Thursday, April 16, 2015
Oil-Rich Nations Are Selling Off Their Petrodollar Assets at Record Pace
In the heady days of the commodity boom, oil-rich nations accumulated billions of dollars in reserves they invested in U.S. debt and other securities. They also occasionally bought trophy assets, such as Manhattan skyscrapers, luxury homes in London or Paris Saint-Germain Football Club.
Now that oil prices have dropped by half to $50 a barrel, Saudi Arabia and other commodity-rich nations are fast drawing down those “petrodollar” reserves. Some nations, such as Angola, are burning through their savings at a record pace, removing a source of liquidity from global markets.
If oil and other commodity prices remain depressed, the trend will cut demand for everything from European government debt to U.S. real estate as producing nations seek to fill holes in their domestic budgets.
“This is the first time in 20 years that OPEC nations will be sucking liquidity out of the market rather than adding to it through investments,” said David Spegel, head of emerging markets sovereign credit research at BNP Paribas SA in London.
Saudi Arabia, the world’s largest oil producer, is the prime example of the swiftness and magnitude of the selloff: its foreign exchange reserves fell by $20.2 billion in February, the biggest monthly drop in at least 15 years, according to data from the Saudi Arabian Monetary Agency. That’s almost double the drop after the financial crisis in early 2009, when oil prices plunged and Riyadh consumed $11.6 billion of its reserves in a single month.
The International Monetary Fund commodity index, a broad basket of natural resources from iron ore and oil to bananas and copper, fell in January to its lowest since mid-2009. Although the index has recovered a little since then, it still is down more than 40 percent from a record high set in early 2011.
Oil futures in New York traded at $52.78 a barrel today, 49 percent lower than a year ago.
Reserves Drop
A concomitant drop in foreign reserves, revealed in data from national central banks and the IMF, is affecting nations from oil producer Oman to copper-rich Chile and cotton-growing Burkina Faso. Reserves are dropping faster than during the last commodity price plunge in 2008 and 2009.
In Angola, reserves dropped last year by $5.5 billion, the biggest annual decline since records started 20 years ago. For Nigeria, foreign reserves fell in February by $2.9 billion, the biggest monthly drop since comparable data started in 2010.
Algeria, one of the world’s top natural gas exporters, saw its funds fall by $11.6 billion in January, the largest monthly drop in a quarter of century. At that rate, it will empty the reserves in 15 months.
Sales Decline
Excluding Iran, whose sales are subject to some sanctions, members of the Organization of Petroleum Exporting Countries are expected to earn $380 billion selling their oil this year, according to U.S. estimates. That represents a $350 billion drop from 2014 -- the largest one-year decline in history.
“The shock for oil-rich countries is enormous,” Rabah Arezki, head of the commodities research team at the IMF in Washington, said in an interview.
Oil-rich countries will sell more than $200 billion of assets this year to bridge the gap left between high fiscal spending and low revenues, Spegel said.
The drawdown reverses a decade-long inflow into the coffers of commodity-rich nations which helped to increase funds available for investment and boost asset prices. Bond purchases have helped to keep interest rates low.
Oil producers recycled a large portion of their petrodollars -- a term coined for the dollar-denominated oil trade -- by buying sovereign debt of the U.S. and other countries. As they draw down reserves, Middle East countries are likely to sell “low-yielding European assets,” George Saravelos, strategist at Deutsche Bank AG, said in a note to clients.
Potential Effects
The potential impact of the selloff has divided analysts and officials.
One argument is that petrodollars and other commodity-linked foreign reserves are not a large enough force in an ocean of investments from pension funds, asset managers, insurers and individuals to make a real impact in asset prices and overall liquidity. Plus, bond purchases by central banks involved in so-called quantitative easing mitigates the impact of sales.
The other school of thought, broadly backed by the IMF, says that petrodollars matter because they’re significant enough to turn market sentiment as flows switch direction.
Market Sentiment
The change in commodity-related foreign reserve flows will have “an impact around the margins” in global markets, said Albert Edwards, global strategist at Societe Generale SA.
The disagreement is partly due to a lack of transparency. Tracking the change in commodity-driven savings is difficult because not all countries release timely data and some don’t disclose the size of their sovereign wealth funds.
Nonetheless, available data shows foreign savings by commodity-rich nations are dropping across the board. In Chile, the world’s top copper exporter, foreign savings fell $1.9 billion in February, the biggest drop in three years.
Analysts and officials anticipate that commodity-rich countries will continue selling off foreign assets through the year.
The IMF’s Arezki said that unless they cut spending, resources-rich nations “have no choice but to draw on their financial assets when available” as oil prices are well below the fiscal break-even needed by many exporting nations. The IMF estimates that many oil countries would only balance their budgets if crude prices recover to $75 or higher.
Saudi Arabia’s finance minister said in February that the world’s largest oil exporter had enough reserves to to last for “quite some time.”
“We have learned from the past,” Ibrahim Abdulaziz Al-Assaf told CNBC. “The oil market, everybody knows, goes through ups and downs and peaks and valleys.”
Credit to Bloomberg
Turkey's President Recep Tayyip Erdogan: "I condemn the Pope"
Istanbul: Turkish President Tayyip Erdogan has condemned Pope Francis for saying that the 1915 mass killing of Armenians was genocide and warned him not to make such a statement again.
The pontiffpublicly called the killing of as many as 1.5 million Armenians "genocide" on Sunday, prompting a diplomatic row with Turkey, which summoned the Vatican's envoy and recalled its own.
Prelates take photos as Pope Francis celebrates an Armenian-Rite Mass in the Vatican on Sunday. Photo: AP
Muslim Turkey agrees Christian Armenians were killed in clashes with Ottoman soldiers that began on April 15, 1915, when Armenians lived in the empire ruled by Istanbul, but denies hundreds of thousands were killed and that this amounted to genocide.
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"We will not allow historical incidents to be taken out of their genuine context and be used as a tool to campaign against our country", Mr Erdogan said on Tuesday in a speech to a business group. "I condemn the Pope and would like to warn him not to make similar mistakes again".
While other Turkish politicians, and now Mr Erdogan, have lashed out at the Pope, some ordinary Turks have dismissed the row as empty politics and voiced a desire to leave history be.
Mr Erdogan's comments are likely to draw attention to whether the United States, a traditional ally of NATO member Turkey, will eventually use the term "genocide" for the mass killings.
Unlike almost two dozen European and South American states that use the term, Washington avoids it and has warned legislators that Ankara could cut off military co-operation if they voted to adopt it.
Reuters
Credit to Sydney Morning Herald
Iran Declares A War On Mecca By Banning Shiites To Do Pilgrims To The Holiest Sites In Islam
This is becoming unbelievable. Iran has just forbidden its citizens from practicing the Hajj to Mecca, one of the five pillars of Islam. Iran’s prohibition to travel to Islam’s holiest sites, Mecca and Media, confirms what we have been saying all along, that Iran will eventually abandon Mecca altogether. As it seems the Sunni-Shiite divide reveals a major schism between two Muslim holy cities, Mecca on the one hand and Karbala on the other, an un-healable divide that Scriptures in Isaiah 21 predicts Iran will end up nuking Arabia.
Iran in order to divert attention from Mecca found the typical excuse that governments always do to spark a rivalry: they claimed that two teenaged boys were abused by Saudi airport officials while returning from a pilgrimage.
So Iran took this action regardless that in the incident, no abuse has happened, and the two policemen who allegedly attempted the abuse (which no one knows the details) were identified and detained by Saudi police. This was even confirmed by Ali Ghaziasgar, the Supreme Leader’s representative for Hajj affairs was quoted as saying.
But Iran’s alleged abuse story did what Iran wanted, sparked unauthorized protests at the Saudi Embassy in Tehran on Saturday with increased public anger has grown over the incident, with President Hassan Rouhani even ordering an investigation and Iran’s Foreign Ministry summoning a Saudi diplomat for an explanation.
Iranian protesters demonstrate against Saudi-led strikes in Yemen outside the Saudi Arabian Embassy in Tehran
Muslims undertaking the umrah in Mecca – the pilgrimage which is not obligatory in Islam can be taken at any time during the year (photo from RT)
Iranians burn Israeli and US flags: The shiite nation opposes Saudi Arabia’s alliance with the United States
What is also interesting is to see that in these rallies, Shiites are denouncing Israel alongside with Saudi Arabia. “Sheba and Dedan” are viewed as Jews for their support of Netanyahu’s anti-Iran nuclear ambitions. So Iran hates Arabia more than they hate Israel. Ayatollah Husayn Ali Montazeri, at the time Khomeini’s successor-designate, met with the foreign guests and denounced the Saudis as “a bunch of English agents from Najd who have no respect either for the House of Allah or for the pilgrims who are the guests of Allah.” Just as Jerusalem would be liberated from the “claws of usurping Israel,” Mecca and Medina would be liberated from the “claws of Al Sa‘ud.” (1)
But such hatred of Saudi Arabia does not only stem from Shiites. A Sunni cleric at the conference apparently took the analogy still further, denouncing the Saudis as Jews. The insinuation that the Saudis were Jews–the worst possible libel–echoed an old piece of Shi‘ite bigotry that attributed Jewish origins to the Saudi ruling family.
This and for many other reasons, the noose is tightening on Al-Sa’ud now rummages to salvage its Sunni Alliance to save itself especially after Turkey and Pakistan abandoned the coalition. To Shia, Karbala supersedes Mecca. In the Shiite faith, there was a feud between the two cities. When Mecca felt haughty and arrogant that Allah warns her, he will toss the Ka’ba in hellfire and will utterly destroy her. (2)
Karbala, not Mecca is becoming Iran’s holiest place and a history lesson could help in understanding why this divide cannot be healed, even by the Antichrist himself.
THE HISTORY BEHIND THE HATRED
It was in Karbala that al-Ḥusayn ibn ‘Alī ibn Abī Ṭālib was martyred and to Shiites, he is their Messiah. He is the son of Ali ibn Abi Ṭalib (fourth Rashidun Caliph of Sunni Islam, and first Imam of Shia Islam) and Fatimah Zahra, the daughter of Muhammad himself. Al-Husayn refused to pledge allegiance to Yazid I, the Umayyad caliph and at Karbala his caravan was intercepted by Yazid I‘s army. He was killed and beheaded in the Battle of Karbala in 680 (61 AH) along with most of his family and companions. The annual memorial for him, his family, his children and his companions is called Ashura (tenth day of Muharram) and is a day of mourning for Shiite Muslims. The killings at Karbala fueled the later Shiite movements. Anger at Husayn’s death was turned into a rallying cry that helped undermine and ultimately overthrow the Umayyad Caliphate.
Westerners should comprehend the significance of this divide on how Shiite messianism and near worship of Hussein whom they blame Arabia for, could appreciate a scene from Karbala as the grave of Hussein is paraded on Ashura where millions have their needles stuck at the time when Hussein was killed:
In the song, Hussein from his death supposedly cries out to all the Shiite pilgrims:
“You know me. I am the redeemer (Messiah) of the world. I register your names [in heaven]. Welcome my visitors. O you vist me. I make a covenant with you. You know me. I am the redeemer of the world. Your banners you carry comfort me. Your tears quenches my thirst … I will not abandon you on day of judgment.”
Hussein’s mother is as if she was Mary, a saint that can also see them and her son was martyred as Messiah.
To add more insult to injury, the bedrock of sectarian conflict has always been the matter of the Imamate–the question of legitimate authority in Islam. Sunni-Shi‘ite differences took the form of Ottoman-Safavid armed conflict, beginning in the sixteenth century. That was perhaps the most divided century in Islamic history, marked by great wars of religion between Sunnis and Shi‘ites. When the holy cities were under Sunni Ottoman rule, there were years in which the Ottomans denied entry to Shi‘ites coming from Safavid domains. The Safavids reacted by trying to discourage the pilgrimage to Mecca and emphasizing the importance of Shi‘ite shrines in their own domains. (3) A repeat of this is not unlikely given the current schism between Iran and Arabia escalating into a major conflict.
Poster from 1987 with scarlet colored undergarments of the Ka’ba
Saudis, in their purifying zeal against Shiites, again demolished the domes of al-Baqi‘ in 1926, a move regarded by Shi‘ites as desecration of their hallowed shrines. The demolition created so profound a sentiment in Iran, especially in religious circles, that the Iranian government refused to recognize Ibn Sa‘ud’s rule. Instead, Iran demanded that a general assembly of Muslims be created to regulate the holy cities, while a Shi‘ite conference convened in Lucknow, India, called upon all Muslims to use every possible means to expel Ibn Sa‘ud from the Hijaz. (4)
Messianism and rightful rule between Sunni and Shia forces is now feeding the Syrian civil war that threatens to transform the map of the Middle East, spurred violence that is fracturing Iraq and even Yemen and widened fissures in a number of tense Gulf countries. Islam’s schism has been simmering for fourteen centuries. The divide will culminate between the two countries that compete for the leadership of Islam, Sunni Saudi Arabia and Shia Iran. Iran has used the sectarian divide to further their ambitions, especially in Syria, Iraq, Lebanon, and Bahrain.
Shiite holy city of Karbala
Mecca and The Seven Towers Of Light On Mount Babel
The Bible is also precise and pinpoints a geographic location for this “Babylon” as was predicted in Jeremiah 49:21, literally, “the Red Sea” which confirms Arabia’s destruction. This is also confirmed in Revelation 18 regarding the harlot city:
“And the kings of the earth, who have committed fornication and lived deliciously with her, shall bewail her, and lament for her, when they shall see the smoke of her burning” (Revelation 18:9). “And cried when they saw the smoke of her burning, saying, ‘What [city is] like unto this great city!” (Revelation 18:18).
And once one studies Isaiah 34, there should be no doubt. In nearly identical language concerning Mystery Babylon in Revelation 17, 18:
“Its streams shall be turned into pitch and its dust into brimstone; its land shall become burning pitch. It shall not be quenched night or day; its smoke shall ascend forever” (Isaiah 34:8-10).
Incredibly, almost three millennia before the discovery of fuel oil, Isaiah predicted the burning of the very thing that was used in Babel to build a name for the rebellious ones – the pitch. Pitch is bitumen and tar, which technically is simply crude oil.
This judgment on “Edom” which extends from Teman (Yemen) to Dedan on the Red Sea coast:
“Thus Says the Lord GOD; ‘Because that Edom hath dealt against the house of Judah by taking vengeance, and hath greatly offended, and revenged himself upon them. ‘Therefore thus Says the Lord GOD; ‘I will also stretch out mine hand upon Edom, and will cutt off man and beast from it; and I will make it desolate from Teman; and they of Dedan shall fall by the sword’” (Ezekiel 25:12-13).
Is it no wonder why Teman (Yemen) today is in turmoil as I write with the Shiites there upset with Arabia? Karbala will destroy Mecca. Students of the Bible should pay closer attention to the geographic locations which God focused on instead of their preconceived suppositions by imposing their own geography over the Bible.
ANTICHRIST BECOMES THE DIRECTION OF PRAYER
What Iran claims is obviously not the real reason to ban Muslims in Iran to carry out their duty of Hajj and Umra. The real reason is that Iran wants to do away with Mecca and make their dead Messiah at Karbala the direction of prayer. Even Iraqi Prime Minister Nouri al-Maliki in 2013 said that the Shiite holy city of Karbala must be the new Qibla (direction to which Muslims pray) instead of Mecca, which stirred anger from Sunnis worldwide. If and when Shiites do away with Mecca as direction of prayer and its significance is undermined, Shiite Iran, united with Shiite Iraq and Yemen which is brewing by the day is the more reason to see how Iran will threaten Arabia (Isaiah 21).
The non-Wahhabist nature of Iran and Turkey are key to understanding that Mecca’s central focus and direction could change as in Sufi practice, it is the leader in the center who becomes the direction of prayer instead of Mecca as the Sufi Jalal al-Din al-Rumi taught, where this one is called The Prince who gains complete loyalty as al-Rumi said: “The Shaikh had become the Light of God. And whoever turns his back on the Light of God to face the wall of the prayer niche has assuredly turned his back on Mecca …” This is why they form the shape of a chandelier with the niche, the light of Allah, the luciferian (Luminous one) stands in the middle. And by this we can understand how the Antichrist will be worshipped.
SOURCES
(1) Montazeri’s speech, Radio Tehran, 27 November 1987, quoted in FBIS, 29 November 1987.
(2) This, in accordance to one very popular Shiite belief which utterly terrifies and angers Saudi Arabia:
Once the land of Ka’bah declared proudly, ‘Which land is like me? Allah has made His House on me. People from all parts of the earth come to pay homage to me. I have been made sacrosanct (haram) and sacred by Allah.’ On hearing this Allah, revealed, ‘Be silent! Wait a little (before you say anything further). By My Might and My Honour, the excellence and distinction I have granted to the land of Karbala is more than what I have given you. Compared to Karbala, your position is like a needle head sized drop in front of the sea. If the dust of Karbala had not been there, I would never have bestowed this honour upon you. If the one resting in Karbala (Imam Husain (a.s.)) had not been there, I would neither have created you nor the House over which you are so haughty. Wait, adopt humility and modesty and don’t be arrogant and boastful. Don’t try to prevail over Karbala in importance (as that is not possible). Else I will be displeased with you and throw you in Hell.’ (Kaamil al-Ziarat, p.267, tradition 13, narrating from Imam Ja’far al-Al-Sadiq also see here)
(3) See Khomeini’s Messengers in Mecca. On the doctrinal shift from pilgrimage to visitation, see Said Amir Arjomand, The Shadow of God and the Hidden Imam (Chicago: University of Chicago Press, 1984), pp. 168-170. On Iranian pilgrims in Mecca, see Suraiya Faroqhi, Pilgrims and Sultans: The Hajj under the Ottomans, 1517-1683 (London: Tauris, 1994), 134-39.
Credit to Shoebat.com
Wednesday, April 15, 2015
Congresswoman Michelle Bachmann: Obama's poor relationship with Israel will bring the return of Jesus
Former Republican congresswoman Michele Bachmann stated that President Barack Obama’s handling of the Iranian nuclear deal is a symbol of the coming of the end of times and the “imminent” return of Jesus Christ, during a recent radio interview.
Bachmann explained that if Obama and the United States turn their back on Israel, this would bring severe “curses” upon the United States, similar to those seen in the end of days.
But, Bachmann is not afraid of the end of days, rather she says that “these are the most exciting days in history” because nothing is more important than the return of Jesus Christ.
“We need to be so on fire right now about the things of Christ and the things of God, that needs to occupy our time and our thoughts virtually from morning to night because we have very little time — in my opinion — left before the second return of Christ. That’s good news!” the former congresswoman said. “The world is embracing degeneracy, but what that also tells us as we look at what the world is doing that they’re going according to God’s time clock. Pastors, preach it from the pulpit!”
“If we actually turn our back on Israel as we have seen Barack Obama do today, if that happens then I think we will see a scale and a level of push back in the United States, negative consequences,” Bachmann told Understanding the Times radio host Jan Markell on Sunday. “I don’t know what they are, but I believe that the Bible is true. And believe what the Bible says is that our nation and the people of our nation will reap a whirlwind, and we could see economic disasters, natural disasters.”
Bachmann is a fundamentalist Christian who believes the word of the bible to be complete truth, and that Jesus will return at the "End of Times" one day. Christians who believe this think that God will punish those who do not bless Israel.
While speaking on the radio show, Bachmann criticized Obama’s foreign policy, stating that he has taken an “anti-Israel” view on foreign policy, something unseen by a US President since 1948.
“The reason that you and I are talking about this is because we take as true what the Bible says in Genesis about Israel, and about the nation’s response to Israel,” Bachmann said. “We recognize that we have been singularly blessed in the United States because of the way the United States has blessed Israel over and over from 1948 until recent times.”
Credit to Jerusalem Post
Why Is WalMart Mysteriously Shuttering Stores Nationwide For "Plumbing Issues"?
Earlier this year, WalMart became one of several corporate heavyweights to lift wages for its meagerly compensated workers, around 500,000 of which are now set to receive at least $9/hour and $10/hour by Q1 2016 (that of course assumes they make it on $9 an hour for another 12 months and don’t seek out other employment by sheer necessity).
Meanwhile, as we noted earlier this month, the move by the country’s largest retailer to pay a few extra pennies to its (basically) minimum wage employees comes at a cost to the company’s suppliers because when you operate on the thinnest of margins in order to be the “low price leader,” someone has to pay for those wage hikes and you can’t pass along the costs to customers because many of your low-income patrons are operating from the same tax bracket as your low-paid employees.
As such, the poor companies along the supply chain are forced to lower their prices and of course they’re going to comply because well, you’re WalMart meaning you’re your vendors’ biggest account pretty much by default. The outcome is that “while WMT (or MCD or GAP or Target) boosts the living standards of its employees by the smallest of fractions, it cripples the cost and wage structure of the entire ecosystem of vendors that feed into it, and what takes place is a veritable avalanche effect where a few cent increase for the lowest paid megacorp employees results in a tidal wave of layoffs for said megacorp's vendors.”
If that doesn’t turn out to be enough in the face of an economy which isn’t really recovering and in which low-income shoppers are constrained by lackluster (and by that we mean nonexistent) wage growth, some sacrifices may have to be made. The problem is that laying people off and shuttering stores two months after a celebrated wage hike initiative doesn’t inspire much confidence and could turn into a PR issue, but one thing you could do is get creative, and while we’re not plumbers, we do find it curious that five geographically distinct WalMart stores have been closed in the past week for “ongoing plumbing issues that will require extensive repairs.”
Here’s more from a local CBS affiliate:
10 News called the county. Officials say they have no record of any code or permit violation at the Brandon location.And when 10 News was at the Walmart Tuesday, there were no marked septic trucks or plumbing vehicles in the lot."Where is everybody if they're supposed to be working on everything where are all the trucks?" asked shopper Melissa Dupuis.10 News asked a Walmart spokesperson whether the five stores were built from the same design, whether they had the same contractor, anything to understand why all of them closed on the same day for "plumbing issues."The only thing they have in common, the spokesperson said are the highest number of plumbing incidents.Leaving some customers to wonder "how many things have they not said. That's scary," said shopper Norma Espinosa.
And here’s more from a local ABC report in Florida:
BRANDON, Fla. - Employees of a Walmart in Brandon that abruptly closed Monday were among more than 2,000 employees nationwide who learned almost simultaneously they were being laid off.In a nearly identical manner at every store, Walmart corporate officials visited the five locations, called an impromptu meeting in the back of the store and told employees that the stores would be closing that evening.Besides Brandon, the affected locations were in Pico Rivera, Calif., Livingston, Texas, Midland, Texas, Tulsa, Okla.“The issues mostly relate to clogs and water leaks in the plumbing - we’ve had persistent issues over the last several years,“ said a Walmart spokesperson said.“These incidents impact the availability of water and create drainage issues for critical areas of the store which impacts our ability to serve customers,” she said.“Normally, we do our best to avoid disrupting a store’s operations. However, given this particular store had one of the highest incidences of plumbing issues in the entire fleet and in order to reduce the costs associated with these incidents, we felt it was in the store’s best interest to invest in making the necessary improvements to resolve these issues,” the spokesperson said.The I-Team has learned that none of the five affected stores have sought any plumbing permits for future repairs.“We’re in a holding pattern. We’re anxious to learn exactly what they’re planning,” said Pico Rivera City Manager James Enriquez, when we contacted him about the store’s closing Tuesday.Enriquez says when Walmart notified the city Monday that it was closing the store, he offered his full support in trying to get it back open.“My building official walked out there and didn’t see any work being done,” he said.
* * *
So there you have it, “clogs and water leaks” but no plumbing permits and 2,000 affected employees, many of whom were presumably just given the news that they would be getting a raise only to discover that they will get 60 days of pay before they’ll need to find a job at another WalMart location (hopefully one with no plumbing issues) or find other employment. We’ll leave it to readers to discern if these “clogs and leaks” are real or whether the company is just quietly shutting down stores across the country.
Credit to Zero Hedge
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