24 September 2016 — Saturday


It was virtually a nothing day in gold.  It crawled a few dollars lower in morning trading in the Far East, then did nothing until 10 a.m. BST in London.  It crawled higher until 8:40 a.m. in New York — and then chopped equally quietly lower for the rest of the day.

The low and highs definitely aren’t worth looking up.

Gold closed in New York on Friday afternoon at $1,337.10 spot, up a 40 cents from Friday.  Net volume was pretty light at just under 94,000 contracts.

It was very similar in silver, except for the fact that once silver was turned lower at 8:40 a.m. in New York, the sell-off was a bit more impressive.  That lasted until minutes before 2 p.m. EDT — and the price rallied a bit into the close from there.

The high and low ticks were reported by the CME Group as $20.025 and $19.665 in the December contract.

Silver finished the day at $19.675 spot, down 16.5 cents from Thursday’s close.  Net volume was very decent at at just over 45,000 contracts.

And here’s the 5-minute tick silver chart courtesy of Brad Robertson.  There’s not a lot to see here, but I thought I’d include it for general interest purposes.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ is a must here.

Platinum was mostly in positive territory yesterday — and was up 5 bucks or so by the COMEX open.  But, like gold and silver, got hit at 8:40 a.m. — and was sold back below unchanged.  However, it managed to rally a handful of dollars as the Friday trading session progressed, closing up a buck at $1,054 spot.

Platinum traded a few dollars below unchanged through all of Far East and early Zurich trading yesterday.  But just before 11 a.m. Europe time, it began to rally with some authority until it ran our of gas/got capped shortly before Zurich closed, which was 11 a.m. EDT.  It was turned lower at the COMEX close — and sold back below the $700 spot mark, finishing the Friday session at $699 spot, up 10 dollars on the day.  It was up 15 dollars at its high and, like Thursday, would have closed considerably higher if the short buyers/long sellers hadn’t shown up once again.

The dollar index closed very late on Thursday afternoon in New York at 95.38 — and really didn’t do much until the 30 basis point price spike that began at 8:40 a.m. in New York.  By the COMEX close, the gains from that spike rally were all but gone — and the index chopped quietly higher into the close from there.  The index finished the Friday session at 95.51 — and up 13 basis points on the day.

I would presume that the sell-offs in all four precious metals at that time had a lot to do with whatever was happening in the currency market at that time.  If not that, then the event was used as cover to turn them lower.

And here’s the 3-year U.S. dollar index chart — and one wonders how long it can be maintained at its current lofty perch.

The gold stock opened unchanged, dipped a bit, then rallied a hair into positive territory at the p.m. gold fix – and it was all down hill from there until minutes before 3 p.m. EDT.  At that juncture some bottom fishing appeared — and they closed just off their low ticks.  The HUI closed lower by 2.80 percent.

It was the same for the silver equities, and they only got a sniff of positive territory.  Nick Laird’s Intraday Silver Sentiment/Silver 7 Index closed down 3.03 percent.  Click to enlarge if necessary.

And here are three charts from Nick that tell all.  The first one shows the changes in gold, silver, platinum and palladium for the past week, in both percent and dollar and cents terms, as of Friday’s closes in New York — along with the changes in the HUI and Silver Sentiment/Silver 7 Index.  The Click to Enlarge feature really helps on all three charts.

And the chart below shows the month-to-date changes as of Friday’s close.

And below are the year-to-date changes as of the close of trading yesterday.

The CME Daily Delivery Report showed that 40 gold and 37 silver contracts were posted for delivery on Tuesday within the COMEX-approved depositories,  In gold, Canada’s Scotiabank was the sole short/issuer — and Goldman Sachs was the only long/stopper for its client account.  In silver, the two short/issuers were International F.C. Stone and ABN Amro with 33 and 4 contracts out of their respective client accounts.  There were 7 long/stoppers once again.  Scotiabank picked up 14 for its own account, Goldman Sachs stopped 10 contracts for its client account — and JPMorgan picked up 4 contracts for its own in-house [proprietary] trading account.  A link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Friday trading session showed that gold open interest in September fell by 8 contracts, leaving 187 left…minus the 40 contracts mentioned in the previous paragraph.  Thursday’s Daily Delivery Report showed that 48 gold contracts were posted for delivery on Monday, so that means another 48-40=8 gold contracts were added to the September delivery month yesterday.  September o.i. in silver dropped by 30 contracts, leaving 532 still open, minus the 37 mentioned above.  Thursday’s Daily Delivery Report showed that 50 silver contracts were actually posted for delivery on Monday, so that means that another 50-30=20 silver contracts were added to the September delivery month.  These extra contracts in September have certainly been adding up over time in both silver and gold.  But they have to end sooner or later, as there are only 3 more delivery days left in September after Tuesday’s deliveries.

October open interest in gold declined by another 1,148 contracts, leaving 24,442 still open.

There was a smallish deposit in GLD yesterday, as an authorized participant added 9,540 troy ounces.  There was a deposit in SLV as well, as an a.p. added 1,044,316 troy ounces to that ETF.

I would suspect that SLV is owed a lot more than that — and that the authorized participants, principally JPMorgan, is most likely shorting SLV shares in lieu of depositing physical metal.

There was a small sales report from the U.S. Mint yesterday.  They sold 1,500 one-ounce 24K gold buffaloes, plus 50,000 silver eagles.

Month-to-date the mint has sold 63,000 troy ounces of gold eagles — 13,000 one-ounce 24K gold buffaloes — and 1,305,000 silver eagles.

Gold eagle and gold buffalo sales are decent, but without JPMorgan buying every silver eagle that John Q. Public wasn’t, real bullion demand is revealed for what it truly has been over the last couple of years — and that’s horrid.

There was a decent amount of in/out gold activity over at the COMEX-approved depositories on Thursday — and all of it was at Canada’s Scotiabank.  They reported receiving 48,293 troy ounces, which is suspiciously close to the 48,491 troy ounces that was shipped out of JPMorgan on Wednesday.  Scotiabank also shipped out 65,907.500 troy ounces/2,050 kilobars [U.K./U.S. kilobar weight].  The link to that action is here.

There was big activity in silver as well.  They reported receiving 180,332 troy ounces, but shipped out 856,256 troy ounces.  The ‘in’ activity was all into JPMorgan’s vault — and the lion’s share of the ‘out’ action was the 605,441 troy ounces shipped out of CNT.  The rest of the ‘out’ activity was at Scotiabank.  The link to that action is here.

There was no gold reported received over at the COMEX-approved gold kilobar depositories in Hong Kong on their Thursday, but 2,330 kilobars were shipped out of Brink’s, Inc.  A link to that activity, in troy ounces, is here.

Friday’s Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, showed virtually no change in silver, but a big improvement in gold.  But before you get too excited about that, it should be pointed out that the price/volume activity that occurred on Wednesday and Thursday, the two days following the cut-off for this week’s COT Report, makes what you’re about to read, “yesterday’s news” in just about every respect.

In silver, the Commercial net short position increased by a scant 270 contracts, or 1.35 million troy ounces.  The Commercial net short position in silver now stands at 95,9945 COMEX contracts, or 484.7 million troy ounces of paper silver held short by these traders.

The weekly changes were barely a rounding error — and the short position still remains in screamingly bearish territory.  The changes within the Big 8 traders category — and under the hood in the Disaggregated COT Report were measured in a few hundred contracts each.  I shan’t bother commenting on them.

Ted Butler says that JPMorgan’s short position in silver was most likely unchanged from the 32,000 contracts that they were net short last week.

Here’s the 9-year chart for the silver COT Report — and this week’s changes aren’t even noticeable.  Click to enlarge.

The changes in gold were far more impressive, as the Commercial net short position declined by a hefty 20,756 contracts.  They arrived at this number by adding 3,473 long contracts, plus they covered a chunky 17,283 short contracts.  The sum of those two numbers are the changes for the reporting week.  The Commercial net short position at the end of Tuesday’s trading session is now down to 29.06 million troy ounces.

Ted said that the Big traders only decreased their net short position by about 6,400 contracts, the ‘5 through 8’ traders  by a very smallish 1,300 contracts and, for the second week in a row, it was Ted’s raptors — the commercial traders other than the Big 8 — that did the heavy lifting once again.  They covered around 13,100  short contracts.  I’ll be interested to see if Ted has anything to say about this in his weekly commentary later today.

Under the hood in the Disaggregated COT Report the numbers were even more impressive, as the Managed Money traders sold long positions and went short to the tune of 29,830 COMEX contracts.  They arrived at that number by reducing their long position by 25,512 contracts, plus they increased their short position by 4,318 contracts — and the total of those two numbers is the weekly change.  The difference between that number and the Commercial net short position was made up almost exclusively by the traders in the ‘Nonreportable’/small trader category, as they went long and covered short positions to the tune of 8,478 contracts.

Here’s the 9-year COT chart for gold — and it’s still at nose-bleed levels, even with the big improvement during the reporting week just past.  Click to enlarge.

But as I said in my opening remarks, ‘all of the above’ is already ‘yesterday’s news’ — and in both silver and gold if we’re not a new record short positions as of the close of Friday’s trading session, we’re awfully close.  Of course there are still two more trading days between now and next Tuesday’s cut-off — and anything can happen between now and then.  So I’ll revisit the issue in next Wednesday’s column.

Here’s Nick Laird’s “Days to Cover” chart updated with yesterday’s COT data for positions held at the close of COMEX trading on Tuesday.  It shows the days of world production that it would take to cover the short positions of the Big 4 — and Big ‘5 through 8’ traders in each physically traded commodity on the COMEX.  Click to enlarge.

As I say in every Saturday column—the short positions of the Big 4 and 8 traders in silver continues to redefine the meaning of the words ‘obscene’ and ‘grotesque’ — but there’s not a lot of change from the previous week’s report.  For the current reporting week, the Big 4 are short 152 days [5 months] of world silver production—and the ‘5 through 8’ traders are short an additional 67 days of world silver production—for a total of 219 days, which is just over 7 months of world silver production, or 532.1 million troy ounces of paper silver held short by the Big 8.  Not surprisingly, these numbers are unchanged from last week’s report.

And it should be pointed out here that in the COT Report above, the Commercial net short position in silver is 484.7 million troy ounces.  So the Big 8 hold a short position larger than the net position—and by about 48.4 million troy ounces.  That’s little changed from the prior week’s report as well.

And if that isn’t bad enough, the Big 8 are short 54.9 percent of the entire open interest in silver on the COMEX futures market — which is only off last week’s record high by a hair.  How insane is that?  And if you subtract out the market-neutral spread trades, it’s a reasonable assumption the Big 8 are short more than 60 percent of the total open interest in silver.  In gold it’s ‘only’ 47.6 percent of the total open interest that the Big 8 are short.  This is nuts!

And as an aside, the two largest silver shorts on Planet Earth—JPMorgan and Canada’s Scotiabank—are short about 102 days of world silver production between the two of them—and that 102 days represents around 67 percent [two thirds] of the length of the red bar in silver in the above chart.  The other two traders in the Big 4 category are short, on average, about 25 days of world silver production apiece.

And based on Ted’s estimate of JPMorgan’s short position of 32,000 contracts, JPMorgan is short around 67 days of world silver production all by itself.  Because of that, the approximate short position in silver held by Scotiabank works out to around 35 days of world silver production.

In gold, the Big 4 are now short 72 days of world gold production — and the ‘5 through 8’ another 23 days of world production, for a total of 97 days. The Big 4 in gold are short 74 percent of the total short position held by the Big 8.  How’s that for a concentrated short position within a concentrated short position???

And just as an aside those numbers in platinum are 69 and 65 percent respectively.

I have a lot of stories today — and a number of them are reposts from earlier in the week — and I’m putting them in today’s column for length and/or contact reasons.  I stuck them in earlier because they were too important not to post right away.


Bill Fleckenstein Slams CNBC “Jerk” – “Don’t Get in My Face Because I Won’t Join Your Party“

Having been invited on to CNBC to discuss his views of the market, famous short-seller Bill Fleckenstein explained rather eloquently that QE4 is coming and people will wake up to the fact that central bankers “are the arsonists that create the fire, not the firemen that put it out.” This non-mainstream view was treated with disdain by CNBC host Tim Seymour who slammed Fleckenstein for “missing out” on the “artificial market’s” (because even CNBC now admits that’s what it is) gains. The response was epic.

“Don’t be such a jerk… I don’t ask to come on this show, you invited me… and don’t get in my face because I won’t join your party…”

This 6:20 minute CNBC video interview was posted on the Zero Hedge website at 4:02 a.m. EDT on Friday morning — and the first reader through the door with it was Brad Robertson.  Another link to it is here.

Greenspan Warns Bond Rally Untenable as Bill Gross Says Go Long

A day after Bill Gross said central-bank support limits the downside for long-term government debt, former Federal Reserve Chairman Alan Greenspan called the bull market in Treasuries unsustainable.

The yield on the U.S. 10-year note fell to the lowest level in two weeks even as Greenspan warned it may rise in the long run to as much as 5 percent. On Wednesday, the Fed lowered projections for the path of interest rates, while the Bank of Japan shifted the focus of its stimulus to controlling bond yields. The actions prompted Gross, manager of the $1.54 billion Janus Global Unconstrained Bond Fund, to say he favors longer-dated sovereign debt.

“Whenever you have a bull market, it looks as though it is never going to turn,” Greenspan, the second-longest serving Fed chairman, said in an interview on Bloomberg Television. “This is a classic case of a peak in a speculative security.”

Investors globally have regarded monetary policy with growing skepticism that there’s more central banks can do to stoke inflation and economic growth. Asset-purchase programs and negative interest rates have pushed yields on more than $9 trillion of government securities worldwide below zero, according to Bloomberg Barclays index data. The European Central Bank triggered a global sell-off this month after signaling it wouldn’t pursue further stimulus.

This Bloomberg article was posted on their Internet site at 3:10 p.m. Denver time on their Thursday afternoon — and I thank Swedish subscriber Patrik Ekdahl for sharing it with us.  Another link to it is here.

Dallas Police Pension on Verge of Collapse as Record Number of Cops Seek Full Withdrawals

Just over a month ago we wrote that the Dallas Police and Fire Pension Fund was on the verge of collapse after a series of shady real estate investments resulted in massive markdowns of pension assets, the ouster of the fund’s CIO and an FBI raid of the fund’s largest real estate investment manager.  We summed up the fund’s dilemma as follows:

The Dallas Police & Fire Pension (DPFP), which covers nearly 10,000 police and firefighters, is on the verge of collapse as its board and the City of Dallas struggle to pitch benefit cuts to save the plan from complete failure.  According the the National Real Estate Investor, DPFP was once applauded for it’s “diverse investment portfolio“ but turns out it may have all been a fraud as the pension’s former real estate investment manager, CDK Realy Advisors, was raided by the FBI in April 2016 and the fund was subsequently forced to mark down their entire real estate book by 32%.  Guess it’s pretty easy to generate good returns if you manage a book of illiquid assets that can be marked at your “discretion“.

The rampant fraud at the DPFP left the fund over $3BN underfunded and its board of directors with no other option but to seek a $600mm infusion from taxpayers to keep the fund afloat.  Even worse, a review of the pension’s financials revealed $2.11 of annual benefit payments to members for every $1.00 contributed to the plan by members and taxpayers (mostly taxpayers)…the typical pension Ponzi whereby plan administrators borrow from assets reserved to cover future liabilities (which are likely impaired) to cover current claims in full.

This Zero Hedge article was posted on their Internet site at 7:00 p.m. on Tuesday evening EDT — and it’s the second contribution of the day from Brad Robertson.  Another link to this news item is here.

Why the Coming Wave of Defaults Will Be Devastating — Charles Hugh Smith

Without the stimulus of ever-rising credit, the global economy craters in a self-reinforcing cycle of defaults, deleveraging and collapsing debt-based consumption.

In an economy based on borrowing, i.e. credit a.k.a. debt, loan defaults and deleveraging (reducing leverage and debt loads) matter. Consider this chart of total credit in the U.S. Note that the relatively tiny decline in total credit in 2008 caused by subprime mortgage defaults (a.k.a. deleveraging) very nearly collapsed not just the U.S. financial system but the entire global financial system.

In an economy based on borrowing, i.e. credit a.k.a. debt, loan defaults and deleveraging (reducing leverage and debt loads) matter. Consider this chart of total credit in the U.S. Note that the relatively tiny decline in total credit in 2008 caused by subprime mortgage defaults (a.k.a. deleveraging) very nearly collapsed not just the U.S. financial system but the entire global financial system.

Every credit boom is followed by a credit bust, as uncreditworthy borrowers and highly leveraged speculators inevitably default. Homeowners with 3% down payment mortgages default when one wage earner loses their job, companies that are sliding into bankruptcy default on their bonds, and so on. This is the normal healthy credit cycle.

Bad debt is like dead wood piling up in the forest. Eventually it starts choking off new growth, and Nature’s solution is a conflagration–a raging forest fire that turns all the dead wood into ash. The fire of defaults and deleveraging is the only way to open up new areas for future growth.

Unfortunately, central banks have attempted to outlaw the healthy credit cycle. In effect, central banks have piled up dead wood (debt that will never be paid back) to the tops of the trees, and this is one fundamental reason why global growth is stagnant.

This right-on-the-money commentary by Charles showed up on this website on Thursday sometime — and this is the third offering of the day from Brad Robertson.  Another link to this very worthwhile commentary is here.

Doug Noland: Like Old Times: Q2 2016 Flow of Funds

It was another interesting week. No meaningful surprises from the Fed or the Bank of Japan (BOJ). A Bloomberg headline capture market sentiment: “Kuroda’s Journey From Shock-And-Awe to Bond Market Fine-Tuning.” The Fed again refrained from a second baby step, while forewarning the markets of a likely hike in December. Market participants chuckled as they bought stocks, risk assets and precious metals.

And it’s all been fun and games. Except for the harsh reality that QE hasn’t been working, and the markets know that policymakers know. Policymakers will never admit as much, but they’ve run short of options. Japan is an absolute policy debacle in the making. European bank problems continue to fester – in Italy, Germany and elsewhere. Here in the U.S., a potentially destabilizing election is now just about six weeks away. And let’s not forget the historic Chinese Credit Bubble that gets scarier by the week.

September 23 – CNBC (Katy Barnato): “Toxic loans in the Chinese financial system could be 10 times as high as official estimates suggest, Fitch Ratings has warned. The international ratings agency said in a report on Thursday that, as a proportion of China’s total loan pool, non-performing loans (NPLs) could be as high as 15-21 percent. By comparison, official data put the NPL ratio for commercial banks at 1.8%… ‘There seems a high likelihood that banks’ NPL ratios will continue rising over the medium term, in light of this discrepancy. There are already signs of stress, most obviously in the increased frequency with which banks are writing off or offloading loans, such as those to asset-management companies’… Solving China’s bad loan problem would result in a capital shortfall of 7.4 trillion-13.6 trillion yuan ($1.1-2.1 trillion), equivalent to around 11-20% of China’s economy, Fitch said.”

Most of Doug’s Credit Bubble Bulletin this week is pretty dry reading as he focuses on the Flow of Funds from the second quarter.  But there’s still good stuff in it if your a numbers wonk like I am.  Another link to Doug’s commentary is here.

Inside the fight to reveal the CIA’s torture secrets — The Guardian

Daniel Jones had always been friendly with the CIA personnel who stood outside his door.

When he needed to take something out of the secured room where he read mountains of their classified material, they typically obliged. An informal understanding had taken hold after years of working together, usually during off-peak hours, so closely that Jones had parking privileges at an agency satellite office not far from its McLean, Virginia, headquarters. They would ask Jones if anything he wanted to remove contained real names or cover names of any agency officials, assets or partners, or anything that could compromise an operation. He would say no. They would nod, he would wish them a good night, and they would go their separate ways.

After midnight in the summer of 2013, Jones deliberately violated that accord.

Jones, a counter-terrorism staffer, had become the chief investigator for the Senate intelligence committee, the CIA’s congressional overseer, on its biggest inquiry. For five years, he had been methodically sifting through internal CIA accounts of its infamous torture program, a process that had begun after the committee learned – thanks to a New York Times article, not the agency – that a senior official had destroyed videotapes that recorded infamously brutal interrogations. The subsequent committee inquiry had deeply strained a relationship with Langley that both sides badly wanted to maintain. The source of that strain was simple: having read millions of internal emails, cables and accounts of agency torture, Jones had come to believe everything the CIA had told Congress, the Bush and Obama White Houses and the public was a lie.

This huge essay put in an appearance on theguardian.com Internet site back on September 9 — and for obvious reasons it had to wait for my Saturday column.  I haven’t read it myself, but nothing would shock me when it comes to the American Empire now.  I thank Patricia Caulfield for sending it our way last Sunday — and another link to it is here.

Why Canadians Are Being Offered Cash to Abandon Their Homes

On the far eastern edge of Canada sits Little Bay Islands, a beautiful, dying village divided by crisis. The fish plant was shuttered half a decade ago, and most supporting businesses—as well as the school—have closed with it. Perry Locke is among the tiny population that’s left. He served as the mayor, the fire chief and now runs the power-generating station. His son was the last student enrolled in town.

Fishing villages like this one built Newfoundland and Labrador, a coastal province sent into a tailspin by a fishery collapse, oil-price slump and mounting debt that left it with Canada’s most severe fiscal and demographic crisis. The provincial government now is pushing to close places like Little Bay Islands altogether rather than service them, offering Locke and his neighbors at least C$250,000 ($189,000) each to leave—and spurring a bitter, three-year fight over whether to cash out or endure.

“It’s like a disease. Once a community gets infected, there’s no cure for it. You’ll either stay sick from it, or you’ll die,” said Locke, 51, standing on his porch in July overlooking the bay. He voted to stay, worried he’ll lose his job if everyone leaves and the power station closes. Many residents now blame him for ruining a windfall. “Nothing we can do to change it now. The damage is done. And the damage is irreversible.”

Little Bay Islands is a world away from Canada’s glamorous global cities: Toronto and its big banks, Vancouver and its housing boom, Calgary and its oil patch. The town, and all of Newfoundland for that matter, have come to represent the grim underbelly of Canada’s economic outlook: a commodity bust, weak growth, mounting provincial debt and an aging population. The province is closing libraries and schools, reining in health care and boosting taxes, all while International Monetary Fund Managing Director Christine Lagarde and others praise Prime Minister Justin Trudeau for using fiscal policy to drive national expansion.

Having been to Newfoundland and Labrador twice in my life, I’m intimately familiar with this situation, having visited many ‘villages’ such as this one.  Yesterday, Roy Stephens flew back from a 7-month stint in that province — and knows exactly of what I speak.  This very interesting essay appeared on the bloomberg.com Internet site on Wednesday — and obviously had to wait for a spot in today’s column.  Another link to it is here — and I thank Chris Powell for pointing it out.

German Politicians Are Getting Nervous About Deutsche Bank

Just a few short days after Germany’s premier financial publication Handelsblatt dared to utter the “n”-word, when it said that in the aftermath of last week’s striking $14 billion DoJ settlement proposal, “some have even raised the possibility of a government bailout of Germany’s largest bank, which would be a defining event and a symbolic blow to the image of Europe’s largest economy“, German lawmakers are finally starting to get nervous.

According to Bloomberg, Deutsche Bank’s suddenly troubling finances, impacted by the bank’s low profitability courtesy of the ECB’s NIRP policy as well as mounting legal costs courtesy of years of legal violations, “are raising concern among German politicians.” At a closed session of Social Democratic finance lawmakers on Tuesday, Deutsche Bank’s woes came up alongside a debate over Basel financial rules. Participants discussed the U.S. fine and the financial reserves at Deutsche Bank’s disposal if it had to cover the full amount.

While the participants in the meeting did not reach any conclusions on the likely outcome, the discussion signals that the risks facing Deutsche Bank have the attention of Germany’s political establishment. Which means it’s almost serious enough where the politicians, in the parlance of Jean-Claude Juncker, “have to lie” or in this case redirect attention, ideally abroad: the German Finance Ministry last week called on the U.S. to ensure a “fair outcome” for Deutsche Bank, citing cases against other banks where the government settled for reduced fines.

Actually lying also works: on February 9 German Finance Minister Wolfgang Schaeuble told Bloomberg Television that he has “no concerns about Deutsche Bank.” That has probably changed.

Just nervous?  I’d be scared to death if I were them.  This Zero Hedge news item put in an appearance on their website at 4:05 a.m. on Friday morning EDT — and I thank Richard Saler for sending it our way.  Another link to this story is here.

Washington Blames Moscow for the U.N. Aid Convoy Destruction in Syria — John Batchelor Interviews Stephen F. Cohen

Deservedly the end of the Syrian Cease fire got top billing in this week’s discussion. We watched as Obama addressed the U.N. and exercised some mud slinging excuses for the failure (“brutish Russians”), and a pressing need (more deflection), for a united effort in solving the refugee crisis. Both Russia and Washington are trading blame for the mess in both Ukraine and Syria. This situation is made worse by an attack (by either Russians, the Syrians, U.S. or Turkish forces) against a U.N. aid convoy on Tuesday – in rebel held territory. Cohen does not think the direction of Russia’s Lavrov and Washington’s Kerry has ended the coalition effort for a ceasefire, and Cohen points out that there may be a Washington vandalism element to the US air strike against Syrian Army forces. American claims that this was accidental are hard to believe- and the Russians (and especially the Syrians) do not believe them.  In addition the attack on the U.N. humanitarian convoys sounds like a false flag attack to further muddy the waters after the U.S. air strike on Syrian Army forces on the 17th of September. Cohen also mentions the significance of a New York Times article quoting Sec. Def. Ashton Carter as stating that he [Pentagon officials] refused to state that they would comply with the deal (ceasefire). This is a direct refusal to say they would follow Obama’s policy decisions. Cohen has much more to say about what this means in the broadcast – but Washington has a long history of such sabotage to official policies.

The next issue is Ukraine as that uprooted state continues to wither. Both France’s President Hollande and Germany’s Chancellor Merkel have abandoned Kiev. And in Washington there is an acknowledgement that the “Ukraine Project” is not working out. But Poroshenko is not being abandoned by Washington and is even meeting Hillary Clinton in New York City. Cohen feels there is little hope for Ukraine now and questions what any continued association is worth with a national leader who cannot fulfil any functions that will benefit Washington interests? Or perhaps my question is more central to this issue about when do we get to count Ukraine in on the list of states Washington has destroyed?

The recent Russian elections are the next focus and Batchelor and Cohen examine the process in great detail. It is noteworthy that Cohen considers the United States as more democratic than Russia. They go on to compare political realities in Syria and Ukraine. The latest failure of the Syrian ceasefire saw Vitaly Churkin, the Russian Ambassador to the U.N. asking the question: “Who is running Washington foreign policy, the Secretary of Defense?” It is the perfect question and Cohen maintains is one that is very important to Putin. That would be an understatement given that if any agreement can be subjected to sabotage by what amounts to rogue elements composed of powerful government interests at odds with an American president, then rapprochement or any diplomacy will be very difficult. If that is the reality, Putin knows that war is more likely.

This 40-minute audio interview was posted on the audioboom.com Internet site on Tuesday — and for length and content reasons, it had to wait [as always] for my Saturday column.   An, as always, a great big THANK YOU to Larry Galearis for above executive summary.  Another link to it is here.

Russia confirms: U.N. convoy explosion was a U.S. diversion

Below is the official statement of Russian Defense Ministry official spokesperson Igor Konashenkov in response to allegations spread by U.S. presidential advisor on national security, Ben Rhodes, that Russia launched an airstrike on the humanitarian convoy in Aleppo on September 19th:

The seriousness of the charges voiced by the U.S. President’s deputy advisor on national security, Mr. Ben Rhodes, who has accused Russia of launching an air strike on the humanitarian convoy in Aleppo, as well as leaks from the American side on the alleged presence of an Su-24 there, have compelled us to reveal delicate details of the tragic incident on September 19th.

I’ll start with the fact that the Ministry of Defense of Russia possess objective information on the control of the air situation on the evening of September 19th at the time when an airstrike was allegedly launched at the humanitarian convoy.

Russian planes did not launch any strikes in the area of Urum al-Kubra and had no plans to. There were no Russian planes in the area at all.

The rest of Konashenkov’s statement, plus video clip, is posted in this story that found a home over at the fort-russ.com Internet site on Thursday.  It’s the second offering in a row from Larry Galearis — and another link to it is here.

Why the recent developments in Syria show that the Obama Administration is in a state of confused agony — The Saker

The latest developments in Syria are not, I believe, the result of some deliberate plan of the USA to help their “moderate terrorist” allies on the ground, but they are the symptom of something even worse: the complete loss of control of the USA over the situation in Syria and, possibly, elsewhere.  Let me just re-state what just happened:

First, after days and days of intensive negotiations, Secretary Kerry and Foreign Minister Lavrov finally reached a deal on a cease-fire in Syria which had the potential to at least “freeze” the situation on the ground until the Presidential election in the USA and a change in administration (this is now the single most important event in the near future, therefore no plans of any kind can extend beyond that date).

Then the USAF, along with a few others, bombed a Syrian Army unit which was not on the move or engaged in intense operations, but which was simply holding a key sector of the front.  The U.S. strike was followed by a massive offensive of the “moderate terrorists” which was barely contained by the Syrian military and the Russian Aerospace forces.  Needless to say, following such a brazen provocation the cease-fire was dead.  The Russians expressed their total disgust and outrage at this attack and openly began saying that the Americans were “недоговороспособны”.  What that word means is literally “not-agreement-capable” or unable to make and then abide by an agreement.

This opinion piece, which is a must read in my opinion, appeared on thesaker.is Internet site yesterday — and it’s the third contribution in a row from Larry G.  Another link to it is here.

The Associated Press Interviews Syrian President Bashar al-Assad

Journalist: President Assad, thank you very much for this opportunity to be interviewed by the Associated Press.

President Assad: You are most welcome in Syria.

Question 1: I will start by talking about the ceasefire in Syria. Russia, the US, and several countries say a ceasefire could be revived despite the recent violence and the recrimination. Do you agree, and are you prepared to try again?

President Assad: We announced that we are ready to be committed to any halt of operations, or if you want to call it ceasefire, but it’s not about Syria or Russia; it’s about the United States and the terrorist groups that have been affiliated to ISIS and al-Nusra and Al Qaeda, and to the United States and to Turkey and to Saudi Arabia. They announced publicly that they are not committed, and this is not the first attempt to have a halt of operations in Syria. The first attempt was in last February, and didn’t work, I think, because of the United States, and I believe that the United States is not genuine regarding having a cessation of violence in Syria.

This long interview was conducted on Thursday in Damascus — and posted on the sana.sy Internet site.  There’s no video to watch, but the transcript is there in full.  I haven’t read it yet, but plan to this weekend sometime.  It’s the final offering of the day from Larry Galearis — and I thank him on your behalf.  Another link to the interview is here.

Take the Red Pill…or Fight World War 3 – Interview With The Saker

Only those with their head in the sand are not aware that NATO, the western allies and the Wall Street bankers are determined to follow a course that will lead to World War 3. With Russia in particular and any other country that stands in their way. In a recent interview Vladimir Putin chided western journalists for the false narratives that are being published in the Main Stream Media press. He said:

“We know year by year what’s going to happen, and they know that we know. It’s only you that they tell tall tales to, and you buy it, and spread it to the citizens of your countries. You people in turn do not feel a sense of the impending danger – this is what worries me. How do you not understand that the world is being pulled in an irreversible direction? While they pretend that nothing is going on. I don’t know how to get through to you anymore.”

More recently the highly respected film director Oliver Stone said:

“We’re going to war — either hybrid in nature to break the Russian state back to its 1990s subordination, or a hot war (which will destroy our country). Our citizens should know this, but they don’t because our media is dumbed down in its “Pravda”-like support for our “respectable,” highly aggressive government.”

This interview with The Saker was posted on his website last Sunday.  It was in one of my columns earlier this week.  I don’t know which one — and I haven’t got the time to look.  But I said I would also post it in my Saturday missive if you didn’t have time for it then, so here it is now.  It’s an absolute must read — and another link to it is here.  I thank ‘aurora’ for passing it around.

Russia Trumps USA Energy War in Mideast — F. William Engdahl

In a fundamental sense the entirety of the five-year-long war over Syria, as well as the entire Arab Spring from Libya to Egypt to Iraq has been about control of hydrocarbon resources—oil and natural gas– and of potential hydrocarbon pipelines to the promising markets of the European Union. Dick Cheney’s 2001 War on Terror was primarily about providing the excuse for a direct U.S. military takeover of the vast oil fields of Iraq and other key Middle East countries. Washington’s War on Syria has been less a war for control of oil. Rather, it’s about who controls whose natural gas flows via which pipelines through which borders to the vast E.U. gas market. At this point it looks more and more as if Russia’s geopolitical and geo-economic strategy is trumping (no Donald pun intended) Washington’s very troubled game in the region. Turkey is apparently deciding to become a key ally in this Russian energy trump.

At the beginning of September Turkey’s Minister of Energy, Berat Albayrak met the CEO of Gazprom Alexei Miller in Istanbul for talks about reviving Russia’s mammoth Turkish Stream natural gas pipeline from Russia, under the Black Sea to and through Turkey to the border of EU member country, Greece.

The progress on the Russian-Turkish gas pipeline came to an abrupt halt as relations between Moscow and Istanbul broke following the Turkish downing of a Russian jet over Syrian territory.

Following the September 1 Istanbul talks, one week later Berat Albayrak’s energy ministry issued the first permits for the start of the project. Gazprom issued the statement, “Accords were reached at the meeting to complete the issue of all required permits for initiation of the Turkish Stream project implementation as soon as possible. Commercial negotiations on conditions of Russian gas supplies to Turkey will continue.”

This is another story that appeared in my column earlier in the week that I said would be posted in my Saturday column as well.  This Engdahl article appeared on the journal-neo.org Internet site last Saturday — and is definitely worth reading as well in case you didn’t have time earlier in the week.  Another link to it is here — and I thank Roy Stephens for this one.

Untold Story of Saudi-Led Coalition’s War on Yemeni Historical Heritage

The Saudi-led coalition is not only killing civilians in Yemen but also erasing the country’s extremely rich millennium-old historical heritage. However, the destruction of Yemen remains a story largely untold, Christine Bierre, Chief Editor of Nouvelle Solidarite, told Sputnik.

The war in Yemen is a story which is often neglected by news organizations, even though it is now into its second year.

In order to remove the Houthis, a Zaidi Shia group from power in Yemen, a coalition of ten states unleashed an all-out war against the Middle Eastern country back in March 2015. The intervention has already resulted in more than 7-10 thousand Yemenis dead, 10-30 thousand wounded and more than 2 million displaced. However, the most disturbing fact about the conflict is that the Saudi-led coalition’s war is being waged with the West’s — most notably the U.S., the U.K. and France’s — tacit approval.

This very interesting, but equally disturbing story showed up on the sputniknews.com Internet site at 2:17 p.m. Moscow time on their Thursday afternoon, which was 6:17 a.m. in Washington — EDT plus 8 hours.  For obvious content reasons, it had to wait for today’s column — and is worth reading as well if you have the interest.  I thank Bob Stroup for sending it our way — and another link to it is here.

Oil bet gone wrong: rusting tankers and rigs clog up Asian waters

Some 15 km (9 miles) from the bustling port of Singapore,a rusting tanker as big as the world’s largest aircraft carriers lies idle in a muddy estuary flanked by mangrove trees on the coast of southern Malaysia.

The 340-metre (1,115 ft) “FPSO Opportunity”, a hulking so-called Floating Production, Storage and Offloading (FPSO) vessel capable of drilling for oil in deep waters, is currently surplus to requirements along with scores of other rigs, tankers and support vessels in an era of cheap oil.

The fleet of mothballed giant vessels anchored around Southeast Asian waters is the physical fallout of an oil downturn heading into its third year, and a stark reminder of how badly the industry miscalculated market conditions.

“There was a misguided focus‎ on scarcity in the supply side from the early 2000s,” said David Fyfe, head of research at oil and commodity trading firm Gunvor.

“As an industry, they were complacent. They thought because cost was high, prices will remain high … (but) then there was the advent of shale. Since that period, there is a realization that there is no scarcity of oil.”

This interesting, but unhappy Reuters story put in an appearance on their Internet site at 5:45 a.m. EDT on Thursday morning — and it comes courtesy of Brad Robertson.  Another link to this article is here.

Mothballing the World’s Fanciest Oil Rigs Is a Massive Gamble

In a far corner of the Caribbean Sea, one of those idyllic spots touched most days by little more than a fisherman chasing blue marlin, billions of dollars worth of the world’s finest oil equipment bobs quietly in the water.

They are high-tech, deep water drill ships — big, hulking things with giant rigs that tower high above the deck. They’re packed tight in a cluster, nine of them in all. The engines are off. The 20-ton anchors are down. The crews are gone. For months now, they’ve been parked here, 12 miles off the coast of Trinidad & Tobago, waiting for the global oil market to recover.

The ships are owned by a company called Transocean Ltd., the biggest offshore-rig operator in the world. And while the decision to idle a chunk of its fleet would seem logical enough given the collapse in oil drilling activity, Transocean is in truth taking an enormous, and unprecedented, risk. No one, it turns out, had ever shut off these ships before. In the two decades since the newest models hit the market, there never had really been a need to. And no one can tell you, with any certainty or precision, what will happen when they flip the switch back on.

It’s a gamble that Transocean, and a couple smaller rig operators, felt compelled to take after having shelled out millions of dollars to keep the motors running on ships not in use. That technique is called warm-stacking. Parked in a sa

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