw the dollar break to the downside only to recovery back within it. The parameters of the pattern begin the new week around JPY120.75 and JPY119.40. At the end of next week, they are close to JPY120.60 and JPY119.60.
The sideways trading has neutralized the technical indicators we use. We do recognize that the triangle pattern can be resolved by neither breaking higher or lower, but continuing to move sideways through the apex of the pattern. We often experience the yen as a rangebound currency, and when it looks like it is trending, it is moving from one range to another. In this scenario, the price after the US jobs data reaffirmed the importance of the JPY118.60 support area.
Sterling closed September with its second nine-session losing streak since August 24. The miniscule gain on October 1 was extended the next day, spurred by the US jobs report. It stalled in front of the week's highs in the $1.5240-$1.5260 area. The RSI and MACDs favor additional gains, but sterling's inability to sustain a move above $1.52 casts doubts on the bullish technical case. The key to the upside is the $1.5320-$1.5330 area, which corresponds to a retracement objective and the 20-day moving average. The Bank of England meets next week; McCafferty was probably unsuccessful in getting others to join his call for an immediate hike.
The Australian dollar gained about 0.25% against the US dollar last week. It failed to capitalize on a relatively favorable string of domestic data including an uptick in the manufacturing PMI, home sales, and retail sales. The technical indicators are not generating strong signals presently. The break of the $0.6980-$0.7085 range signals the direction of the next cent or so. The Reserve Bank of Australia meets. There is no urgency for it to act.
The technical tone of the Canadian dollar is superior to the Australian dollar. It held on to its post-US jobs data gains to post a 1.0% advance against the US dollar over the past week. The US dollar's pre-weekend losses carried it to the CAD1.3185 area, which corresponds to the 61.8% retracement of the last leg up for the greenback that began on September 18 and ended with new 11-year highs on September 29.
A trendline connecting the June 18 low (~CAD1.2130) and the September 18 low (~CAD1.3015) comes in near CAD1.3140 at the start of next week. It rises toward CAD1.3205 by the end of the week. A break this trendline suggests a move toward CAD1.3000. On the upside, a move back above CAD1.3250-CAD1.3270 points to the end of the Canadian dollar recovery.
The November light sweet crude oil futures contract continues to carve out a descending triangle pattern. The top is formed by connecting the highs from August 31 (~$50.05) and September 17 (~$48.05). The bottom of the triangle is flat in the $43.60-70 area. It broke to the top side on an intraday basis on October 1. It was sustained on a closing basis, and the contract returned to the low end after the poor US jobs data that raised concerns about demand. The strong close before the weekend, amid news of an additional decline in rigs, suggests a retest on the top of the triangle is likely in the days ahead. The $46.50 area may draw prices.
The US 10-year yield fell to 1.90% after the employment data disappointment. This matches the low from August 24. The technical indicators warn of the risk of lower yields still but we suspect the data in the week ahead will not provide the justification for a new leg lower. Initially, we see potential back into the 2.05%-2.08% area. A test on the more important 2.15% area may require more important data, and/or stronger gains in equities.
The S&P 500 posted an outside up day before the weekend. It traded on both sides of the previous day's range and closed above the high (~1927). It strengthens the technical significance of the 1871 low seen earlier last week. We warned last week that a break of 1900 would yield 1870. This objective was met, seemingly exhausting the immediate selling pressure. The next targets on the upside are in the 1963 area. Overcoming them would lift the tone and begin healing some of the technical damage inflicted in recent weeks.
Observations based on speculative positioning in the futures market:
1. There were three significant gross position adjustments by speculators in the CFTC reporting week ending September 29. Another 10.2k short yen contracts were covering, leaving 61.8k contracts, the lowest since May. Speculative positioning in the Mexican peso accounts for the other two significant adjustments. Essentially the longs switched to shorts. The gross long position was cut by a third of 16.4k contracts (leaving 31.3k), and the gross short position rose by 15.7k contracts (to 75.7k).
2. To the extent there was an overall pattern, it was the trimming of gross long positions. There were two exceptions. The gross long sterling position increased by 4.8k contracts to 49.8k. The gross long Australian dollar position rose by 1.9k contracts to 44.6k. The gross short position adjustment was evenly mixed among the eight currency futures we track.
3. The rise in the gross long sterling position was overwhelmed by the 8.1k contract increase in the gross short position. This was sufficient to turn the net position back to the short side (-2k contracts) after one week net long.
4. The net 10-year US Treasury futures position (among speculators) switched to the long side for the first time since late-August. It now stands at 22.5k contracts after having been short a net 8.5k the previous reporting week. It is a function of 458.6k gross long contracts, which rose 10% of 44.7k contracts in the latest period. The gross short position rose by 13.7k contracts to 436.1k.
5. Speculators took liquidated 7.7k contracts of oil futures, leaving the bulls with 481.5k contracts. The bears left their position unchanged with 229.8k short contracts. The net position then reflects the gross long adjustment, falling 7.7k contracts to 251.7k.
U.S. Bombs Afghanistan Hospital, Kills At Least 9 Doctors And 3 Children, Calls It "Collateral Damage"
Update 2: the death toll has risen to 16, including 9 hospital staffers and 3 children.
UPDATE: At least 16 people died- nine MSF staff, 7 patients from Intensive care unit, among them three children http://t.co/5puRbAlgXS
— Doctors w/o Borders (@MSF_USA) October 3, 2015
Update: and now the UN is getting involved, which means the US will have to spend even more taxpayer funds on bribes to make the "international community" forget this collateral damage incident and refocus on evil Russia.
#BREAKING: Kunduz air strikes 'inexcusable', 'possibly criminal': UN rights chief
— Agence France-Presse (@AFP) October 3, 2015
* * *
Just when you thought it couldn't get any worse for US foreign policy, or for the credibility of the US state department to slide further, it got much worse.
Less than a day after US ambassador to the UN, uber-warhawk Samantha Power informed Russia of the latest US foreign policy stance by tweeter, when she called "on Russia to immediately cease attacks on Syrian oppo[sition and] civilians" in the latest desperate attempt to halt the Russian campaign against US-created ISIS which may wipe out the terrorist threat in just a few short days, it was the US itself which admitted that early on Saturday the US airforce bombed an Afghan hospital run by the medical aid group Medecins Sans Frontieres, or Doctors without Borders, in the Afghan city of Kunduz in an air strike that killed at least nine people and wounded 37.
It is w/ deep sadness that we confirm so far the death of 9 @MSF staff from bombing last night of MSF’s hospital in Kunduz. 37 Wounded.
— Jason Cone (@jtcone1977) October 3, 2015
As the Executive Director, of Doctors without Borders Jason Cone tweeted, "all parties 2 conflict, including in Kabul & Washington, were clearly informed of precise GPS Coordinates of @MSF facilities in Kunduz" and that the "precise location of @MSF Kunduz hospital communicated to all parties on multiple occasions over past months, including on 9/29."
In other words, this morning's US bombing was nothing more than another example of the utter incompetence, carelessness and disregard for innocent civilian lives that has become a staple hallmark of US foreign policy, something we have already witnessed repeatedly in the past 6 years as a result of the thousands of innocent people dead as part of US drone attacks, also known as "collateral damage."
The attack, which started at 2:15am local time, took place when almost 200 patients and employees were in the hospital, the only one in the region that can deal with major injuries, Medecins Sans Frontieres said.
The aftermath of the US bombing:
At the aid group's bombed-out hospital, one wall of a building had collapsed, scattering fragments of glass and wooden door frames, and three rooms were ablaze, said Saad Mukhtar, director of public health in Kunduz.
A video of the aftermath was also released moments ago:
"Thick black smoke could be seen rising from some of the rooms," Mukhtar said after a visit to the hospital. "The fighting is still going on, so we had to leave."
"We are deeply shocked by the attack, the killing of our staff and patients and the heavy toll it has inflicted on healthcare in Kunduz," the aid group's operations director, Bart Janssens, said in a statement.
"I could hear sounds of heavy gunfire, explosions and airplanes throughout the night," said Khodaidad, who has only one name. "There were several huge explosions and it sounded like the roof was falling on me."
As expected, Doctors without Borders was furious after the attack:
1/ MSF condemns in the strongest possible terms the horrific bombing of its hospital in Kunduz full of staff and patients.
— Jason Cone (@jtcone1977) October 3, 2015
Worse, as Cone adds, the US bombing raid "continued for >30 minutes after American & Afghan military officials in Kabul & Washington first informed of proximity to hospital." Not only was the US bombardment uncalled for, but it continued long after supervisors were made aware they should call it off.
Perhaps the only thing the US military got right was admitting it was responsible for this latest murder of innocent civilians, when it issued a statement acknowledging that it carried out airstrikes, claimed they were conducted "against individuals threatening the force," and conceded that "the strike may have resulted in collateral damage to a nearby medical facility."
Oh well, oops?
Meanwhile the drama at the hospital continues:
— Jason Cone (@jtcone1977) October 3, 2015
While the US tried to justify its latest murder of innocents by supposedly engaging the Taliban, a spokesman Zabihullah Mujahid said U.S. air strikes targeted the hospital, killing killed patients, doctors and nurses adding that "no militant fighter was a patient" the group said. The U.S. military has unleashed twelve air strikes this week in support of government forces in the city. Most airstrikes hit targets on the city's outskirts and the overnight strike was only the second in a central area, the military said.
MSF said it had treated almost 400 patients in the 150-bed hospital since fighting broke out, most for gunshot wounds.
So many patients have flooded in that the hospital has had to put them in offices and on mattresses on the floor. The International Committee of the Red Cross said it was "deeply shocked" by the incident.
"This is an appalling tragedy," said Jean-Nicolas Marti, head of the ICRC in Afghanistan. "Such attacks undermine the capacity of humanitarian organizations to assist the Afghan people at a time when they most urgently need it."
As Glenn Greenwald points out, "it’s impossible to fathom what the U.S. media would be saying and doing if Russia did something like this in Syria. By contrast, the reaction to this airstrike by their own government will be muted and filled with apologia, ironically quite similar to the widely vilified caricature of Jeb Bush’s comments about the Oregon shooting spree: stuff happens."
It's quite possible to "fathom" what the "objective" US media's reaction to this horrific tragedy will be: utter silence. Which, however will not be the reaction from the rest of the world, which with every passing day realizes that when it comes to Pax American, the only this that matters for the Obama administration is appeasing his generous backers from the US military industrial complex which just happen to arm all sides in the conflict. That and the banks who provide the loans, of course.
However, when it comes to the now four-year-long attempt by the US to pass a Qatar gas pipeline under Syria, even if it means crushing the nation, destroying its economy, and unleashing the worst refugee wave in European history, one thing is clear: the US has just lost any US credibility when it comes to criticizing Putin's or anyone else's "attacks on civilians."