Implode-Explode Heavy Industries news feed http://implode-explode.com/ Tracking the many faces of the global credit implosion. en-us iehi-feed-61192 Thu, 01 Dec 2016 00:55:37 GMT Bombshell: OPEC+Russia Agree to Historic Oil Production Cut, Price Spikes 10% http://implode-explode.com/viewnews/2016-11-30_BombshellOPECRussiaAgreetoHistoricOilProductionCutPriceSpikes10.html OPEC confounded its doubters and sent crude oil prices soaring by agreeing to its first production cuts in eight years. The deal, designed to drain record global oil inventories, overcame disagreements between the group's three largest producers -- Saudi Arabia, Iran and Iraq -- and ended a flirtation with free markets that started in 2014. It was also broader than many had expected, extending beyond OPEC. Most strikingly, Russia agreed to unprecedented cuts to its own output.

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The impact on the energy world was immediate: benchmark oil prices gained as much as 10 percent in New York and the share prices of energy companies around the globe jumped alongside the currencies of large exporters. Whether that's sustained will depend on how strictly members of the Organization of Petroleum Exporting Countries stick to the agreement, something they haven't always done in the past.

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iehi-feed-61170 Tue, 29 Nov 2016 15:21:10 GMT Oil Climbs as Iraq Pledges to Cooperate With OPEC on Output Deal http://implode-explode.com/viewnews/2016-11-29_OilClimbsasIraqPledgestoCooperateWithOPEConOutputDeal.html Oil rose as Iraq's oil minister said it pledged to cooperate with OPEC to reach an agreement this week that's acceptable to all members.

Futures gained 2.2 percent in New York, reversing an earlier decline. Iraq's Oil Minister Jabbar al-Luaibi said Monday he's "optimistic" a deal will be reached at OPEC's summit in Vienna on Wednesday. However, after hours of discussions on Monday, an OPEC committee didn't reach agreement on production cuts during high-level talks in Vienna, according to a delegate. Iran and Iraq still have reservations on cuts, the delegate said.

Saudi Arabia previously said that the producer group doesn't necessarily need to curb oil output, after pulling out of a scheduled meeting with non-members including Russia.

... If OPEC fails to reach an output deal this week, oil prices may fall to the $20s, Amrita Sen, Energy Aspects Ltd. chief oil analyst, said in a Bloomberg Television interview in Vienna on Monday.

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iehi-feed-61071 Mon, 14 Nov 2016 17:23:58 GMT What Now? - Kunstler http://implode-explode.com/viewnews/2016-11-14_WhatNowKunstler.html Mr. Trump might not know it yet, but his chief task will be managing contraction. It would appear to be problematic, since his chief promise -- "to make America great again" -- is based on restarting the epic expansions of the 19th and 20th centuries. Well, things have changed... He begins to look like a man in a tunnel staring down the harsh light of the onrushing gravy train.

... The financialization of the economy is already playing into its disastrous climax as I write, with bond markets tanking all over the planet. What this means is that the long-ignored chickens of risk associated with debt are coming home to roost. As they do, they are going to shit over everything on the financial landscape. Industrial societies have been borrowing from the future to a grotesque degree for decades, pretending that these debts were assets rather than liabilities. That perception is about to change, and with it an enormous amount of presumed notional wealth is going to disappear.

... My sense of things is that this meta-predicament alone could overwhelm the Trump government from the very start. We could have problems with money orders of magnitude worse than anything FDR faced in 1933, with bank closures, the seizing of accounts, and the paralysis of everyday business.

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iehi-feed-61027 Tue, 08 Nov 2016 15:48:55 GMT OPEC Boss Warns of Oil-Market Instability If No Deal on Output http://implode-explode.com/viewnews/2016-11-08_OPECBossWarnsofOilMarketInstabilityIfNoDealonOutput.html The Algiers agreement helped push oil prices to a 15-month high above $50 a barrel, but crude has subsequently fallen as several OPEC states disputed production estimates that would determine the size of cuts required of the group's individual members. OPEC wants to put the changes into effect when it meets in Vienna on Nov. 30.

The group's internal disagreements have so far prevented a deal to secure cooperation from major non-OPEC suppliers such as Russia after rounds of talks in Vienna. The producers will meet again in the Austrian capital later this month. OPEC, which pumps about 40 percent of the world's oil, is trying to persuade suppliers from outside the group to join the cuts. The 14-member group has held talks in the past weeks with producer nations including Russia, Azerbaijan, Brazil, Kazakhstan and Mexico.

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iehi-feed-61024 Tue, 08 Nov 2016 06:05:29 GMT Iran to Sign $6 Billion Gas-Field Deal With Total, CNPC http://implode-explode.com/viewnews/2016-11-08_IrantoSign6BillionGasFieldDealWithTotalCNPC.html Iran plans to sign a preliminary $6 billion deal with France's Total SA on Tuesday to help develop an offshore gas field, an agreement that would mark the first Western energy investment there since international sanctions were lifted this year.

Under the deal, Total, China National Petroleum Corp. and Iran's state-owned Petropars would develop part of a giant gas field in the Persian Gulf known as South Pars, a press official at Iran's oil ministry said.

It wasn't clear how much of the $6 billion investment would come from Total, or how the deal would be structured for Total to steer clear of U.S. restrictions still in effect.

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The deal is a draft that still must be completed over the next six months, the Iranian oil-ministry official said, but it gives Total and CNPC a head start over competitors. Total and CNPC both signed deals years ago to develop the South Pars project before sanctions forced them to pull out in 2009 and 2012, respectively.

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iehi-feed-60969 Fri, 28 Oct 2016 16:20:15 GMT Woe in the oilfield: 213 companies have now declared bankruptcy http://implode-explode.com/viewnews/2016-10-28_Woeintheoilfield213companieshavenowdeclaredbankruptcy.html iehi-feed-60948 Tue, 25 Oct 2016 18:14:33 GMT Faber on why commodity prices will rise, oil to hit $70 soon http://implode-explode.com/viewnews/2016-10-25_Faberonwhycommoditypriceswillriseoiltohit70soon.html iehi-feed-60909 Tue, 18 Oct 2016 21:32:53 GMT Duterte Visit to China; Failed "Pivot"? http://implode-explode.com/viewnews/2016-10-18_DuterteVisittoChinaFailedPivot.html Philippine President Rodrigo Duterte arrived in China to meet with Chinese Premier Xi Xinping. Duterte has become a very controversial figure in Asian politics as he has publicly excoriated U.S. President Barack Obama's treatment of him and his country.

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His meeting with Xinping comes after multiple public clashes with Obama which has led to ending joint sea patrols with the U.S. Seventh Fleet in the disputed South China Sea.

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iehi-feed-60900 Mon, 17 Oct 2016 19:42:17 GMT Corruption in China is Structural; Will The Country Buckle Under It Before Reforming? http://implode-explode.com/viewnews/2016-10-17_CorruptioninChinaisStructuralWillTheCountryBuckleUnderItBeforeRe.html IN 1989 the movement for democracy brought the Chinese Communist Party to within days of extinction. According to official reports, on one day alone, May 22nd, 6m people joined demonstrations in 132 cities across the country. The party's immediate response was to use the people's army to crush the people by force, in Tiananmen Square. To rebuild the loyalty of those who would continue to rule in the party's name, its leaders went on to create the conditions in which officials at all levels could loot state property. Thus, the biggest democracy movement in history was countered by the greatest opportunity for predation the world has ever seen.

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Mr Pei's book is quietly devastating. In sober, restrained language, he exposes the full gravity of corruption in China. Presenting a wealth of evidence, he shows that this is not the unfortunate by-product of rapid economic growth but the result of strategic choices by the party. With clinical precision, Mr Pei explains how corruption operates at every level, perverting each branch of the party-state and subverting the political authority of the regime. The party cannot mitigate, let alone eradicate, "crony capitalism" because, since 1989, it has been "the very foundations of the regime's monopoly of power", the author argues. The conclusion, he believes, is that far from saving the regime, President Xi Jinping's anti-corruption drive may accelerate its demise by creating divisions within the ruling elite even as it reinforces strong popular resentment of corruption.

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Corruption in China has been made easy by ill-defined property rights, decentralised administrative authority and the absence of democratic checks and balances, such as an independent judiciary, a free press and political competition. Only by improving all of these can it be permanently reduced. Belatedly, the party under Mr Xi has recognised that corruption poses a mortal threat to the regime, but it has, at the same time, rejected the very reforms that offer the only prospect of a remedy.

Mr Pei grew up in Shanghai and lived there in the hopeful early 1980s, but he is not optimistic now: "Even a revolutionary overthrow of the old order may not usher in the dawn of a liberal democracy. The legacies of crony capitalism...will enable those who have acquired enormous illicit wealth under the old regime to wield outsized political influence in a struggling new democracy that will have poor odds of survival," he writes.

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iehi-feed-60894 Sun, 16 Oct 2016 18:20:57 GMT Goldman Sachs Wins Suit Over $1.2 Billion Libyan Fund Losses http://implode-explode.com/viewnews/2016-10-16_GoldmanSachsWinsSuitOver12BillionLibyanFundLosses.html Goldman Sachs Group Inc. didn't dupe Libyan officials into investments that lost $1.2 billion, a London court ruled, putting to rest claims the bank leveraged its reputation as well as lavish meals and prostitutes to win the sovereign wealth fund's trust.

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The Libyan Investment Authority, a $60 billion oil wealth fund set up under former dictator Moammar Qaddafi, sued Goldman Sachs saying it was misled into signing derivative deals it never properly understood. The trades ended up being virtually worthless after the company shares they were linked to fell in the 2008 crisis.

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iehi-feed-60882 Fri, 14 Oct 2016 14:40:38 GMT Saudi Arabia, SoftBank plan $100 billion tech fund - one of the world's biggest http://implode-explode.com/viewnews/2016-10-14_SaudiArabiaSoftBankplan100billiontechfundoneoftheworldsbiggest.html Saudi Arabia and Japan's SoftBank Group said they will create a technology investment fund that could grow as large as $100 billion, aiming to create one of the world's largest private equity funds.

The plan is part of a series of dramatic business initiatives launched by Riyadh this year as Saudi Arabia, its economy hurt by low oil prices, deploys huge financial reserves in an effort to move into non-oil industries.

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The Public Investment Fund (PIF), Saudi Arabia's top sovereign wealth fund, is set to be the lead investment partner and may invest up to $45 billion over the next five years while SoftBank expects to invest at least $25 billion, the Japanese company said in a statement.

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[Crown Prince Salman] has said he aims to expand the PIF, founded in 1971 to finance development projects in the kingdom and until this year little known abroad, from $160 billion to about $2 trillion, making it the world's largest sovereign fund.

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iehi-feed-60857 Tue, 11 Oct 2016 16:06:11 GMT Gold Realizes The Sad Truth...The Fed Screwed Up http://implode-explode.com/viewnews/2016-10-11_GoldRealizesTheSadTruthTheFedScrewedUp.html iehi-feed-60856 Mon, 10 Oct 2016 22:44:01 GMT Warming Relations in Person, Putin and Erdogan Revive Pipeline Deal http://implode-explode.com/viewnews/2016-10-10_WarmingRelationsinPersonPutinandErdoganRevivePipelineDeal.html Both Mr. Erdogan and Mr. Putin have said they want to restore robust trade ties, although some differences remain. In particular, Turkey wants Russia to lift an import ban on almost all Turkish agricultural produce that was imposed after the jet was shot down. During the gas-pipeline signing ceremony in Istanbul on Monday, Mr. Putin said ministers and experts would continue to hold bilateral talks on economic and political issues, tourism and culture.

The Turkish Stream gas pipeline is intended to replace a planned pipeline through Bulgaria that the European Union blocked at the outset of the Ukraine crisis. Some European governments and the United States also oppose the Turkish Stream project.

The revived agreement to build the pipeline also includes a common geopolitical sweetener from Russia: a reduction in the price that Gazprom, the Russian natural gas giant, would charge for natural gas sold on Turkey's domestic market.

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Mr. Erdogan told reporters at a joint news conference on Monday that the two presidents had discussed Turkey's military operations in Syria and possible cooperation to clear Islamic State fighters from the border.

"Regarding Aleppo, we discussed strategies that could be applied on humanitarian aid, so that the inhabitants who are in a dire situation there can quickly attain peace and calm," Mr. Erdogan said.

Mr. Putin said that "both Russia and Turkey stand for the earliest cessation of bloodshed in Syria," and added that "the switch to a political settlement must happen as soon as possible."

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Despite their newly cordial relations, both Turkey and Russia continue to back opposite sides in the civil war. Russia has used its air force to buttress the rule of President Bashar al-Assad of Syria. Turkey has backed the rebels, within certain limits; it does not want to see Kurdish power expand across Syria's fragmented north.

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iehi-feed-60797 Mon, 03 Oct 2016 16:21:49 GMT Kuroda Ruined Chance of Second Term, Abe Aide Says http://implode-explode.com/viewnews/2016-10-03_KurodaRuinedChanceofSecondTermAbeAideSays.html "The central bank's switch to yield-curve targeting compounds its earlier error of adopting negative interest rates and is a disappointing move away from monetary-base expansion, Nakahara, 81, said in an interview on Sept. 30. In a stinging attack on the BOJ's recent actions, he said the decision to conduct a comprehensive review of monetary policy had invited defeat on reflationist efforts and would raise questions about Abenomics as a whole.

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"They should end negative rates, but they took action to save face and offset the failure of negative rates," Nakahara said. "Bringing the rate up to zero means tightening, causing the yen to rise. The current framework is very vulnerable to external factors."

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iehi-feed-60794 Sun, 02 Oct 2016 18:15:28 GMT Mainstream Gold Analysis is Fundamentally Wrong -- Here's Why http://implode-explode.com/viewnews/2016-10-02_MainstreamGoldAnalysisisFundamentallyWrongHeresWhy.html Market participants often describe the supply and demand outlook for gold as they would for oil or grains, or flow commodities. And with their marginal demand framework, it may appear that a fall in near-term demand for this `speculative commodity' presents a limitless floor to prices. Or as one trader put it, "gold has a big door in and little door out when fearful investors and gold bugs are the primary demand for this speculative asset [a `useless commodity' without income or yield], and there is always infinite ETF supply to be dumped onto markets when demand turns and the market goes `no bid'"...

We believe this consensus analytical framework is wrong and largely irrelevant and can be falsified by both data and logic. Instead, it is our view that the approximately $8 trillion dollars-worth of global gold inventory is actually being valued and demanded by its holders as an alternative yet permanent money stock with potential advantages to fiat currency-based savings depending on the outlook for real yields in one's base saving currency. Gold is simply a liquid real-asset with no time decay, no real cost of carry and no counter-party risk, yet it is scarce, has great elemental utility and an energy-intensive replacement cost.

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iehi-feed-60770 Thu, 29 Sep 2016 02:40:53 GMT In U-Turn Shocker, Saudis Choose Higher Prices Over Free Oil Markets http://implode-explode.com/viewnews/2016-09-28_InUTurnShockerSaudisChooseHigherPricesOverFreeOilMarkets.html ``The decision at this week's meeting of the Organization of Petroleum Exporting Countries in Algiers to cut production was necessitated by Saudi Arabia's tattered finances. The kingdom has the highest budget deficit among the world's 20 biggest economies, it's enduring a delay in its first international bond issue and now faces fresh legal uncertainty as the U.S. Congress voted Wednesday to allow Americans to sue the country for its involvement in 9/11.''

Inquiring minds wonder if this abrupt about-face is actually in direct response to/retaliation for the 9/11 liability legislation. Those who predicted that the legislation might herald the death of the petrodollar certainly have a giant factual point in their favor already, after a mere few hours.

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iehi-feed-60749 Tue, 27 Sep 2016 03:15:42 GMT Fact-Checking the First Presidential Debate http://implode-explode.com/viewnews/2016-09-26_FactCheckingtheFirstPresidentialDebate.html iehi-feed-60724 Fri, 23 Sep 2016 15:13:46 GMT Saudis Said to Have Offered to Cut Oil Output; No Deal Reached http://implode-explode.com/viewnews/2016-09-23_SaudisSaidtoHaveOfferedtoCutOilOutputNoDealReached.html Saudi Arabia, the world's largest oil exporter, told Iran it would be willing to reduce its output -- which is close to a record 10.7 million barrels a day -- if its regional rival were to cap production at 3.6 million, according to two people familiar with the matter, who asked not to be identified because the talks were private. Other proposals were also discussed by oil officials from the countries at the headquarters of the Organization of Petroleum Exporting Countries in two-day talks that ended Thursday without a deal, one of the people said.

Oil-producer meetings from Vienna and Paris to Moscow have attempted to reach a consensus before talks in the Algerian capital next week.

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iehi-feed-60704 Tue, 20 Sep 2016 13:54:01 GMT Slowly, Then All at Once - Kunstler http://implode-explode.com/viewnews/2016-09-20_SlowlyThenAllatOnceKunstler.html iehi-feed-60701 Mon, 19 Sep 2016 20:50:57 GMT Oil Investors Flee as OPEC Freeze Hopes Face Supply Reality http://implode-explode.com/viewnews/2016-09-19_OilInvestorsFleeasOPECFreezeHopesFaceSupplyReality.html