Weekly News Round Up 11-2-9
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The Alpha-Omega Report's
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Weekly News Round UP
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For 11-2-9
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Saudis Dump NYMEX Oil Benchmark
Saudi Arabia's state-owned oil company Saudi Aramco announced last week that it will no longer sell its oil based on the price of West Texas Intermediate Crude Oil. West Texas Intermediate Crude is the basis product for the New York Mercantile Exchange's oil futures trading. It has been the "benchmark" trading price for oil pricing around the world for decades.
The Saudi company explained that the reason for dumping the NYMEX's contract as its price basis for oil sales is due to a desire to price oil in physical delivery terms and not on the basis of future's trading which experiences greater price swings. Instead, Saudi Aramco will use a brand new benchmark based upon US Gulf Coast oil prodouction and delivery that is not futures oriented.
The new benchmark to be used by the Sauds will be pricing from The Argus Sour Crude Index (ASCI) which is a price measurement established in May of this year which publishes a daily value of US Gulf Coast medium sour crude. It is based upon physical "spot" market transactions and not on futures contract speculation.
The daily ASCI price is the volume-weighted average of all deals done for three grades of crude combined: "Mars," "Poseidon," and "Southern Green Canyon" crude. Argus prices are already extensively used in the US midcontinent and Gulf coast crude markets to price long-term supply contracts.
It should be noted that the ASCI price continues to be influenced by the pricing of West Texas Crude as priced at the NYMEX but ASCI responds quickly to global market dynamics whenever West Texas Intermediate experiences price dislocations due to excessive speculation by gambling investors. The idea is to limit dramatic up or down price swings in the futures markets.
In light of the Saud move, there is now a great deal of gossip and speculation as to how the Saudi move will impact the NYMEX which has historically been the home for the largest amount of oil trading in the world, thanks to future's contract speculation.
This move does not change the fact that the world still depends on America to set the world price for oil trading. As such, oil's status as noted in the Babylon prophecies of Revelation 18:11-13 still rests with America. All of the commodities and trade mentioned in that passage still applies to the United States. It does however eliminate New York City as Babylon itself.
Revelation 18:11-13 is a list of items where the world's trade is tied to the Babylon entity as the market place leader for world trade. We have asserted for years now that New York City is not the Babylon of Revelation, Isaiah and Jeremiah but rather a part of Babylon because Babylon is a nation, with a military capability in outer space which is a feature that no city can claim.
Additionally, Jeremiah notes that Babylon is a nation because he notes the destruction is upon 'her cities" and describes the devastation on farms and rural areas, not just an urban center. So this latest development simply underscores the fact that Babylon is not New York City alone.
For more information on the Saudi switch from NYMEX to the ASCI - LINK HERE. For additional comments and analysis, LINK HERE.
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Chicago's CME Takes ASCI
After Saudi Arabia announced it would dump the New York Mercantile Exchanges West Texas Intermediate Crude contract as the benchmark for pricing Saudi oil to its customers, The Chicago Mercantile Exchange announced that it had reached a deal with Argus to develop a future's trading contract based upon the Argus corporation's ASCI basket of oil pricing. Such a move may mean that the Saudi attempt to get away from the influence of excessvie speculation may end in frustration. The Saudi move to ASCI was fueled in part by the fact that the basket of prices had less influence from future's speculators.
With the advent of the CME trading of ASCI in futures contracts, the possibility will exist that radical price swings may develop with ASCI just as with the NYMEX's West Texas Intermediate. It will take some time for the Chicago Mercantile Exchange to establish the new future's contract for trading. The US government's regulator of futures trading, The Commodities Futures Trading Commission (CFTC) will have to approve the CME's new oil trading venture and then oversee and regulate the new program. For more details on this story, LINK HERE.
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NYMEX Adds 2 New Oil Contracts
In response to Saudi Arabia's move to dump the NYMEX's West Texas Intermediate oil trading market, the New York Mercantile Exchange announced that it will add two new oil trading programs in a bid to retain market dominance it has enjoyed for decades.
For decades, the oil trading on the NYMEX set the world pricing for oil even though the London trading for Brent Sea crude provided an alternative price. The world always looked to the NYMEX as the primary means with which to judge the day's value of oil.
Last week, Saudi Arabia announced it would no longer use the NYMEX's oil market for pricing its oil but instead use a non-future's contract based benchmark, the ASCI, which is a basket of 3 US Gulf Coast oil grades which are "sour" and not "sweet" like the NYMEX's West Texas Intermediate crude oil Saudi oil is also "sour" and has much more in common with the Gulf Coast basket of sour oils.
In a bid to counter the Saudi move, the NYMEX will add 2 new oil products for futures trading that are "sour" grades of crude oil and closer in quality to Saudi Arabia's "sour" crude. The grade difference of oil make a difference in how the crude is processed, with "sour" requiring more refining than "sweet." Most of the world's refineries are geared to only process "light, sweet" crude and not the heavier "sour" crude which takes more processing time and is more costly to refine.
It should be noted that 75% of the world's oil suppy is "sour" in grade while only 25% is light, "sweet" crude. Only 20% of the world's refineries were built to easily process "heavy sour" crude. The NYMEX move to now market sour crude indicates a dramatic change in how the world will relate to crude oil and may provide an impetus for oil refining companies to either build new "sour" refineries or to re-tool existing refineries for "sour" refinement.
For more on this story, LINK HERE.
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EU Presidency Race In Doubt
Opposition To Tony Blair Grows
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Clinton Hurting Peace Talks?
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Dr. Doom Fears Asset Bust
Analysis by Dr. Nouriel Roubini
Since March there has been a massive rally in all sorts of risky assets – equities, oil, energy and commodity prices – a narrowing of high-yield and high-grade credit spreads, and an even bigger rally in emerging market asset classes (their stocks, bonds and currencies). At the same time, the dollar has weakened sharply, while government bond yields have gently increased but stayed low and stable.
This recovery in risky assets is in part driven by better economic fundamentals. We avoided a near depression and financial sector meltdown with a massive monetary, fiscal stimulus and bank bail-outs. Whether the recovery is V-shaped, as consensus believes, or U-shaped and anaemic as I have argued, asset prices should be moving gradually higher.
But while the US and global economy have begun a modest recovery, asset prices have gone through the roof since March in a major and synchronised rally. While asset prices were falling sharply in 2008, when the dollar was rallying, they have recovered sharply since March while the dollar is tanking. Risky asset prices have risen too much, too soon and too fast compared with macroeconomic fundamentals.
So what is behind this massive rally? Certainly it has been helped by a wave of liquidity from near-zero interest rates and quantitative easing. But a more important factor fuelling this asset bubble is the weakness of the US dollar, driven by the mother of all carry trades. The US dollar has become the major funding currency of carry trades as the Fed has kept interest rates on hold and is expected to do so for a long time. Investors who are shorting the US dollar to buy on a highly leveraged basis higher-yielding assets and other global assets are not just borrowing at zero interest rates in dollar terms; they are borrowing at very negative interest rates – as low as negative 10 or 20 per cent annualised – as the fall in the US dollar leads to massive capital gains on short dollar positions.
Roubini continues ... to explain at lengh then further closes:
This unraveling may not occur for a while, as easy money and excessive global liquidity can push asset prices higher for a while. But the longer and bigger the carry trades and the larger the asset bubble, the bigger will be the ensuing asset bubble crash. The Fed and other policymakers seem unaware of the monster bubble they are creating. The longer they remain blind, the harder the markets will fall.
To read "Dr Doom Roubini's entire article: LINK HERE.
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Warnings: Locust Plagues To Come
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Doomsday Comet in 2012?
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A New 6-6-6 Chip Implant Approach
Involves "Nano-Technology
Implants Via Vaccines?
New bio-medical technology using a new type of technology called "nano-technology" may hold the key to micro-ship implantation that becomes the 666 " Mark of the Beast." For more details, LINK HERE.
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1-World Gov't In December?
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Australia Faces Famine
Expert Warns
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Attempted Murder of 6 Microbiologists
Since 9-11 there has been an extraordinary string of bizarre murders and accidental deaths of the world's top microbiologists who deal with infectious diseases and research on vaccines as well as biological weapons.
Now coming to light, we get news that 6 Harvard microbiologists have narrowly avoided being murdered. LINK HERE for details.
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Baby's Made Without Sperm or Egg
Medical science is rapidly moving to an ability to create a human being without male sperm or a female egg. More details, LINK HER.
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CIT Files Bankruptcy
5th Largest Ever
Bad Mortgages At Fault
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Audit of Fed Reserve Blocked
A move by Congress to have the U.S. Federal Reserve audited has been blocked. The NWO crowd shows Congress who is in charge, so it should come as no surprise. We seriously doubted that an audit would ever be allowed. Details, LINK HERE.
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Mainstream News Media Dying
New statistics are out showing that fewer people are paying attention to the mainstream media these days and are instead relying on the internet. More details, LINK HERE.
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China Creates Snow Storm
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Swine Flu Closes Ukraine Schools
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Samoans Fear Another Killer Tsunami
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