Category Archives: Politics

New deal EU - Britain

England’s New Deal With EU protects British Interests

In recent years, there has been growing concerns in Great Britain about the intrusive nature of the European Union (EU). Many people in parliament and the UK business community have long criticized the EU about overreach, bordering on prying into the country’s business.

Amid recent calls for England to depart from the EU, Prime Minister David Cameron has reached a deal with EU officials. As part of the deal, the UK will remain in the EU, but can selectively abide by some of it’s guidelines should member states decide to move towards a “European superstate.”

This move was made in anticipation of the EU getting further involved in immigration and economic issues throughout Europe. It is this additional intrusion that has drawn the ire of political leaders like anti-EU politician, Nigel Farage who believes England is strong enough to run an independent state in all regards.

On the new deal, Cameron had this to say; “This is enough for me to recommend that the United Kingdom remain in the European Union having the best of both worlds. Turning our back on Europe is no solution at all.” He later added that this new “live and let live” agreement was exactly the kind of solution the people of England have wanted for years.

With the new deal in hand, Cameron is prepared to have an in-out referendum put before British citizens by sometime during the summer. Between now and then, both opponents and proponents of the new deal will be busy working to pull enough votes together to dictate whether or not England stays in the EU.

It’s worth noting that leaders from some member countries see this as nothing more than posturing, but are resigned to the fact Cameron has the right to do what it takes to protect his countrymen.

US supreme court

The Political Gamesmanship for the US Supreme Court Has Begun

Within hours of learning about the passing of US Supreme Court Justice Antonin Scalia, the political posturing by both the democrats and GOP had begun. The sad news came as a shock on Saturday evening, February 13. As both President Barack Obama and GOP Congress leadership heard the breaking news, they immediately began the process of applying political pressure on each other about the prospects of a replacement for Scalia.

At stake is the soul of America for generations to come. This would be the third opportunity for President Obama to make a Supreme Court appointment. His prior two appointees, Sonia Sotomayor and Elena Kagan, have proven to be quite liberal in their approach to the US Constitution and the laws of the land.

While one would hope the Supreme Court would remain apolitical, the reality is quite the opposite. Currently, there are now four Supreme Courts justices who are considered conservative while the remaining four typically vote as liberals. Scalia was a staunch conservative who always kept his eye on the intent of the constitution when making his judgements.

Now sitting four to four, the next Supreme Court Justice would be considered the swing vote on issues that typically get divided among conservatives and liberals. President Obama almost immediately announced his intention to put forth a nominee as quickly as possible while putting pressure on the GOP held Senate to move swiftly towards an appointment.

In turn, GOP leadership is calling for the President to put off any nominations until the election current cycle has been completed. If Obama gets the appointee, the Supreme Court would most certainly take on a liberal persona. If the Senate decides to delay hearings until the election has been completed, they will be doing so in hopes of gaining the White House. It would then be up to a conservative President to put forth the nomination.

Either way, Americans can brace themselves for a real war as the country’s political leaders battle for the soul of America. With several political issues pending before the Supreme Court, it would seem to be a long shot at best the Obama will get this coveted opportunity to further move the Supreme Court to the left.

Trump Cruz Iowa

Senator Cruz Stuns Trump in Iowa

The 2016 elections officially got underway early this month as folks in Iowa gathered for their historic caucuses. On the democrats’ side, it turned out to be a real horse race as former Secretary of State Hilary Clinton defeated Senator Barry Sanders by less than .5% of the caucus vote. With that, each person is expected to get support from half the delegates at the state convention.

On the GOP side, the results were a little more conclusive, but not in favor of the candidate that was leading by a safe margin according to the polls taken just days before the event. When the smoke finally cleared from the Republican caucus, Senator Ted Cruz from Texas had defeated billionaire businessman Donald Trump with 28% of the vote. Trump received support from 23% of the caucus members, barely beating out Florida Senator Marco Rubio by tenths of a percentage for second.

The results have to be confounding for Trump’s camp that was expecting an easy victory. What went wrong? There is a few theories on that. First, there were a lot of voters during polling that had yet to make up their minds. The fact Trump decided to skip the Fox debate just days prior to the caucus may have prompted those undecided voters to break for Cruz or Rubio.

Secondly, Trump failed to carry the day with voters under 49-years of age as had been predicted based on his popularity with that group on as national level. Finally, it might have been nothing more than the normal aberrations that occur when polling is done. That’s why everything is stated with an expected margin for error.

If anything, the results in Iowa made clear that this election cycle is going to be close and highly competitive. Leaving nothing to chance, look for all candidates to step up their games as they move on to New Hampshire and South Carolina.

Oil companies OPEC

Small Oil Companies Feeling the Crush

With oil prices continuing to plunge due to large supply reserves all over the world, small oil companies are quickly finding themselves at the point of critical mass. After reaching a peak of $103.66 per barrel in June 2014, oil prices have fallen over 70% to a recent low of $29.93. Even worse is the prospects of continuing downward pressure on prices as the OPEC nations continue producing oil with little or no regard for pricing levels.

Not only are small oil concerns feeling the crush, but they also find themselves with fewer options as the oil price plunge continues. It takes a great deal of capital investment to drill, set up a rig and maintain on-going operations. After making these huge capital investments between 2010-2014, the financial yield at current price levels is insufficient to cover operational costs.

The options are becoming limited. Most oil drilling companies need to continue pumping given that any revenues are better than none. The only other alternative is to cap wells and start laying off large groups of employees. Neither of these two options are going to do much to help companies avoid the prospects of filing bankruptcy.

The increased possibility of major bankruptcy filings within the oil industry is creating an even bigger problem for investors. According to analysis done by the people at Yahoo-Finance, only 5 of 569 oil companies have been able to avoid significant decreases in stock prices. In fact, more than a third of these companies have seen a 90% or more decrease in stock price since hitting its highs in 2014.

While consumers are certainly enjoying the drop in prices at the pump, the strain on the sector and the economy in general could eventually erase the benefits of lower gas prices. It remains to be seen when the bleeding will stop.

Inauguration Of Emirates National Oil Co. Plant

Why are Oil Prices Still Falling In Spite of Tensions Between Saudi Arabia and Iran?

In direct conflict with past history, oil prices are continuing to tumble despite tensions rising between Saudi Arabia and Iran, two of the world’s largest oil producers. Surprisingly, oil prices currently sit at 11-year lows, and falling, as supply is exceeding demand all across the globe.

The trouble began when officials in the Sunni-Muslim dominated nation of Saudi Arabia moved forward with the execution of 47 Shiite-Muslim activists, including prominent cleric Sheikh Nimr al-Nimr. In response, Shiite Iranian citizens attacked and damaged the Saudi embassy in Tehran. The end-result has been the total cessation of diplomatic ties between these two neighbouring countries.

Other than creating more upheaval and unrest in the Middle East, it would appear that recent events are having little to no economic effect on other countries, even those that are entirely dependent on oil supplies from one of these nations or the other.

One reason events like this tend to have minimal economic effect on other countries is because of the lack of desire of foreign nations to invest in countries facing so much turmoil. If it weren’t for the need to import affordable oil, most nations would most likely cease to transact business of any kind with many if not all countries in the Middle East. It’s just too risky for most foreign investors.

As far as the future prospects of oil prices, it would appear that oil supplies are high enough to continue putting downward pressure on pricing. It seems the only way to curb falling prices is for OPEC to agree to massive production cuts. That said, it isn’t likely to happen because both Saudi and Iran are part of OPEC and neither would realize an advantage from such cuts. Also, OPEC doesn’t have the kind of economic influence over the oil market like it did in 1970s and 80s.

Figthing ISIS

Fighting ISIS With an Unconventional Weapon

While the bombs might help slow down ISIS troops on the ground, it is doing very little to upset the structure of the organization, and yes it is indeed an organization. As with any other organization on the planet, money is the fuel that drives the engine. With that in mind, leaders and key officials from around the world have decided to wage financial war on ISIS and its ever-expanding bank account.

In recent weeks, the United Nations Security Council has passed resolutions to make it increasingly more difficult for ISIS to raise funding for its war efforts. Over the past couple of years, the terrorist group has raised billions of dollars through the sale of stolen oil, kidnapping for ransom, extortion, outside contributions and the sale of confiscated cultural antiques.

While these resolutions stand to do little to immediately stem the tide of financing being accumulated by ISIS finance ministers, they are helping to form a financial battleground on which nations from around the world can financially join the fight against this terrorist monster.

According to CBS News Senior National Security Analyst Juan Zarate, “This is the best-funded terrorist group in modern history.” In order to disrupt efforts to continue raising money from illegal endeavours, the UN is calling on member countries to freeze assets suspected of belonging to ISIS and affiliated groups. They are also asking to see more efforts being made to criminalize transacting business with the terrorist group.

This is not the first time a financial war approach has been used to combat terrorists. This is in fact quite similar to the tactics that were used by the United States when they confronted al Qaeda in Iraq. As part of the Treasury group that participated in those efforts, Zarate recommended, “You squeeze from the outside, you cut off choke points, but you’ve got to physically dislodge them from the resources they have.”

Gun stock prices increase

Gun Stock Prices Seeing Big Inceases

In financial news, there is one sector that is experiencing a surprising boost in stock prices due to a number of factors that are both old and new. Gunstocks like Smith & Wesson (SWHC) and Sturm, Ruger (RGR) both saw 5% increases during trading on Monday, December 7.

It’s not unusual to see top gunstocks in this sector experience price increases during the holidays, especially the week after “Black Friday.” The extra boost these stocks saw on Monday was due in large part to last week’s mass shooting in San Bernadino (14 dead, 21 injured). President Barack Obama’s immediate call for stricter gun controls in a speech he delivered to the American people also added fuel to the fire. He spoke about both terrorist threats to the nation and continued gun violence on the streets of America.

In recent years, there has been a rash of mass shootings with most of them involving some type of assault weapons. In response, liberal factions, including President Obama, have tried to seize on the opportunity to get gun concessions from public sympathy. To date, President Obama’s rhetoric and calls for stricter gun controls related to background checks and assault weapons have been met with strong resistance from the National Rifle Association and conservative groups from around the country that stand behind the 2nd amendment to the Constitution.

On the year, Smith and Wesson has already seen a 113% rise in its stock price while Sturm, Ruger follows close behind at 67%. With the political environment keeping gun control at the top of the debate list, current trends within this sector are likely to continue. Anytime Americans sense a threat to gun ownership rights, investors see an opportunity to pick up shares in companies that are likely to see a big boost in revenues as gun enthusiast clamor to pick up those items that might become banned.


China’s Reclamation in the South China Sea

What makes it a headline

What new and hot in the world todays is the reclamation in the South China Sea by, of course, China. For some time now, China has been doing some construction on some of the islands and reefs in the South China Sea. It is said that the purpose is to improve and maximize the functions and potentials of the said islands and reefs, as weel as of the living conditions there. The reclamation has been going so fast, and that doesn’t make some countries happy.

Several other countries also have their eyes set on the Spratly archipelago, such as Malaysia, Philippines, and Vietnam. But what makes the particular reclamation case by China becomes the spotlight? It may be the fact that China has reclaimed a lot, over 2000 acres in the South China Sea. That number exceeds all of the combined reclaimation in the said sea by the rest of the claimants. It also surpasses what noted in the entire history of the region is. Moreover, it may be the fact that China did all of that in only the last 18 months.

Many countries are concerned whether China will stop shortly, or whether the project of its will go on further. The stretch of water concerns big countries around the world, such as US, Japan, and other ASEAN members. These countries are worried not only about the marime conditions and safety. They are also alert about China’s behavior that seems to risk disorders in the region.

The United States consider that behavior of China’s as “out of step with internaitonal norms.” For Japan, it speaks out that the current condiotion may affect the peace and balance in the region. It also states that China, as well as other countries reclaiming in the South China Sea, should behave more responsibly.