Here's to the new year, may it be better than the last one.
I'm doing okay, I hope you are all okay or much better than okay. :)
Iran, Saudi Arabia, OPEC, Oil
This business of Saudi Arabia beheading people is the quiet problem nobody's willing to talk about. Thinking back to Gulf War I, the western media has always played reports on Saudi Arabia with a favourable view, by and large because they were most supportive of Bush Snr.'s Gulf War. They cemented that media handle by being all-in behind GWB's Iraq War, and beating up on Saddam. With Saddam gone, and the West largely withdrawing from the colonial project, Saudi Arabia is now at loggerheads with Iran because, well, religion and race are different.
And so it's now a Sunni versus Shi'ite spat with Saudi Arabia executing a Shi'ite cleric and of course Iran being the land of religious fundamentalist rule, they're not taking this lightly. Brent crude has gone up 6.5%.
CMC Markets chief market analyst Ric Spooner said the price rise was directly linked to the political unrest.
"News that Saudi Arabia has cut diplomatic relations with Iran has led to short covering in early trading on the oil market as traders build risk premium into prices," said Mr Spooner.
"While there is no immediate threat to production implied by this situation, political unrest that directly impacts major OPEC producers is unsettling.I guess it's a case of it-never-rains-it-pours. OPEC is as good as dead if nobody is sticking to the cartel's own supply plans. Saudi Arabia is trying to max out on market share through over-production which is surprising because if the peak oil advocates are to be believed, they're bringing about their own doom much sooner. One would think temperance would dictate they cut supplies to maintain prices.
"Oil markets will be concerned that this could be an incremental step in a deteriorating political situation that might ultimately threaten world oil supply."
Of course, Saudi Arabia being the strange place that it is, it is also fighting a waring Yemen and lots of the ruling elite are tacitly handing out money to ISIL (who are ostensibly Sunni crazies) ; ISIL is flooding the market with their cheap oil which they pump through Turkey, and Russia's trying to earn as much foreign currency as well as it struggles under sanctions so they're not exactly going to cut their oil production either. If peak oil is even remotely a true-ish concept, the rate at which we're pumping out crude oil beggars belief.
Turnbull's Frontbencher Woes
It's amazing how fragile the balance of agreements that places MPs as ministers on the frontbench. It might not even be their own good talent or character at all - it might just be that they're the right factional member with the right amount of seniority. It's hard to imagine why Mal Brough had to be brought back to Parliament after 2007's election wiped him out. The cloak and dagger conniptions involving Peter Slipper and his underling revel him to be a man of not-so-great character, but of course with the Abbott-Disposal and the rise of Malcolm Turnbull, he had to be a frontbencher.
Jamie Briggs is weirder. I've never even heard of this 37 year old idiot until he misbehaved and got himself into a world trouble. For the life of me I can't figure what exactly this man has done to be so deserving to be a frontbencher, but there he was until he fucked up.
Today, the news is turning into a discussion about Peter Dutton and his abusive text sent to a journalist. These people are proving to be far less professional than the local community theatre group.
I don't exactly have a lot of faith in the current crop of ALP frontbenchers after watching that Sarah Ferguson doco that dissected them, but this business shows just how lacking the Liberal Party is when it comes to proper, professional talent. Career politicians are going to ruin this country.
If It's So Good, Why's Everybody So Keen To Leave?
it's a genuine question. The Middle Flower Kingdom likes to beat its chest about all kinds things but somehow everybody seems to want to leave. They want to send their money overseas and get out. So despite being the world's second largest economy, they have to exert capital controls like Malaysia in the 1990s during the Asian Financial Crisis.
The latest move comes just three months after the People's Bank of China (PBOC) ordered banks to scrutinise clients' foreign exchange transactions to prevent illicit cross-border currency arbitrage between the offshore and onshore yuan.
On Wednesday, the country's foreign exchange regulator also said it would improve its reserve position and contingency plans to curb risks from abnormal cross-border capital flows.
"The main purpose is to crack down on excessive currency speculation and arbitrage, which may hurt the economy," said a senior economist at a think-tank linked to China's Cabinet.
"They are worried about falling FX reserves. The yuan faces obvious depreciation pressure as the Fed (U.S. Federal Reserve) may continue to raise interest rates, so policymakers are concerned and intend to take effective measures to respond."
A source at one of the affected banks said China's central bank asked them to disclose the names of their foreign exchange clients buying spot and instructed any state-owned enterprises among them to stop trading.
"The PBOC is robbing us. They're not being reasonable; even if we comply with everything, we provide all the documents, our spot volume is too large," the person said.
That's a great way to start the year. China's deep in the process of dealing with the end of its own financial bubble. It's not going to pull off any kind of soft landing.
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