WAIT NO MORE: VOTE

Here's an interesting read about the kind of conniving, underhanded  people in Washington are about.

All this and more in an upcoming election year. As the article states after: ... five State Department reviews concluding that Keystone XL is in the national interest, Americans continue to wait for the jobs, revenue and security this project would provide. 

http://energytomorrow.org/blog/2014/september/sept-19-keystone-xl-american-energy-and-the-right-energy-policies

DON'T SHAKE WHEN YOU SAY IT

A lot of bloated rhetoric, most of it economic and political babble disguised as calls for more of the same, gets posted on editorial pages every day.

Every now and then, however, somebody writes a line or three that's as fresh and pure as newly fallen snow when it comes to truth.

In today's Financial Times, Gaspard Koenig's, "No laughs in Sarkozy's Groundhog Day" return, fills that bill.

Taking a page from Hollywood, Nicolas Sarkozy, the former French  leader, reinvented himself yet again on Facebook this past week with his Phoenix-like statements about going to the mountain top of self-examination since his departure from public life. 

Bottom line: It's a new Sarkozy, one who will do what he didn't do before.

Sarkozy's in good company. Politicians along with movie stars are noted for re-inventing themselves. Think Richard Nixon after his devastating losses as a presidential and gubernatorial candidate way back when politicians were just understated skilful liars compared to today's new breed of arrogant, pompous liars.

Koenig's description of Sarkozy's spiritual reformation says more--and says it better--than we need to say. The beauty and truth of his piece rests in a few paragraphs. And though this is our comparison not Koenig's, those few paragraphs apply more so today than ever to the U.S.

What France needs, though, is to revive its liberal DNA and make a clean break with its postwar tradition of state interventionism, heavy centralization  and top-down paternalism. Our country possesses all the necessary assets to flourish in a globalized world if only it were liberated from a stifling mix of ever-changing regulations and authoritarian bureaucracy.

How could Mr Sarkozy be the right man to achieve that? Under his leadership, public spending and public debt increased by 15 percent and 30 percent respectively, a score of new taxes was created, the total number civil servants kept rising, the French state acquired more stakes in private companies than ever before and a number of civil liberties were threatened.

There was no shaking in Koenig's voice here. And none in ours.
t. man hatter

ASIA OVERNIGHT

Here's a look at what's happening overnight in Asia as precious metals are getting hammered again. Even the U.S. dollar is under pressure. Treasury yields are also down following a quick rally after last week's FOMC announcement that many interpreted as more hawkish.

Some are postulating that the excessive risk warnings at the recent G-20 meeting might be causing some investor skittishness. For more and some interesting charts check out the site below.
www.zerohedge.com/news/2014-09-21/liquidations-continue-stocks-dollar-slide-precious-metals-pounded-asia-trading.

CAREFUL WHAT YOU WISH FOR

 
Declining oil prices bite some more than others. And some of that pain has hit Venezuela.

 The price of Venezuela’s benchmark basket of crude and petroleum products fell on Aug. 22 to
$90.89, a two-year low. Since the end of last month, the price has fallen 10 percent, tracking a surprising drop in international prices in spite of Mideast tensions.

For Venezuela, each $1 drop in the per-barrel price translates into a $1 billion loss of government revenue. With a fiscal deficit already estimated at 14 percent to 15 percent of GDP, the fall in prices alarms many, especially as domestic oil production continues to slide.

Russia and Iran are also affected by weak energy prices.

"The Russians are very exposed to lower oil prices. We don't know to what extent it will influence their behavior in Ukraine, but they're certainly going to feel pressure on their budget."

Russia's ruble currency has already fallen to a historic low against the dollar as its economyis hit by sanctions from the United States and European Union over its involvement inUkraine. That increases the price Russians must pay for many imports, from vegetables to luxury goods.

Iran on the other hand was trying to get its oil back on international markets after years of being under U.S. led sanctions over concerns about nuclear proliferation. Now with the so-called U.S. oil gut those negotiations might well be delayed since the U.S. appears to be in a stronger position.

Yet in a recent interview with the Financial Times, former BP chief Tony Hayward noted:

US and EU sanctions against Moscow are in danger of turning around and biting the west by constraining global oil supply and pushing up prices incoming years...cutting off capital markets from  Russia's energy group, which would eventually lead to less investment in Russian oil production, was likely to damage long term supply.

He said the US shale boom had obscured the growing risks to the world's supply, but its effects would wear off, leaving the global economy dangerously exposed to potential disruptions in th flow of oil.

Hayward may be unpopular owing to his BP gulf oil spill connection, but that should not color one's view that he doesn't have some idea about energy's future.

Just today in the Financial Times as reported in Business Week Blackstone the big investment group announced it's pulling out of Russia. 

Blackstone Group LP (BX:US) is backing off efforts to find deals in Russia, the Financial Times reported, citing an unidentified person with knowledge of the matter.

The world’s biggest manager of alternative assets isn’t renewing contracts with consultants it employs in the country, according to the newspaper. Tensions between Russia and nations including the U.S. escalated this year, leading to sanctions, as Russian President Vladimir Putin annexed the Crimean peninsula and supported rebels seeking to split eastern Ukraine.

Blackstone Chairman Steve Schwarzman joined the international advisory board of the Kremlin-backed Russian Direct Investment Fund three years ago. The $10 billion fund was created to stimulate investments in privately held businesses and wean the state off its dependence on commodities. Its investment partnerships have helped draw foreign capital into Russia’s economy, according to its website.

Blackstone’s decision also was prompted by its struggle to find any suitable investment opportunities in the past three years, the FT said. Peter Rose, a spokesman for New York-based Blackstone, declined in an e-mail to comment on the report.

Blackstone oversees $279 billion in assets including private-equity, real estate, credit and hedge-fund investments. Schwarzman said in April that investors should wait to gauge the results of international sanctions against Russia before making investment decisions.

“It’s in the ‘watch and wait’ category,” he said in an interview with Bloomberg Television on April 28. “This can have a variety of outcomes.”

There's much more here than meets the MSM's mundane coverage. When it comes to future supply disruptions, much of it falls under the be-careful-what-you-wish-for label.
t. man hatter

HAULING FREIGHT

A lot of investors pay much attention to the Dow Jones Industrial Average but little if any to the Dow Transportation, irrespective of talk about both being antiquated.

But based on the idea that both discount the future, the Transportation index is apparently telling investors something.

The strength of the transportation sector is difficult to ignore.  The Dow Jones Transportation Average ended the week just 0.49 percent below its record-high close of 8,676.19, which it reached on Thursday (NYSEARCA:IYT).

On Thursday, September 18, the Association of American Railroads reported that the total combined U.S. weekly rail traffic for the week ending September 13 was 579,440 carloads and intermodal units, exceeding the total for the week ending on August 30.  The week ending September 6 brought a decline to 525,144 carloads and intermodal units from the total for the week ending August 30, which was 579,209.  The most recent weekly total represented a 3.1 percent increase from with the same week last year.

From the report:

For the first 37 weeks of 2014, U.S. railroads reported cumulative volume of 10,718,782 carloads, up 3.5 percent compared with the same point last year, and 9,522,482 intermodal units, up 5.6 percent from last year. Total combined U.S. traffic for the first 37 weeks of 2014 was 20,241,264 carloads and intermodal units, up 4.5 percent from last year.

The chart below depicts the performance of the iShares Dow Jones Transportation Index ETF (NYSEARCA:IYT) during the past six months.  (Chart courtesy of Stockcharts.com).

As the chart demonstrates, IYT finished Friday’s trading session at $154.81, after hitting a record intraday high of $156.28.  At Friday’s closing price of $154.81, IYT ended the week 3.15 percent above its 50-day moving average of $150.08.

Investor or central banker, either way someone has to decide what the Transportation index is saying: Higher interest rates now or perhaps too late later?

 http://www.wallstreetsectorselector.com/investment-articles/editors-desk/2014/09/investors-see-weekly-rail-traffic-surge/

CONSUMER GROUND DOWN

Forget the beef, ground or otherwise

It's too expensive as consumers get further ground down with rising cost of eating.

http://www.blacklistednews.com/New_Record%3A_Pound_of_Ground_Beef_Tops_%244_for_First_Time/38026/0/38/38/Y/M.html

GOVERNMENT STUPITY RIDES HIGH

The government nonsense never ends.

The story featured here is not the first case. Just a few weeks ago 11 people in Indiana were jailed for a similar offense: growing or harvesting or having ginseng in their possession out of season.

Aside from the bureaucratic stupidity here, one of the first things that comes to mind is these overpaid official vigilantes have nothing more important to do than arrest ginseng growers.

BECKLEY, WV — Prohibitionists are boasting about arresting a number of people for harvesting ginseng plants before the government-sanctioned “ginseng season” had officially begun.

Within the last two weeks, agents from the West Virginia Division of Natural Resources (DNR) followed through with arresting at least 11 people for possessing and/or harvesting ginseng, called “sang” on the black market.

Ginseng is a wild-growing plant that is sought after by many because of its gnarly roots, which are believed to have medicinal properties. Its rarity and unusual characteristics allow it to fetch high prices per pound across the world.

In the state of West Virginia, individuals can be arrested for picking or even possessing the plant outside of a set of restrictive government parameters. Digging ginseng up before September 1 or after November 30 is considered out-of-season harvesting and strictly verboten.

For decades these people chased down pot growers and, when successful, displayed their prized seizures in huge stacks and piles on television or in the print media. One wonders now much this brilliant police work costs taxpayers every year. 

 

Well, here's your answer.

The recent 190 pound bust is the result of fifteen officers of the DNR District 4 devoting up to a year in tax-based resources to investigate the illegal ginseng trade. The eleven arrests were made in McDowell, Wyoming, Fayette and Raleigh Counties, and officials say that more arrests may still be underway. Names of the arrestees were not released.

Now that plants have been seized, government agents will seek to sell the ginseng, with the proceeds going back into the agency’s coffers.

The bust also netted $30,000 in confiscated cash “collected from people illegally purchasing the root out of season and without a proper dealer’s license,” the Charleston Gazette reported. This policing-for-profit effort can be attributed to civil asset forfeiture.

Let's see now: they're spying on us day and night, they've militarized the local police and they're busting members of the sang gang. With those priorities, why the hell is anyone worried about gridlock or some slow economic growth?

TRANSPARENCY GOLDMAN SACHS STYLE

 

There's no intrigue like old intrigue. And the same goes for cronyism and long established firms.

It turns out Wall Street investment bank Goldman Sachs apparently meets both criteria.

As we've noted before you don't have to look very hard to find Goldman Sachs' tentacles spread around from central bankers to political appointees in high places. The list of current central bankers with former Goldman ties is lush and long

It's a sticky, incestuous financial web they weave. The Goldman alumni club would rival that of most Ivy League knowledge boxes. Here's a quote from today's Financial Times.

Goldman Sachs has admitted in court documents that it used an internship, training, small gifts, occasional travel and entertainment to cement a “strategic partnership” with the Libyan Investment Authority under the former Gaddafi regime.

The bank’s defence to a $1bn lawsuit filed by the LIA in London in January lifts a veil on techniques deployed by the company and other western financial institutions to win and deepen client relationships with the $66bn sovereign wealth fund – techniques that law enforcement agencies in the US are probing as to whether they tipped over into potential bribery.

We love the emphasis on "small gifts."

Goldman argues that none of its actions amounted to improper or unusual influence and that it maintained at all times “an arm’s-length banker and client relationship”, according to its defence filed at London’s High Court last week.

The LIA accused Goldman in January of entertaining former high-level LIA officials in Morocco, the “extensive expenses” of which were paid for using a Goldman credit card.

This is the way the Wall Street Journal characterized Goldman's actions in the case.

The filing marks Goldman's most-extensive public defense yet of its dealings with Libya in the late 2000s, during the brief period between the North African country's opening to western investment and the fall of Col. Moammar Gadhafi. The push by Goldman and other financial firms to pursue deals with Libya's fledgling wealth fund has drawn scrutiny by U.S. securities regulators and federal prosecutors.

The Wall Street Journal reported Thursday that the Securities and Exchange Commission is investigating an internship and other perks it allegedly offered to win LIA business. Some of those allegations, including the internship, had appeared in the LIA's lawsuit.

With all those Goldman ties to the Federal Reserve perhaps we need a new definition for the term transparency.

t. man hatter

FOR THOSE WHO BOTHER

For those who bother to read our posts regularly--we think there are at least two now, though one is a distant cousin from all indications--you know we have written often about energy stocks.

Here a brief list of some articles: "Energy Spike Intrigue," "What The Frack Is Happening," "Don't Sleep On Energy," "Nimby Nuts," "What The Market Offers" and several more. Earlier this summer when energy ran up with crude hitting $115 a barrel we said there'd be a pull back.

In fact, we mentioned the coming pullback before it topped out. That's pretty much how markets work. Few observers ever hit exactly the pullback or turn around numbers. Nor is it necessary. Close is good enough in most cases to make serious money.

Well, though it might have some more to go, we're getting it. Wall Street bromides abound. Never try to catch a falling knife is one. Despite all the glut talk, energy is no falling knife. Smart traders put their positions on in tranches. And so should you.

Energy needs to be a permanent part of one's portfolio. As we navigate the Internet we look for stories that agree and disagree with our feelings about a stock or sector, notwithstanding all the macro-micro stuff.

Truth be told, we especially like those that differ from our opinions.

Like new highs and lows, we try try track or keep count, sort of like counting cards in blackjack. When the stories start piling up too far to one side or the other, we get interested.

But you need to do your own research and pick your own stocks. Here is a link to a recent post you might find interesting. Suffice it to say we own and very much like the prospects for some of the companies named here.

http://www.marketwatch.com/story/5-reasons-energy-stocks-will-stage-a-second-rally-in-2014-2014-09-19

AROUND THE WEB

1. SYMBOLISM MATTERS
http://www.psmag.com/navigation/health-and-behavior/symbolic-power-act-emptying-pockets-israel-curbs-generosity-90790/

2. SHALE EARTHQUAKE DEBATE
http://bakken.com/news/id/221514/oklahoma-growing-epicenter-earthquake-debate/

3. FRESH SELLING HITS GOLD
http://www.mining.com/new-low-for-gold-price-55036/

4. BUBBLES EVERYWHERE
http://finance.yahoo.com/news/bubble-bubble-ol-marc-faber-121647662.html

5. MORE TEARS AHEAD
http://www.bloomberg.com/news/2014-09-19/argentina-s-poverty-rate-may-quadruple-to-40-world-bank-says.html

6. ANTI-MUSLIM ADS
http://www.theguardian.com/world/2014/sep/19/pamela-geller-new-york-buses-subways-islam-james-foley

7. INTERNET BAN
http://www.blacklistednews.com/Putin_Seeks_Ways_to_Cut_Russia_Off_From_the_Internet/38060/0/38/38/Y/M.html

8. BALANCE OF TRADE
http://www.fee.org/the_freeman/detail/23-the-balance-of-trade-deficit-requires-government-action