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Energy & Commodities

The Low Oil Price Guts Another OPEC Oil Exporter


Posted by Steve St. Angelo - SRSrocco Report

on Thursday, 21 September 2017 07:09

The low oil price is negatively impacting another OPEC oil exporter as it continues to liquidate its foreign exchange reserves.  Algeria, like Saudi Arabia, has seen its international reserves plummet by more than 40% as the oil price fell in half since 2014.

Algeria joined OPEC back in 1969 and is currently producing 1.1 million barrels of oil per day (mbd).  While Algeria is not one of the larger OPEC members, it still exports roughly 670,000 barrels of oil per day.  At $50 a barrel, the country receives $33.5 million a day in oil revenues.  However, Algeria’s oil revenues have taken a nose-dive as the oil price declined from over $100 in 2014 to below $50 currently:

Algeria-Net-Oil-Export-Revenues-2005-2016

As we can see in the chart above, Algeria’s net oil export revenues fell from $61 billion in 2012 to $19 billion last year.  Thus, Algeria’s net oil export revenues fell nearly 70% in the past four years.  This has negatively impacted the country’s financial balance sheet.  To make up for declining oil revenues, Algeria has liquidated $70 billion of its international reserves since the end of 2014:



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Timing & trends

John Embry – The Charade Is About To End And The Implications For The Public Are Horrifying


Posted by King World News

on Thursday, 21 September 2017 06:43

KWN-Zappa-864x400 cAs the world digests the propaganda released from the Federal Reserve about their preposterous plan to reduce their balance sheet, today John Embry told King World News:

 “Eric, at this point the manipulation of all markets has become so blatant and the lying about the economy so intense that one has to wonder what is really going on behind the curtain…

....continue reading HERE

....also from King World News:

DANGER: This Major Warning Indicator Just Hit An All-Time Record, But This Is Truly Shocking!



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Real Estate

Home Prices Soar in Disaster-Prone Areas


Posted by Robert Zurrer

on Thursday, 21 September 2017 06:13

c40035aa-a8bd-4d4f-b03b-0d1426176e88It’s been a bad few weeks for natural disasters.  A series of hurricanes ripped through Texas, Florida, and the Caribbean, killing hundreds and racking up hundreds of billions of dollars in damage. Wildfires are raging in the Western U.S., and a pair of powerful earthquakes have battered Mexico.

Amid the terrifying recent events is a worrisome finding from a new report: The parts of the U.S. most at risk of natural disasters are also the places where property values are highest and increasing most quickly.

 ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, today released its 2017 U.S. Natural Hazard Housing Risk Index, which found that median home prices in U.S. cities in the 80th percentile for natural hazard risk (top 20 percent with highest risk) have increased more than twice as fast over the past five years and over the past 10 years than median home prices in U.S cities in the 20th percentile for natural hazard risk (bottom 20 percent with lowest risk).

....continue reading HERE (be sure to view the 2017 Natural Hazard Housing Risk Heat Map) 



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Bonds & Interest Rates

Get Ready for an Interesting October Folks - Peter Schiff, Bill Gross, BlackRock


Posted by Peter Schiff - Bill Gross - BlackRock

on Thursday, 21 September 2017 05:58

5d98e9a2-4f80-11e7-9d92-41080ba20685 600x400The Federal Reserve Is Now Ready to Blow It All Up

Peter Schiff, CEO of Euro Pacific Capital, said that it's "impossible" for the Fed to unwind its balance sheet. In turn, he forecasts a recession in the not too distant future. While that may be extreme, Schiff touches on a key point the feel-good-investor must now consider: we have never seen a Federal Reserve try to unwind a balance sheet of this size before, no less against the backdrop of robo-trading and real-time news. Get ready for an interesting October, folks. 

continue reading HERE

Here's what BlackRock says will happen to interest rates when Fed slims down its balance sheet

 

  • The Fed is expected to begin unwinding its giant $4.5 trillion portfolio, and it should not immediately have much impact on interest rates, according to BlackRock's global chief investment officer of fixed income.
  • Rick Rieder says the 10-year yield could get to 2.50 percent this year, but will rise more next year as the Fed increases the amount that it is shrinking its portfolio by to $50 billion a month.
  • BlackRock also sees huge demand for Treasurys, and that should keep U.S. yields low.

 

.....continue reading HERE

Bill Gross: "If they followed their plan … which basically projects over the next two years for fed funds to reach 2.8 [percent] or even 3 percent, a 170 basis point increase, then yes a recession is possible,"

 

  • Whether or not the Fed leads the U.S. economy into recession depends on whether it sticks to its fed funds forecast, Bill Gross told CNBC.
  • On Wednesday, the Fed reduced its long-run target for the fed funds rate to 2.8 percent.

 

"They just have to be very careful because it's a highly levered U.S. economy. It's a highly levered global economy and currencies and the dollar and other related assets like gold will move substantially if the Fed overstates its case," Gross said Wednesday.

 

 

 

 

 

 

 



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Wealth Building Strategies

Contrarian Investing: Make Money the Smart Way


Posted by Richa Argwal

on Thursday, 21 September 2017 05:54

 

  • shutterstock 162221975-1024x819-2The best thing that happens to us is when a great company gets into temporary trouble... We want to buy them when they're on the operating table. - Warren Buffett

 

A quick history lesson...

In 1963, the world's largest credit card company, American Express, was involved in the 'salad oil scandal'.

AmEx had just created a warehousing division to make loans to businesses using inventory as collateral.

A commodities trader (and known swindler) named Anthony 'Tino' De Angelis saw an opening for a massive fraud.

He began stockpiling his warehouses with tanks of soybean oil. He then used warehouse certificates from American Express as collateral to borrow heavily from American Express and as many as fifty other lenders.

When American Express sent inspectors to check De Angelis' inventory, they did not notice that - except for the thin layer of oil floating on top - the tanks were filled with water.

When the fraud was finally exposed, AmEx stock crashed more than 40%. The eventual damage to the company would be US$175 million.



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