It’s a tale of upstream and downstream !


Even those affected with attention disorder noticed that oil price where low last year. The precious liquid was priced around 100$, it felt under 50 during the year 2015. A sharp decline that produced a very wide range of effects. Reduced energy prices gave consumming economies a small boost in growth by the virtue of smaller trade deficits. Producers, on the other hand suffered greatly. Russian Ruble halved in value, Venezuela in on the rope, Saudi Arabia is begging on world financials markets.

Oil Majors published reduced earning, BP is even in the red for the second year in a raw. It’s sound absolutly logical so far. But there’s is something strange. If you read financials statements of those industrials giants there is one thing you should notice. Downstream (mainly raffinage) is going fine indeed, bordering on booming to be clear.

Total the french giant proudly report a doubling of it’s net income coming from downstream (1).

Exxon the mother of all oil companies is on a similar path, earnings coming from the downstream is also tripling (2).

Shell could do no less, so without any surprise it’s 2015 report show a tripling of net earnings coming from from the downstream opérations (3).

Meanwhile Valero the american refining giant is showing a very small progress on what is it’s main business. The refining income coming from the refining operations trend higher by somthing like 20%, from 5884 millions dollars to 6973, that’s good but not stellar (4).

So we can only say that that where is a shadow boom for downstream business of oil majors wich is working only for them. That is a very interesting situation wich is almost impossible to explain rationnaly as almost every western market is in over capacity as consumption is slowly decreasing year after year including in the USA. One way to go is to think that they can play with market prices in order to regain in the downstream a share of what they lost in the upstream.
The link we are putting below should is perhaps a key to understand how they did it.

Country are in blue; company in pink, each link show an interest in raffinage from a company down to a country.


Publicités comparatives : la banque s’enlise

Com' by Me

Francis Blanche_les tontons flingueurs_2 solutions.jpg
(“Y’a deux solutions : ou on se dérange ou on méprise… Oui, évidemment, n’importe comment, une tournée d’inspection ne peut jamais nuire, bien sûr !“, Francis Blanche dans les Tontons Flingueurs, dialogues Michel Audiard, 1963)

Orange Banque lance sa campagne le 2 octobre 2017 (créée par Havas Paris)…Un peu plus d’un mois plus tard, le CIC poste sa nouvelle saga publicitaire sur sa chaîne YouTube .

Fidèle à sa stratégie de publicitaire comparative soft, à la Française (comme dans ce spot créé par l’agence Australie, qui conseille aussi E.Leclerc, Nespresso, Petit Navire…), le CIC se paie Orange Banque.

Quand le CIC s’en prend aux looks ringards et aux solutions inadéquates des banquiers traditionnels, son objectif est, sans être grand clerc, de s’extraire de cette image poussiéreuse de l’industrie financière. Et ça marche ! Mais la recette est-elle aussi efficace/pertinente face à une banque en ligne, dont…

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Orient mysteries are about to be uncovered

Nobody understand exactly what is going on there, too much mischief and complexity. But very recently Kurds decided to form their own state, our guess is that it will contribute to clarify the situation greatly. But it will be in a bad way for the western powers and the poor Kurds.

Hawler_Castlethe citadel of Erbil

Nor the Syrians the Iranians or the Turks are welcoming the creation of a Kurdish state, particularly the turks who view that development as dangerous for their own existence as it could permeate to the Turkish Kurdistan. And we do not speak about the Shiite majority of Iraq which is already in a state of war against them. In our view it’s too much force against a fragile, recent and tiny state, he will not survive and it’s demise will be another blow to the situation of the westerns power in the middle east. In short when Erbil will be crushed the US France and UK will have no influence in Iraq, Iran, Turkey, Syria. The bulk of the middle east will be out of reach and in the hands of regionals powers namely Iran and Turkey. What a fall from grace.

Forty years ago the USA had a firm grasp on the Middle East except for Syria an Irak, where the Baas party was holding power, and where the USSR could meddle, but it was all. Turkey was an ally as was Iran Israel and Saudi Arabia. Even Egypt was rotating west under Sadate. In short the western powers hold a firm grip on almost all oil producing countries in the region with the notable exception of Iraq.

The fall of the Shah in 1979 was a first setback, it made Iran a fierce enemy. But Iran is not only a country producing 3 millions barrels of oil a day, and potentially a giant producer of natural gas, it is the biggest Shiite country and as so it play a leading role for Shiites in the middle east. That is a very important point because most of the oil producing countries in the region are Shiite populated. Even the Hasa which is the place Saudis are pumping oil is habited by Shiites which are not that loyal to the Saudi princes. That dangerous situation was clearly illustrated by the events in Barhein, where shia riots where squashed by the reigning Sunnite family with the help of Saudi Arabia. The weight of Shiism is felt all around and it had greats effects those last decades. In short where there is oil Shiites are not that far. It is no surprise that the western powers choose to sustain Sunnites Royal Families which were illegitimate and fragile, they were more easily dealt with. But even contained Iran was a force to be reckoned with.

For example Saddam saw the isolation of Iran as an opportunity to wage war against them crushing a power which could foster an internal opposition dangerous to his bloody reign. He was encouraged by other Sunnites ruled countries in the Persian golf who saw Shiites as a threat to their security and internal stability. By making him useful Saddam relieved the pressure from not being in the hand of the west even if France entertain a good an fruitful relation which was going as far as to sold Irak a nuclear reactor (Osirak). All that stopped abruptly when Saddam took the option of invading Irak, probably the worst decision possible in retrospect. The west was simply too eager to put Irak under their yoke to resist the temptation. Despite two Iraq wars the US and its allies where unable to take hold decisively in Irak especially for the oil which is what matters the most. Exxon and others abandoned their contracts and where replaced by Russian companies except for the Kurdish region where the autonomous authority decided to go with Exxon and Total.In truth Kurdistan is the only region of Irak which is open for business in Irak, 2 millions barrels are at stakes.

Our point is that even the support of France and the USA will not be enough for that small oil producing country it will be crushed by the Iranians, the Turks and the Iraqis. It will make things much more clearer as old regional powers will appear as the real masters of the area. Then quickly the shiite power in oil producing region will start to be felt very heavily, as it is now felt in Yemen.Turkey will try to play the equalizing power modulo generous gifts from the Golf. In short a new game is about to start and the westerns power will only have cards not the hand.

When Janet the dove became an hawk


 No Christmas gifts for Président Donald 

Explaining why Janet is very political explains that we will have a Trump’s Fed.

In September 2016, Janet though that the situation was not proper for a rate hike, Hillary Clinton was ridding high. Now in December, as President elect Trump is nominating his cabinet, it is urgent to hike them, so be it. But the surprise was not there, the American economy is now so strong that she talked of three hike in 2017. The American people didn’t noticed it but the long awaited boom has finally arrived, since September Goldilocks camed back.

It’s a joke, the ending of the Obama’s presidency would have been a good time to let rates go higher, prompting a long awaited purge in the bond market; it would have been good for the USA and for the world. But Democrats were desperate to keep the power, there would be no end of mandate crash as there was in 2000 and 2008, Hillary Clinton was to be the new president…Pennsylvania, Michigan and Wisconsin decided otherwise, wisely I think.

But now President Donald have a problem on his tiny hands ! If he doesn’t want to destroy his presidency, he can’t let a bond bloodbath occur now, he would own it. Further more, with Janet hawkishness, the dollar is going stellar which is a less than ideal spot for a man which want to bring back jobs. All that means that his administration will have to ensure the Fed is obedient and remain the good dove it was during the whole Obama’s presidency. That fight will begin on day one, don’t forget to follow Donald on twitter…more fun is on our way !

Dollar bloodbath and inflation, at last !croyez_le_le_president_donald_trump_cartes_postales-r6a1cf94370b54366b8d8b3ec4de6a51d_vgbaq_8byvr_324

All that means that we will see a fight for the Fed which will be followed be a very lenient new policy. The bond market will not collapse as it is doing since the Brexit but the dollar will go down from his current high mark. Otherwise, a Trump’s presidency will not be able to have any significant impact.

From our perspective, Donald Trump is very unlikely to not act and launch an all out offensive to make the Fed giving up it’s current policy. A weak dollar is still the best way to take protectionist steps. As oil is following an international price, it will give a big boost to producers in the USA : they need that, Rex Tillerson could tell you that. So all in all, we think that the markets are going to be surprised in 2017, rates will not go higher and higher and sometimes in September next year, we will have a Fed member telling us that the economy is not that stellar, to say the least. It will high time, a new very expansionary budget will be on his way !

On the long run all that means that the USA economy let a golden occasion to make things right in September, the political opportunity is now over. It’s only logical to assume that the USA and Europe are going to glide further on the Japanese road of no interests for at least four more years. It should be understood that we’ve been there for a long time now and four more years…is a long time. Our broken system is very tired and it could burst any day, no one knows, but here we make the bet that President Donald will not dare the beast …Maverick perhaps, mad no !

Trumpism is not Trump’s fault !

Donald Trump

The long view on Trump. Reading the legacy media, shock and surprise seemed to be the only way to illustrate the 8th of November upset. For us, that way of branding the event is as deceitful as the polls where at the event of the election ! It is just another way to skip the real subject : the possibility of an historic turn-around in US politics. One that could have happen four years from now but who took place a few days ago for reasons that will appear anecdotal in due time. To understand it we have to go back 153 years. From an economic stand point, the Civil War saw free traders being crushed by protectionists. Appomattox1 was the starting point of an industrial boom like no other. It took half a century to a country thorned by Civil War to become the first industrial power in the world. The foundation of that prosperity was protectionism.

But when the US became the first industrial power, it became the powerful free trader, as England did at the hight of the nineteen century. It is only logical once again, there were so much profits to rip from the world’s markets that temptation was irresistible. In 1945, Europe needed americans products to rebuild itself. Things began to change in 70’s when deficits made their appearance but the US remained the indispensable economy in the world. But on the long run, american might on globals markets wane more and more. As it happened to every declining producing economies, finance became the name of the game. Thirty years of declining interest rates produced a financial boom like no other, it could be said that it is already over. 2008 showed clearly that Wall Street irrational exuberance could not go forever. Quantitative Easing signals the end of that economic phase. Todays interest rates can’t go lower without destroying the real economy for good. That is why Central Bankers are edging their bets on that front, it was necessary to stop the deflation but it was dangerous to push for another bump in the monetary growth. In short, the US economy is sitting at the bottom of the growth cycle, something have to change.


A view of Shangai’s port

Now is time for change, a new giant is know working it’s way to the top. China, according to Purchase Parity Power, is now the new leading economy in the world. It is a producing behemoth as strong as the US where on the eve of the 20th century. Times ares changing and we have to change with them. The player which will earn the marginal product of world trade is not the USA anymore. An open border policy cannot be a net positive for the US economy given world markets circumstances. While that process was already hitting hard, the rust belt “America Inc.” could rip healthy profit from the flow of service and goods coming from Asia. But now, it is clear that chinese and others asian companies are on their way to manage the process from the producer to the consumer. From now on, it is clear that the fortune 500 companies are going to feel the heat more and more. Following our perspective, it is not difficult to understand that the 8th of November is not that a surprise : it was only a matter of time before such an event took place in the historical process, and, if history maybe of some help, it could bring the American people rich rewards in due time.

But if it’s potentially an healthy thing, why so much noise and consternation ?

To understand that, it is necessary to point at the social forces behind the statu quo. It was not for nothing that Goldman paid Hillary Clinton absurd amount of money for questionable speeches; it is worth noticing too that the Silicon Valley was behind her, at the notable exception of Peter Thiel 2

Finance could suffer heavily from a financial reorganization focused on production, the tech companies are among the last ones to grow in the international sphere. Just imagine how much trouble it would be for Apple if president Donald set punitive trades tariffs. For them, change could bring mayhem, that fact founded a powerful alliance. Add to that the interests of a security apparatus build for imperial status and you’ll get a good view of what the establishment is. In short, what is good for Apple and Goldman Sachs is not so for main street and that fact is set to grow bigger and bigger each year passing. It’s a loosing war, but the Civil War was also decided in it’s ending from the very first day. We can only suggest that the terrible ideological fight taking place is an healthy alternative to civil war. It should not be surprising if it get even nastier.

11865 : the reddition of Lee’s Potomac army

How US love for the kurds is an old story !



Those days kurds are all over the news. They are fighting ISIS in Syria in the same move that see them helping on the outskirts of Mossoul. We are told that they fight bravely against evil.



It must be said that this sudden glory is founded on serious facts :



In October 2011, ExxonMobil signed six Production Sharing Contracts covering more than 848,000 acres in the Kurdistan Region of Iraq. 1 Total23 is there too re-discovering oil in places already prospected one century ago. It seems that friendship and business are going hand in hand those days in the north of Irak.



But it should noted that the interest of the westerns powers for the Kurds is not new.


During the seventies, la cause Kurde, was already important for the USA.


An important episode is cleared by US archives. The USA and Iran helped Kurdish leader to build a military force able fight the Iraqi army. In those times Iraq was nearly aligned with soviet union, Kissinger thought it was important to create a bleeding wound in Iraq. So the CIA took action accordingly.


« CIA reports that more than 1,000 tons of non attributable arms, medicine sand blankets have been supplied(a value of over [less than 1 line not declassified] which cost less than [less than 1 line not declassified]); our monthly subsidy of [less than 1 line not declassified] has enabled Mulla Mustafa to maintain and strengthend a 25,000-man military force; intelligence on Iraq is received from Mulla Mustafa’s mountain headquarters [less than 1 line not declassified] our support is channeled through the Iranians (who contribute $4.8 million per year plus unknown arms and services) and has been coordinated in general terms with [3 lines of text not declassified]. »4



But the central government in Iraq prevailed and a few years later, kurdish people will find they where on their own all along. By a vicious twist Iran became the enemy and Iraq, for a few year, was seen as a less bad option. Saddam Hussein who was really a bad guy took good care of those poor people. Nor the USA or France took any action. It took the first and second Iraq wars to change the tide, again, kurdish people proved to be useful to the westerns powers. Step by step the Peshmerga build something which is almost a state, now.



But Iran’s position seems pretty clear on that subject, there will be no partition of Iraq, it can be presumed that the Turkish state is not a friend either. Kurdish people are now fighting alongside the US and France which are legacy powers in the region. In case of a retreat of the west, the future would be very bleak for kurdistan. I am very afraid that we are on the verge of another dark decade for Kurdish people. In time we will be able to gauge the enthusiasm and rhetoric we are exposed to for what it is, greed and