Thursday, October 8, 2015

"WTI Crude Surges Back Above $49 After OPEC Comments"

We don't have much to say at the moment.
Oil has been in an uptrend since last Friday's rig count and, as noted in Tuesday's "Oil Prices Climb To Five-Week High" what matters now is: "The next question is where is the top of the new range?"
WTI $49.49 up $1.68.
From ZeroHedge:
WTI Crude has recovered the losses following yesterday's DOE-reported inventory and production rise as it appears comments from OPEC Secretary-General Al-Badri told The IMF that demand will climb more this year than previously projected (coming on the heels of EIA's comments that oil companies worldwide will cut investments in oil exploration and production by a record 20 percent this year.) USD weakness is also helping drive algos to run stops in crude....MORE

Oil: Possible Major Discovery In Israel

Well this is interesting.
If the field is actually under the Golan Heights the ownership is going to be debatable.
Israel took the Golan from Syria in 1967 when Israel was attacked by Syria, Egypt, Jordan, Iraq and Lebanon, supported by

 The PLO
 Saudi Arabia

So Syria, now supported by Russia, Iran, Iraq, Lebanon and China may claim the goo.
Which is the point Russia's mouthpiece RT makes in the second sentence.
From RT:

Huge oil discovery in Golan Heights - Israeli media
A big oil deposit has been found in the Israeli-occupied Golan Heights, with enough reserves to last Israel for decades, according to the country's media.

The Israeli presence in the Golan Heights is in dispute. The region is internationally recognized Syrian territory that has been occupied by Israel since the 1967 Six-Day War between Israel and several Arab states. UN Resolution 242 (1967) demands the withdrawal of Israeli armed forces from the territories occupied in the conflict. Israel disagrees with the wording of the resolution, saying the territories are disputable.

Reportedly, the potential production may reach billions of barrels, while Israel consumes 270,000 barrels per day. Israel currently imports up to three quarters of its oil from the semi-autonomous Kurdish region in Iraq, the Financial Times reported in August. 
"We are talking about a strata which is 350 meters thick and what is important is the thickness and the porosity. On average in the world strata are 20-30 meters thick, so this is ten times as large as that, so we are talking about significant quantities. The important thing is to know the oil is in the rock and that's what we now know," Israel business website Globesquotes Yuval Bartov, chief geologist of Afek Oil and Gas as saying. Afek is a subsidiary of the America’s Genie Energy. 
The reported discovery coincides with the civil war raging in Syria. Israel has been accused of taking advantage of the conflict. The Israeli-occupied Golan Heights also border Syrian territory controlled by anti-government rebels. Israel has reportedly provided medical aid to the rebels and has responded to rocket fire from rebel-controlled territory by striking Syrian Army positions. Israel's explanation has been that it "holds the Syrian military responsible for all events stemming from its territory."
 © United Nations

Computer Simulations Reveal Benefits of Random Investment Strategies Over Traditional Ones

This is a repost from March 2013.

The Joy of Randomness: Central Bank Strategy, Management Technique and Stock Selection
From Technology Review's Physics arXive blog:

Computer Simulations Reveal Benefits of Random Investment Strategies Over Traditional Ones
Central Banks could use random investment strategies to make markets more stable, say econophysicists   

Back in 2001, a British psychologist carried out an unusual experiment in which he asked three people to invest a virtual £5000 in the UK stock market. The three people were a professional trader, an astrologer and a 4 year old girl called Tia.

The results were something of an eye-opener. At the end of the year, the trader had lost 46.2 per cent of the original investment and the astrologer 6.2 per cent. Tia, on the other hand, had made 5.8 per cent. Others have carried out similar experiments with similar results in which investments were chosen by a chimpanzee or by throwing darts.

The implication in these experiments is that random investment strategies are as good as, or even better than, traditional ways of making investments. 

Today, Alessio Biondo from the University of Catania in italy and a few pals test this idea for themselves. These guys have simulated the performance of four traditional strategies using 10 years of historical data from the UK, German and US stock markets. They then compare the results with those from an entirely random strategy.

The traditional approaches are all based on the past performance of the market and include, for example, the “momentum strategy” which measures how fast the price of something has changed in the recent past and then uses this to predict how much it will change in the near future. Another approach is called the “up down strategy” in which the prediction for tomorrow’s market behaviour is exactly the opposite of today’s....MORE  
We've looked at the phenomena  in a couple other contexts:

Random Stock Selection Again Beats Index; 99.9% of High Priced Managers
There may be a problem or two with the sample size, replication, error bars, pretty much the whole statistical schmear, but if I put that in the headline would you have read this far?
From Joe Meth (Stock Chartist)...

Okay, Enough With Politics: Attention Managers, You Can Improve Corporate Efficiency by Randomly Promoting Employees

That last piece of research was awarded Harvard's own Ig Nobel prize in 2010.

Ya see, ya got your complex systems and ya got your chaotic systems and then ya got your complex-chaotic systems like weather or the economy or the stock market and when you endeavor at those levels of sophistication you realize:

"Nobody knows anything"
-William Goldman

Completely off-topic sidebar:
If you're interested, Mr. Goldman will show you how to write a movie script.

"Google buys domain"

Easy alpha.
I must be losing the edge though, this one was so obvious.
From CNBC:
Google has bought the alphabet. 
Not literally of course (if that's even possible), but it has acquired the domain name, just a few days after Google officially became a subsidiary of Alphabet, its new holding company. 
 Google Alphabet
The domain was created in 1999 and was updated on Wednesday when Google took control of it, according to domain database Whois. It is unclear how much it was bought for.Google announced its restructuring in August in a bid to separate its core businesses such as search and Android from its "moonshots" like driverless cars. At the time, Google unveiled its website with a URL of 
The purpose of the new domain is unclear given that the page did not load on Thursday morning. 
"We realized we missed a few letters in, so we're just being thorough," a spokesman for the company told media. 
Google owns 18,095 other domains, data on Whois shows. It's the owner of and, so if people misspell Google, they will still be redirected to the search engine....MORE

Bill Gross Is Suing PIMCO For $200 Million

For what, definition of character?
The man has been losing both his skill and his mind over the last few years.
From Bloomberg:
Bill Gross sues Pimco for at least $200M

  • Says Pimco executives conspired to get his share of bonus pool
  • Claims firm refused to pay his bonus for the third quarter

Bill Gross sued Pacific Investment Management Co. and parent Allianz SE for “hundreds of millions of dollars,” claiming he was wrongfully pushed out as the bond giant’s chief investment officer by a “cabal” of executives seeking a bigger slice of the bonus pool. 
“Driven by a lust for power, greed, and a desire to improve their own financial position and reputation at the expense of investors and decency, a cabal of Pimco managing directors plotted to drive founder Bill Gross out of Pimco in order to take, without compensation, Gross’s percentage ownership in the profitability of Pimco,” according to the complaint, which Gross’s lawyers said was filed Thursday in California state court in Santa Ana. “Their improper, dishonest, and unethical behavior must now be exposed.” 
A draft of the complaint was obtained by Bloomberg. The filing couldn’t be immediately confirmed in court records....MORE
While that may strike the uninitiated (to this type of thing) as some mighty fine bloviating, it is amateur compared to an incident I recounted in 2007's "Planktos Highlights Real Ocean/Climate Crises & Responds to Recent Misinformation Campaigns":
But first, one of my favorite examples of a stock scam (I told you, I have a morbid fascination with the underbelly of the markets, it's like watching the lions approach the wildebeest at the watering hole, you don't want to see it but you can't look away): 
...Peter Uttley, Equisure's chairman and a former Lloyds of London executive, took control of the company this week, assuming the chief executive post.... 
...Uttley said in the press release that his chairman role had been a "passive" one, but he now plans an active reorganization of the company, whose reputation has been stained by allegations that it is a scam insurance operation.... 
...In an unusually emotional statement to the press, sent from an Equisure board meeting Friday in London, Uttley told his version of events over the summer, which eventually led to the delisting of Equisure shares on the American Stock Exchange. 
"The simple truth was consumed in the belly of deception, but now has been vomited for the world to see," Uttley began. 
He then proceeded to tell a story of three men, whom he described as "liars," "cheats," and "scallywags," who worked with law enforcement officials and the press to spread false rumors about the company with the intent of buying Equisure out at 50 cents a share, a tiny fraction of the stock's trading price of $15, before AMEX suspended trading Aug. 1.
"Consumed in the belly of deception" is a pretty high bar, especially when followed by "vomited" and "scallywags".

Uttley et al made off with around ~$100 mil.

Ha! Ahead of the 2015 Economics Nobel, The Federal Reserve Proves Economics Is NOT A Science

The winner of the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2015 will be announced October 12.

For the last seven or eight years our watchword has been something akin to this idea from 2013's "The Next Time Someone Tells You Economics is a Science Remind Them of Mendeleev":
...Two other points to consider:1) The mere fact that economists use the tools of science (Maths) to do their work no more makes economics a science than bid and ask spreads make carbon trading "market based"....
This is a subject I've been known to lose it over-see link below-but for now I'll just say if someone can't reproduce your results, what you did wasn't science. It might be religion, or some other belief system but no replication, no science.
Thanks for playing though.
(was that snarky enough? I could turn up the snark if that would help, it goes to eleven. I'm new to this nasty stuff, it's not really my style and frankly I'm not very good at it)

Via Barry Ritholtz at The Big Picture:

Is Economics Research Replicable? “Usually Not”

Previously in Rantville:

August 2014
"Most Financial Economics Research is ‘Likely False’"

Reproducibility is pretty much the cornerstone of science. And yet some Bozo can come out and say:
People on all sides of the recent push for direct replication—a push I find both charming and naive—are angry....
and keep his pathetic little job. As the young people used to phrase the rejoinder: L

By the way, that was  James Coan, who calls himself  "Dr." although he apparently didn't have the intellectual horsepower to become a Chiropractor or D.D.S., writing in the Journal Medium.

Rather than the two honorable professions named above he's a freakin' Associate Professor of Clinical Psychology at the University of Virginia.

Jefferson weeps.

See, the thing is, if what one is writing about can't be reproduced, that kind of writing is called 'Literature'.

And, although gentle reader probably doesn't care, yes, I know the difference between replication and reproducibility.

With that note on the current state of the so-called soft sciences here's Barron's Focus on Funds with a much more upbeat post:

You might have heard of the study “Why Most Published Research Findings are False.” But who knew Ph.D.s had this much righteous indignation?...
...By-the-bye, should Coan decide against the rigor of writing for Medium or appearing on CBS' Sunday Morning there is always The Journal of Irreproducible Results.
HT on Coan, the invaluable Retraction Watch.

EIA: "Nationwide, electricity generation from coal falls while natural gas rises"

From the Energy Information Administration's Today in Energy, yesterday:

graph of U.S. net electricity generation from coal and natural gas, as explained in the article text
The monthly natural gas share of total U.S. electricity generation surpassed the coal share in July for the second time ever, with natural gas fueling 35.0% of total generation to coal's 34.9% share. Compared to the previous July, coal-fired generation fell in every region of the country, while natural gas-fired generation rose in every region. 
Earlier this year, natural gas-fired generation surpassed generation from coal for the first time. This switch occurred in April, generally the month with the lowest demand for electricity. In times of low electricity demand, many generators schedule routine maintenance, and utilization rates for generating plants are low. As demand increases during the summer, output from both coal- and natural gas-fired generators increases. 
Total electricity demand, excluding demand met by distributed (largely renewable) sources, increased from 384 billion kilowatthours (kWh) in July 2014 to 398 billion kWh in July 2015. Coal-fired generation fell from 150 billion kWh to 139 billion kWh, while natural gas-fired generation rose from 114 billion kWh to 140 billion kWh. This decrease in coal and increase in natural gas occurred in every region of the country: the Mid-Atlantic region had the largest decline in coal-fired generation, followed by Texas, while the Southeast and Central regions had the largest increases in natural gas-fired generation. 
Natural gas prices continue to be relatively low. The monthly average price at Henry Hub, a natural gas benchmark, declined from $4.14 per million Btu (MMBtu) in July 2014 to $2.91/MMBtu in July 2015, and it has since fallen to $2.72/MMBtu in September. The average price of wholesale natural gas in New York City during July ($2.06/MMBtu) was below the average wholesale price of Central Appalachian coal ($2.31/MMBtu), even before accounting for differences in fuel conversion efficiencies between coal- and natural gas-fired generators. Prior to this year, the last time electricity generation from natural gas came close to surpassing coal-fired generation was April 2012, when monthly average spot prices for natural gas were near $2.00/MMBtu. Power generation shares for coal and natural gas diverged as natural gas spot prices rose to about $3.50/MMBtu by the end of 2012....MORE

"U.S. Treasury inquires about ISIS use of Toyota vehicles"

They probably got the fleet discount.
From CNN:
The U.S. Treasury is seeking information from Toyota about how ISIS has gotten hold of the automaker's trucks, which have been shown in the terror group's propaganda videos. 
In a statement, Toyota said it is part of a broader U.S. Treasury inquiry looking more closely at how international supply chains and capital flow into the Middle East. The request of Toyota regarding its trucks was first reported by ABC News....MORE

Apparently U.S. satellites aren't as good as advertised and somehow missed this. Or the drones were occupied or something.

Wednesday, October 7, 2015

Signposts: As Charter rates Top $100,000/day Tanker Operator Euronav Breaks Out (EURN; FRO)

First up, Bloomberg, Oct. 2:

Oil Tanker Rates Soar Above $100,000 a Day as China Hiring Jumps
The world’s biggest crude oil tankers earned more than $100,000 a day for the first time since 2008, amid speculation that a surge in Chinese bookings is curbing the number that are left available for charter.

Ships hauling 2 million barrel cargoes of Saudi Arabian crude to Japan, a benchmark route, earned $104,256 a day, a level last seen in July 2008, according to data on Friday from the Baltic Exchange in London. The rate was a 13 percent gain from Thursday....MORE
And, although we usually keep tabs on Frontline to determine the health of the haulers, Investor's Business Daily looks at Euronav (and Indian bank HDFC but that's not going to help make our point now, is it?):

Two Top International Stocks Rise From New Breakouts
The outlook for international oil demand and production is anything but certain. But Wells Fargo Securities, in an August note initiating coverage on crude-oil tanker fleet operator Euronav (NYSE:EURN), said that despite significant turmoil in global capital markets, 2015 was shaping up to be the best (oil) tanker market in a decade.

Euronav is a Belgium-based shipping-fleet operator, reportedly the largest listed operator of crude-oil tankers. The company has expanded its fleet by 50% in the past 18 months to 57 tankers (four of which are on order), giving it a 3% share of total tanker tonnage.

Wells Fargo initiated coverage with an outperform rating, citing global production increases and gradually mending demand for oil. Euronav holds its exposure primarily to the spot market, with 80% of its business there, according to research from UBS. That means Euronav shares could be volatile if tanker rates suddenly start to decline....MORE
EURN Euronav NV daily Stock Chart

"The deception that lurks in our data-driven world"

From Fusion:
I start each day with a lie.

I get up, walk into the bathroom, and weigh myself. The data streams from the Chinese scale to an app on my phone and into an Apple dataserver, my permanent record in the cloud.

I started this ritual because I thought it would keep me honest. It would keep me from deluding myself into thinking my clothes didn’t fit because of an overzealous dryer rather than beer and cheese. The data would be real and fixed in a way that my subjective evaluations are not. The scale could not lie.

And of course, the number that shows on the scale isn’t, technically, a lie. It is my exact weight at that exact moment. If I were an ingredient in a cake recipe or cargo for a rocketship, this is the number you’d want to believe.

But one thing you learn weighing yourself a lot—or wrestling in high school—is that one’s weight, this number that determines whether you’re normal or obese, skinny or fat, is susceptible to manipulation. (This is the warning embedded in the pithy title of NYU professor Lisa Gitelman’s 2013 book: “Raw Data Is An Oxymoron.”)

If I want to weigh in light, I go running and sweat out some water before getting on the scale. If I’m worried that my fitness resolve is slipping and I need to scare myself back into healthy eating, I’ll weigh myself a little later—after some food and plenty of water— and watch my weight spike upwards.

Sure, the difference in all of these measurements is only plus or minus five pounds, but for someone with my own psychology—and maybe some of you—those differences are enough to make me this guy....

You might like to think that this is just one man’s data deception. That the data out in the rest of the world, like the stuff that gets published in science journals, is less susceptible to human manipulation.

But then you see studies like the one that recently came out in Science, America’s leading scientific journal, that subjected 100 supposed high-quality psychology papers to a large-scale replication study. When new research groups replicated the experiments in the papers to see if they’d get the same results, they were only able to do so 36% of the time. Almost two-thirds of the papers’ effects couldn’t be replicated by other careful, professional researchers.

“This project provides accumulating evidence for many findings in psychological research and suggests that there is still more work to do to verify whether we know what we think we know,” concluded the authors of the Science paper.

In many fields of research right now, scientists collect data until they see a pattern that appears statistically significant, and then they use that tightly selected data to publish a paper. Critics have come to call this p-hacking, and the practice uses a quiver of little methodological tricks that can inflate the statistical significance of a finding. As enumerated by one research group, the tricks can include:
  • “conducting analyses midway through experiments to decide whether to continue collecting data,”
  • “recording many response variables and deciding which to report postanalysis,”
  • “deciding whether to include or drop outliers postanalyses,”
  • “excluding, combining, or splitting treatment groups postanalysis,”
  • “including or excluding covariates postanalysis,”
  • “and stopping data exploration if an analysis yields a significant p-value.”
Add it all up, and you have a significant problem in the way our society produces knowledge....MUCH MORE

Société Générale's Albert Edwards: Emerging Market Currencies Will Fall As US, Euro Economies Collapse

The Japanese should be able to beat the Germans in this race to the bottom.
From ValueWalk:
In the most recent installment of looming trial and tribulation from Societe Generale's Albert Edwards, the Prince of Doom and Gloom argues that the Bank of Japan is likely to boost its QE program again soon, leading to a collapse in the yen and a rout in emerging market currencies. Edwards also suggests that continuing anemic U.S. inflation means the economy remains stuck in neutral.
Albert Edwards
Even though the sky is not falling yet, according to Albert Edwards' October 7th Global Strategy Weekly, there are good reasons to expect it might fall tomorrow or the next day: "The first was more soggy Japanese economic data which suggests that the BoJ may soon hit the QE button even harder. That would trigger a renewed slide in the yen and another round of Asian currency turmoil – plus ça change! But, secondly and perhaps more important is increasing evidence of a loss of confidence that the Fed is actually in control. Ignore for a moment the stock market’s celebration of weaker than expected payrolls. Instead investors should focus on the rapid decline in US inflation expectations since the Fed meeting – even now converging to dire eurozone levels!"
Albert Edwards says Japan-style deflation is on the horizon for U.S. and Europe
Albert Edwards
Edwards argues that Japan is at a crucial crossroads. Given nearly all of the recent economic data on the Japanese economy have been disturbingly weak, most analysts are now expect the BoJ to notably boost its QE program (QQE as it is known in Japan, having thrown in qualitative with their quantitative easing).

Advisers Are Pitching Direct Lending As An Asset Class

It's all about the default rates.
Milken had the work of W. Braddock Hickman (NBER staff, Cleveland Fed head) to lead him* but right now I don't know of any academic works on the peer-to-peer or 'direct' lending stuff during periods of economic stress.
From Barron's Penta:

How to Smartly Invest in Shadow Banking
Dodd-Frank and Basel III financial regulations have inadvertently created a massive investment opportunity. With U.S. banks facing ever stringent capital requirements, financing for small and medium size businesses across the country has dried up. Enter shadow banking. Direct-lending fund managers are stepping into the breach and offering floating rate loans to small and medium-sized U.S. businesses. A portfolio of such direct-lending vehicles can produce juicy returns, net of fees, of between 6% and 14%, according to Tampa, Florida-based financial advisory Bayshore Capital Advisors. That’s hard to beat in a low-yield environment.

“This is easy for most clients to understand because they see this [search for alternative financing] in their own business,” says Jonathan Bergman, managing director of New York-based TAG Associates, a multi-family office with $8 billion in assets under management. Bergman says a client with $10 million in assets, TAG’s minimum, who has a balanced risk tolerance, could consider allocating 5% of their portfolio to this direct lending strategy.

According to a Goldman Sachs estimate, the traditional banking sector will, due to regulatory changes, cede roughly $1.3 trillion of commercial, consumer and real asset loans to alternative lenders over the coming years. “With more red tape, higher capital requirements, and less leverage, banks have abandoned some lending activities which are no longer profitable,” write the folks at Bayshore Capital Advisors.

Spotting the opportunity in that void, large fund managers like Apollo, TCW and Cerberus have already launched billion dollar direct-lending funds. But there is still plenty of demand and room for profit. There are roughly 200,000 middle-market businesses with revenues between $10 million and $1 billion starved for funding, and, since 2008, alternative asset managers have raised $450 billion to satisfy their financing requirements and take advantage of this massive private-debt opportunity. The market should expand with continued economic growth, claims alternatives industry tracker Preqin, with the heart of America’s small to medium sized family businesses fueled “via private financing options.”

Private bankers have taken note and are shifting their focus back to the U.S. Citi Private Bank, for example, previously raised over $300 million from high-net worth clients for a European direct lending fund, but is now turning its attention to North America, says Daniel O’Donnell, Citi Private Bank’s head of private equity and real estate. As a general rule, there is a 1.5% to 2% return premium for direct lending in Europe over the U.S., O’Donnell says, largely because the market in Europe is tighter. Alternative lending in Europe is 20% of all leveraged loan activity, versus 85% in the U.S., but the greater market size here offers more cover, liquidity and openings. O’Donnell won’t show his cards but says he “sees opportunity in the U.S. shadow banking markets” and is “focused on niche direct-lending opportunities and businesses.”...MORE
*And then there was Edward Altman to mislead.
After Altman left academia he went to Morgan Stanley and found an historical 1% default rate.
Of course is was totally in error but MS marketing guys liked it.
And he's back at NYU and no one ever mentions the 1% thing.

Ex-Goldman Trader Keeps Loans Flowing To Oil & Gas Producers

From the Financial Times:
A former senior trader at Goldman Sachs has linked with AllianceBernstein to lend billions of dollars to US oil and gas producers, offsetting a trend towards scarcer financing for the energy sector.

The availability of credit is a crucial variable for forecasting oil output after the recent price collapse. If drillers cannot borrow, it will hasten the decline in production and help bring a glutted market into balance.

While there are signs money is tighter, the partnership announced on Wednesday by AllianceBernstein, the asset manager, and HudsonField, a recently formed energy merchant, shows investors are willing to finance some oil and gas companies.

“We genuinely believe there are many proficient operators who can produce economically, even in this price environment,” said Ben Freeman, HudsonField’s founder and chief executive who was Goldman’s global head of oil derivatives trading.

AllianceBernstein has raised $2bn to lend mainly to middle-market oil and gas companies. HudsonField will identify operators in shale basins such as the Eagle Ford and Permian of Texas and the Utica and Marcellus of the north-east, Mr Freeman said.

HudsonField’s other businesses will consist of trading physical oil and gas and offering hedges such as fixed price contracts to producers. Its senior management includes former executives from Goldman, Trafigura, the trading house, and Buckeye Partners, an energy transport group. Its name comes from its two office locations: in New York on the Hudson river and in Houston near Texas oilfields....MORE

Tuesday, October 6, 2015

"White House 'deeply disappointed' by Europe outlawing Silicon Valley"

From the Register:
Safe harbor ruling means it's 'open season against American businesses'
The US government is "deeply disappointed" by the European Court of Justice's decision to effectively kill the long-standing "safe harbor" agreement covering the flow of people's personal data across the Atlantic. 
Under European law, personal information on EU citizens must stay within the Continent for privacy reasons. To allow American businesses to access Europeans' information across The Pond, the US had a "safe harbor" pact with the EU that promised to keep people's data secure. 
That agreement was in place until Tuesday this week."Since 2000, the Safe Harbor Framework has proven to be critical to protecting privacy on both sides of the Atlantic and to supporting economic growth in the United States and the EU," Commerce secretary Penny Pritzker said in a statement published a few hours after the judgment was announced. 
"We are deeply disappointed in today's decision," she noted, adding that it "creates significant uncertainty for both US and EU companies and consumers, and puts at risk the thriving transatlantic digital economy." 
The decision has certainly got the political wheels moving, however, thanks to the huge question mark it has placed over the business models of many of Silicon Valley's tech companies....MORE
Also at the Register, some background from earlier today:

This Is Getting Serious: Russian Embassy Trolls Saudis

Following up on this morning's "Is Russia Plotting To Bring Down OPEC?" Saudi Clerics Declare Jihad On Russia.
From ZeroHedge:
As regular readers and foreign policy critics the world over are no doubt acutely aware, the US, Saudi Arabia, Qatar, and Turkey have gotten themselves in a bit of a quagmire in Syria and Moscow has been keen on pointing it out. Still, The Kremlin has thus far observed some semblance (and we do emphasize the word “some”) of decorum in criticizing the West’s approach as Moscow has generally confined its scolding to what at least seem like serious foreign policy critiques.  
That just went out the window - Russia is now openly mocking Riyadh, Doha, and Washington and as if the following weren’t brazen enough as it stands, note that it emanates from the UAE... 

Regarding the bolded bit, ZeroHedge was probably unaware of some of the stuff the Russians were putting out recently:

Politics In Florida Are Different

From Reason's Hit & Run blog:

The Goat-Sacrificing Prospective Libertarian Party Candidate Talks Sorcery, Eugenics, and the Coming Cataclysm
Augustus Sol Invictus (he acknowledges this is not his birth name) is a Florida lawyer, a former member of a branch of the "Thelemist" religious group Ordo Templi Orientis (OTO) (associated with the doctrines of British mystic Aleister Crowley), and the author of a letter to some of his fellow DePaul University law graduations in 2013 announcing: 
I have prophesied for years that I was born for a Great War; that if I did not witness the coming of the Second American Civil War I would begin it myself. Mark well: That day is fast coming upon you. On the New Moon of May, I shall disappear into the Wilderness. I will return bearing Revolution, or I will not return at all.
War Be unto the Ends of the Earth, Augustus Sol Invictus 
Mr. Invictus since emerged from the wilderness an announced candidate for federal Senate from Florida under the banner of the Libertarian Party (L.P.), although he has not yet filed the over $10,000 fee or over 100,000 signatures he needs to officially be on the ballot. 
On the stump speech video that is front and center on his campaign website, one mostly dedicated to reminding Libertarians that their enemy the state is at war with them, that they have to turn themselves into legitimate threats to the state, Invictus says, among many other interesting things (including references to "more reasonable men, men less insane" than him): "I want you to revolt...I want you to be dangerous...I want each and every one of you to be a legitimate threat...I don't want you to vote so much as I want you to wake up, drop out and tune in, I want you to take LSD and practice sorcery, I want you to listen to trap music and black metal, to learn the law and break it subject yourself to rigorous physical training, treat your body as holy temples" and to take your girlfriends to strip clubs while you seduce the dancers in the back room....MORE
Meanwhile, the Orlando Sentinel just spells it out up front:
Florida candidate for U.S. Senate admits to sacrificing goat, drinking its blood

Oil Prices Climb To Five-Week High

As we said in Monday's "Some Thoughts On Oil" the most recent rig count was the only one that has actually mattered, with the news hitting a market already at an inflection point it was off to the races.
The next question is where is the top of the new range?
More to come.
From MarketWatch:
Oil futures logged their highest settlement in five weeks on Tuesday, as the Organization of the Petroleum Exporting Countries forecast big cuts to oil investments that are expected to ease production and reduce global crude supplies. 
Speculation over a possible meeting among the major oil producers also provided support for oil prices, ahead of weekly updates on U.S. petroleum supplies.November West Texas Intermediate crude CLX5, +5.62%  climbed $2.27, or 4.9%, to settle at $48.53 a barrel on the New York Mercantile Exchange. That was the highest settlement since Aug. 31. November Brent crude LCOX5, +5.75%  on London’s ICE Futures exchange rose $2.67, or 5.4%, to $51.92 a barrel. 

“For now, the OPEC comments are triggering upward movement and expectations around the upcoming inventory data,” said Naeem Aslam, chief market analyst at AvaTrade.OPEC Secretary-General Abdalla Salem el-Badri, speaking at a conference in London Tuesday, said oil prices are set to rebound as steep cuts in global oil investments crimp supplies. He expects global oil-and-gas project investments to be down by 22.4% this year.In a report Tuesday, the Energy Information Administration estimated that crude production was 120,000 barrels a day lower in September than in August and said that output is expected to continue to decline through next August. 
News of a potential cooperation between OPEC and Non-OPEC oil producers also helped lift crude oil prices. But both Nymex and Brent prices have still fallen by roughly 9% year to date.“Oil prices dropping to this level and staying here for a prolonged period of time is definitely hurting major oil producers, Russia included,” said Daniel Ang, a Phillip Futures Energy analyst, who said the market is finding some support after Russia’s energy minister said his country was prepared to meet with members and nonmembers of [OPEC] to discuss the oil market.A meeting could indicate that major producers are willing to take collective steps to shield prices from further falls as Iran is set to unleash its supply, possibly later this year, speculated Ang. 
The American Petroleum Institute will publish its inventory data late Tuesday, followed by the U.S. Energy Information Administration Wednesday. Analysts polled by Platts expect to see an increase of 1.75 million barrels in crude inventories after previous data showed a four million-barrel rise from the week earlier. Analysts attributed that jump in crude supplies on a slowdown in U.S. refinery activity....MORE

Tips For The Media From 80-Year Old 'Yankee' Magazine

From the Paris Review's blog:
  • Today in unlikely longevity: New Hampshire’s Yankee magazine has been around since 1935, and it’s navigated, somehow, many epochal changes in media. What’s its secret? Listen carefully: cover fall foliage as if it’s Mardi Gras, never change, and appeal to a boring, affluent, aging readership. Yankee stands tall because of, not in spite of, its stupefying predictability: “There are tips on travel to destinations like Narragansett Bay, in Rhode Island, and recipes for Boston cream pie and needhams (an old-fashioned Maine candy made with mashed potatoes). Ads for regional businesses and New England wares still fill the magazine, which now comes out six times a year. The much loved Swopper’s Column—a classifieds page for unusual objects, which first appeared in the magazine’s fourth issue—was not discontinued until 2013.”
That's from the Review's daily link-post, today titled "Jeanne Dielman Forever, and Other News"

"Is Russia Plotting To Bring Down OPEC?" Saudi Clerics Declare Jihad On Russia

First up, SafeHaven:
...In addition, Russia's deputy prime minister in charge of energy policy, Arkady Dvorkovich, in the beginning of September made comments that, in tone and substance, mocked Saudi policy, saying that "OPEC producers are suffering the ricochet effects of their attempt to flush out rivals by flooding the world with excess output," expressing doubt that OPEC members "really want to live with low oil prices for a long time," and implying that Saudi policy is irrational.

Indeed, Russia can be seen as maneuvering to split OPEC into two blocs, with Russia, although not a member, persuading the "Russian bloc" to isolate Saudi Arabia and the Gulf Arab OPEC members within OPEC. This might persuade the Saudis to seek a compromise with the have nots.

A strategic alliance with Iran and Iraq offers Putin two more potential avenues to pressure the Saudis. They can test Saudi determination to defend their market share at any price and its wherewithal financially to do so. Iran claims it can raise crude output by one million barrels within six or so months of the lifting of sanctions. The Saudis may be calculating that Iran must first rehabilitate its oil fields and that Iran, cash poor, cannot do so quickly. If this is the case, Russia could step in, offer Iran financing, and force the Saudis to contemplate prices staying lower longer than they anticipated and therefore continuing pressure on their economy.

Russia also could cooperate with Iran and Iraq to take market share from Saudi Arabia in the vital Chinese market. As a recent Bloomberg article pointed out, Saudi Arabia, Iran, Russia, Iraq and other countries are vying intensely for sales to China, the second largest import market and the major source of demand growth in coming years. Coordinating their pricing and consistently offering the Chinese prices below the Saudi price, they could seek to win market share. Such a price war would pressure the competitors' currencies....MORE
While al-Arabiya reports:

52 Saudi clerics, scholars call to battle Russian forces in Syria
Fifty two Saudi inciters, both academics and clerics, have called on the public to “hurry” to Syria where they should be fighting Russian forces. 
The clerics, some of which are members of the International Union of Muslim Scholars, called on “all those who are able, and outside of Saudi Arabia, to answer the calls of jihad” and to fight alongside one of the extremist groups facing Russian forces. 
According to experts, by issuing this statement, inciters seek to implicate Saudi, Gulf, and Muslim youths in the fight against Russian forces, mirroring Al-Qaeda’s and the Taliban’s recruitment of young fighters during the Afghan-Soviet war....

Meanwhile the propagandists at RT report:
Russian Air Force destroys 20 ISIS tanks near Palmyra – Defense Ministry (VIDEOS)
Which of course raises the question: WTF? If the U.S. has been bombing ISIS for a year how do the head-choppers still have any tanks? Weren't we targeting the tanks? Seriously, Whisky, Tango, Foxtrot?

President Obama Takes A Trans Pacific Partnership Victory Lap

From AFNS:

Obama Returns From Trade Summit With 5 Stout Ships Full Of Cardamom, Silk, And Indigo
WASHINGTON— Exhausted, berimed with salt, and haggard from his long sea journey, but nevertheless triumphant as he guided his fleet to port following the completion of the Trans-Pacific Partnership, President Barack Obama is said to have made harbor in Washington, D.C.’s anchorage Monday, his five sturdy galleons choked to the very gunwales with the finest silks, casks of redolent cardamom, and great cakes of vivid dye-of-indigo retrieved from the far Orient. “Come, ye gentles, ye merchants, ye noble tradesmen of America—witness the riches of the East and rejoice!” said the president from the quarterdeck of his flagship, theLaissez-Faire, as he cracked open a chest of cherrywood to display to his cheering welcomers dazzling jade and delicate urns of porcelain procured from the very rim of the world....MORE