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Weekend Reading: Harvey & The Broken Window Fallacy

Authored by Lance Roberts via,
As the waters recede from “Hurricane Harvey,” the rebuilding efforts begin. It will take quite some time before Houston fully recovers from the tragedy, but recover we will. Hopefully,...

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Harvey Upends Global Oil And Product Flows

- Harvey dominated trading this week with downside blowouts in WTI time spreads and WTI/Brent arbs while product spreads and crack margins spiked to multi year highs. Consensus estimates saw 4.0-4.4m bpd of refiner capacity taken offline while oil production outages totaled less than 1 million bpd. - Refinery outages in PADD III have upended global trading flows leading to a surge in clean product shipments from Europe and Asia toward the US while more than 29 million bbls of crude idled in the USGC due to the port closure. The Houston > east…

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Firefighters Scramble After Smoke Pours From Russian Consulate Chimney In San Francisco

With evicted Russian diplomats scrambling to collect their baggage and vacate the San Francisco consulate in hours ahead of the September 2 deadline, the AP reports that "acrid, black smoke" was seen pouring from a chimney at the Russian consulate on Friday.

However, instead of sabotage, it appears the Russians were engaged in some last minute creative document "redaction."

Firefighters who arrived at the scene were turned away by consulate officials who emerged from inside the building. An Associated Press reporter heard people who came from inside the building tell firefighters that there was no problem and that consulate staff were burning "unidentified items in a fireplace."

Mindy Talamadge, a spokeswoman from the San Francisco Fire Department, said the department received a call about the smoke and sent a crew to investigate but determined the smoke was coming from the chimney.

They had a fire going in their fireplace,” she said. Since it is about 100 degrees in San Francisco today, the fire was hardly stoked for heating purposes.

Talmadge said she did not know what they were burning on a day when normally cool San Francisco temperatures had already climbed to 95 degrees by noon. "It was not unintentional. They were burning something in their fireplace,” she said.

As reported yesterday, the consulate’s workers are rushing to shut Russia’s oldest consulate in the U.S. Thursday's order for Russia to vacate the consulate and an official diplomatic residence in San Francisco — home to a longstanding community of Russian emigres and technology workers — escalated an already tense diplomatic standoff between Washington and Moscow. The deadline for the consulate to close is Saturday.

It remains to be determined if the NYT or the WaPo will report some time around 7pm on Friday, citing unnamed NSA/CIA/Deep State sources, that among the items burned were Donald Trump's official KGB recruiting papers, videotapes of the president enjoying golden showers from Russian hookers and, of course, a first lien on the US granted to Vladimir Putin.

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Plans for Arafat ascent are hailed a success

Sat, 2017-09-02 03:00

JEDDAH: Plans for nearly two million pilgrims to ascend Mount Arafat and its surroundings, stay the night in Muzdalifa and return to Mina valley to spend the post-Hajj days were declared a success on Friday.
The security spokesman for the Interior Ministry, Maj. Gen. Mansour Al-Turki, said the throwing of stones in Mina valley and the walk round the Kaaba remained for most of the pilgrims before they left Makkah.
Hatem bin Hasan Gadhi, adviser to the minister of Hajj and Umrah, said more than 750,000 pilgrims ascended from Mina to Arafat and back to Mina through Muzdalifa using traditional transport and about 350,000 used the train.
He said more than 1.9 million had so far successfully finished the stone-throwing ritual and headed to the Grand Mosque in Makkah for the main circumambulation, before coming back to Mina for two to three days, the tashreeq period.
Gadhi said the plan required that pilgrims to stay in their camps on the second day of tashreeq from 10:30 a.m. to 2 p.m. to reduce the traffic on roads leading to Jamrat bridge.
He advised pilgrims not to carry their personal effects while practicing the stone-throwing ritual.
Gadhi said representatives of more than 80 foreign and domestic Hajj missions took part in the workshops held by the authorities to advise pilgrims on the culture of pilgrimage.
Updating Hajj security information, security spokesman Col. Sami Al-Shwairekh, said the number of unlicensed Hajj offices now amounted to 121, unlicensed pilgrims who were ordered back numbered 575,227, there were 251,372 vehicles forced to make U-turns, and 17,362 illegals who will be prosecuted later after their fingerprints were taken.
Civil Defense spokesman Col. Abdullah Al-Harthi highlighted the preventive role of Civil Defense, resulting in a major accident-free Hajj so far.
Civil Defense had successfully carried out trials of their response to major incidents such as floods and fire, he said. They also controlled the holy sites’ train shuttles.
Al-Harthi said 95 percent of Arafat tents this year had been converted to be fireproof.
He said three kinds of tunnels linked the holy sites of Mina, Arafat and Muzdalifa with downtown Makkah: some for pedestrians, others for vehicles and a third for water drainage, including potential floods caused by heavy rain.

Main category: 
Muslim pilgrims mark final Hajj rite with ‘Stoning of Devil’
Hajj pilgrims return to Mina for ‘stoning of Satan’ ritual
King Salman to cover cost of sacrificial animals for 5,000 pilgrims on Hajj program

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Eyes in the sky help to keep Hajj pilgrims safe

Sat, 2017-09-02 03:00

JEDDAH: Arab News took to the skies with the Royal Saudi Air Force on Friday for a bird’s-eye view of pilgrims and the measures in place for their safety and security.
The 90-minute flight took place in one of the Air Force’s VTOL (vertical take-off and landing) jets piloted by Maj. Majed Salem Al-Ghamidi.
The Air Force has two tasks during Hajj, Al-Ghamidi said. The first is assisting Hajj Security Forces in carrying out the security plan designed for the comfort of pilgrims, and the second is close observation of the holy sites from the air.
Our flight on Friday began at 11 a.m. and we flew over Mina, Jamarat Bridge and Makkah, including the Masjid Al-Haram and the roads leading to it. We noted a smooth flow of pilgrims on all routes, even on Jamarat Bridge and in train stations, and only limited traffic at the bus stations.
Air Force Lt. Gen. Abduallah bin Mohammed Al-Zahrani, leader of the VTOL jet squadron participating in Hajj 2017, said the Air Force played a major role in monitoring the safety of pilgrims and working with other agencies in helping them. These included the Ministry of Interior represented by Hajj Security Forces, the Ministry of Hajj and Ministry of Municipal and Rural Affairs, who are supervising project development at the holy sites, along with the Saudi Red Crescent Authority (SRCA), the Ministry of Health and guests of the Ministry of Information.
Al-Zahrani said all the participating aircraft were taking off vertically, and pilots were working around the clock.

Main category: 
Sign language most common language among Hajj pilgrims 
Pilgrims throng Mount Arafat for peak of Hajj
Millions gather in Arafat for Hajj climax

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Honest Hajj pilgrim returns bag with cash and jewelry

Sat, 2017-09-02 03:00

JEDDAH: A pilgrim who found a bag containing cash and jewelry has been praised for his honesty after he handed it over to authorities.
Lutfi Mohammed Abdulkarim, from Egypt, was looking for pebbles to perform the rami Al-Jamrat ritual in Mina when he found the unattended bag. He asked around, but could not find the owner.
Inside the bag, as well as the valuables, Abdulkarim found an ID card suggesting it belonged to a Nigerian woman. He handed the bag over to officials from King Salman’s Hajj and Umrah Program, of which he is a guest.
Ahmed Jailan, a member of the program’s Sharia committee, said: “The pilgrim is with us in the program after one of his sons, a police officer, was killed in his country. He is of high moral standards and a good example of the guests of the program.”
The bag and its contents will be returned to their owner, Jailan said. “This emphasizes the meaning of solidarity and cooperation.”
He said he hoped all pilgrims would follow such a good example.
Meanwhile, Palestinian pilgrim Abdullah Mohammed Sharaka’s grief at losing his 14-year-old son was replaced by pleasure and joy when he and his wife arrived in Makkah as guests of King Salman’s Hajj and Umrah Program.
Sharaka said King Salman’s generosity had healed the wounds of many Palestinians who had been living in bitterness after losing children, brothers, fathers or mothers. His son, Ahmed, was shot dead by Israeli soldiers for throwing stones.
Sharaka said he could not express his pleasure when he was selected for the Hajj and Umrah Program. He found it hard to believe as he was walking in the districts of Makkah and the holy sites.
He said he would pray for King Salman, asking Allah to keep him and bestow security on the Kingdom of Saudi Arabia.

Main category: 
Humanity in the heart of Saudi holy sites during Hajj
Smartphones, social media transforming image of Hajj
Hajj pilgrims return to Mina for ‘stoning of Satan’ ritual

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Floods, Nukes, & Pitiful Payrolls Spark Best Week For Stocks In 2017

Flood Schmud, Missiles Schmissiles, Jobs Schmobs...


Gold gained the most after today's dismal jobs data...


After a crazy run the last few days into month-end, Nasdaq slipped notably lower after the pitiful payrolls print... All major indices closed lower post payrolls


Stocks gained on the day though, thanks to overnight pumping, with Trannies tumbling into the close to leave small caps best on the day. Nasdaq record high close...


And despite Hurricane Harvey, North Korean Missiles, and Dismal Jobs, stocks soared on the week...

A crazy week:

  • Nasdaq +2.75% - best week since Dec 2016
  • S&P +1.5% - best week in 4 months
  • Trannies +2.8% - best week in 3 months
  • Gold +2.6% - best week since April 2016

FANGs and Biotechs led Nasdaq...


VIX was down for the 3rd week in a row...VIX was crushed back to a 10 handle.


Treasury yields were up across the board today.. on weak jobs data? but ended the week mixed (30Y higher in yield, belly lower)...

NOTE - the yield curve (2s10s) was flatter for the 5th week in a row.

But it was the shortest-end of the curve that was most troubled as the debt ceiling panic really started to build...


FX markets were a little wild today as Payrolls and ECB jawboning sent EURUSD swinging wildly...


The Dollar Index rose on the week (best week in the last 4)


Yuan was the strongest against the greenback on the week and JPY weakest...


Bitcoin surged over 12% this week (up7 weeks in a row) to a new record high...


But Bitcoin Inv Trust tumbled 21% following Andrew Left's appearance on CNBC...


WTI sank on the week (fifth weekly drop in a row)... RBOB gasoline futures spiked over 14% on the week (roll-adjusted) - the biggest week since Hurricane Irene in July 2011...


Having survived a flash crash effort Wednesday night, precious metals surged back to close the week on their highs...


And equity investors have another excuse to BTFD - equity dividend yields are higher than bond yields once again...


But Gold remains 2017's big winner...

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Russia accuses US of ‘direct threat’ to diplomats’ immunity

Fri, 2017-09-01 22:35

MOSCOW: Russia’s foreign ministry on Friday accused the US authorities of threatening the “security” of Russian citizens and violating its diplomats’ immunity with a planned FBI search of the San Francisco consulate.
“The demands of the US authorities create a direct threat to the security of Russian citizens,” foreign ministry spokeswoman Maria Zakharova said in a statement.
“American special services intend on September 2 to carry out a search of the consulate in San Francisco including of the apartments of employees who live in the building and have immunity.”
The United States on Thursday ordered Russia to close its consulate in San Francisco as well as two annexes in Washington and New York, in a tit-for-tat response to Moscow’s forced reduction of US diplomatic staff in their country.
The State Department said the decision was made “in the spirit of parity,” adding that the closures needed to be completed by Saturday.
Zakharova said that the FBI had ordered diplomats to leave their accommodation for 10 to 12 hours with their families including young children and babies.
“We are talking about invasion into a consulate and the accommodation of diplomatic staff, what’s more they are being chucked out so that they don’t get in the way of the FBI agents,” Zakharova said.
“We express a resolute protest over Washington’s actions that ignore international law, and as is customary in diplomatic practice, we reserve the right to take retaliatory measures. That’s not our choice. They are forcing us into it,” Zakharova said.
Earlier Friday presidential aide Yury Ushakov was quoted by TASS news agency as describing the latest US measures as “a kind of illegal takeover.”
“We will think how to respond,” he added.
The latest US move came as a September 1 deadline was reached for Washington to comply with a Kremlin demand to slash staff numbers at its Russian diplomatic mission by 755 personnel.
The fresh diplomatic spat is the latest twist in tortured ties between the US and Russia, which have slumped to their lowest point since the Cold War following the Kremlin’s seizure of Crimea from Ukraine in 2014.

Main category: 

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Petition To Label George Soros A “Domestic Terrorist” Has 80,000 Signatures

In less than two weeks, a petition demanding that billionaire investor George Soros be declared a “domestic terrorist,” and that authorities seize his multibillion-dollar fortune, has garnered nearly enough signatures to force the Trump administration to issue a formal response.

The petition, which has attracted 80,000 signatures so far - just 20,000 shy of the 100,000-signature threshold where a response would be required – accuses Soros of being guilty of sedition by financing groups that help support violent Antifa counter-protesters and other dangerous leftist groups.

Last week, we reported that a similar petition, this one asking that President Donald Trump declare Antifa to be a terrorist group, had reached the threshold. The petition is still awaiting a formal response, but in one promising development, Politico reported today that the Department of Homeland Security had described the group’s actions as “domestic terrorist violence” in private memos.

Over the past week, the mainstream media narrative has turned decidedly against Antifa, with the Washington Post, Bloomberg and the Atlantic publishing stories criticizing the group’s violent tactics.

Specifically, the Soros petition accuses the Hungarian-born billionaire of using the “Alinsky model” of terrorist tactics to destabilize the US social order. Saul Alinsky was a Chicago-based community organizer who wrote the infamous “Rules for Radicals," a book meant to be a guide to aid leftists in the violent overthrow of the US government.

Here’s the petition’s full text:

“Whereas George Soros has willfully and on an ongoing basis attempted to destabilize and otherwise commit acts of sedition against the United States and its citizens, has created and funded dozens (and probably hundreds) of discrete organizations whose sole purpose is to apply Alinsky model terrorist tactics to facilitate the collapse of the systems and Constitutional government of the United State, and has developed unhealthy and undue influence over the entire Democrat Party and a large portion of the US Federal government, the DOJ should immediately declare George Soros and all of his organizations and staff members to be domestic terrorists, and have all of his personal an organizational wealth and assets seized under Civil Asset Forfeiture law.”

Soros, as Russia Today explains, has funded organizations and projects that have been criticized for their radical tactics. His Open Society Foundation, along with USAID and the National Endowment for Democracy, have been accused of fomenting revolutions to install US-friendly governments from Serbia, in 2000, to Ukraine, in 2014.

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Trump To Announce “Dreamer” Decision On Tuesday

After telling the press earlier on Friday that he would make his decission on whether to end the Obama-era Deferred Action for Childhood Arrivals (DACA), or "Dreamer" program this weekend, or Monday at the latest, moments ago the White House announced that the decision would be revealed on Tuesday instead. 

"We are in the process of finalizing that decision and those details, and we are actually going to make that announcement on Tuesday of next week," the White House press secretary said on Friday afternoon. "The president’s priorities on immigration are to create a system that encourages legal immigration and benefits our economy and American workers. The president has been very clear, he loves people and he wants to make sure this decision is done correctly."

As discussed yesterday, the White House has been grappling with the future of the Obama-era program that extends temporary deportation relief to certain undocumented immigrants who applied for work permits with the federal government.  Having promised during his presidential campaign to take a hard line on illegal immigration, so far the president has failed to move against the program, fearing a popular backlash.

A Fox News report on Thursday stated that Trump would announce the program's end but would allow so-called “dreamers” currently in the program to stay in the U.S. until their work permits expire – which, for some, could be as long as two years. The White House promptly denied the Fox report.

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