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Financial Free Speech From Zero Hedge's RSS Feed

Outspoken bloggers Tyler Durden and Marla Singer dish up controversy and blasphemy we all love and share with the free speech trading community - not the online casino usa that many think the markets are - but a place where both metrics and reason play a big roll. Read on.

Could The Aramco IPO Kill OPEC?

Could The Aramco IPO Kill OPEC?

Authored by Cyril Widdershoven via OilPrice.com,

The global oil market could be entering unchartered waters in the coming weeks. After the US shale revolution, which threatened OPEC’s hold on and the stability of the market, a new danger is lurking around the corner.

The Aramco IPO, the largest IPO in history, will not only impact OPEC but will also have repercussions for the Kingdom, Crown Prince Mohammed bin Salman, and the entire GCC region.

 

Most analysts have pointed out that there are some major issues with the company’s financials, its valuation and possible returns for the Kingdom. International banks are presenting their own IPO valuations, indicating a wide range of price targets, leaving a lot of room for speculation. At the same time, Aramco’s IPO prospectus indicates some threats which seem not to have been included in most analyses, such as the impact of flattening oil demand growth, potential legal repercussions if listed on Western stock exchanges and the potential lack of interest from US and European institutional investors.

And the financials are just one thing analysts are reviewing. Legal risks, including the 9/11 bill, the attitude of the U.S. congress, and the NOPEC bill could pose a major threat to the future of Aramco.

The possibility of investing in an oil company that could be sued for so-called terrorism or violent actions taken by third parties may be new but oil companies have always been targets of legal cases.

In the recent past, we have seen several court cases and class action lawsuits against companies such as Shell, ENI, Total and BP. And, when listed, Aramco will be more of a “normal” company than it has ever been. Saudi Arabia is taking a risk that is not yet quantifiable but which presents a ‘clear and present danger’.

Aramco could also be facing the same scrutiny that other IOCs are currently facing from global warming activists. If climate cases are filed in the US, or some European countries, Aramco could find itself in trouble. Multi-billion-dollar claims should be expected as activists will see the world’s biggest oil company as a symbol against which their cause can rally.

The success of the Aramco IPO, driven by Asian and non-Western institutional investors, sovereign wealth funds and even IOCs, has another non-environmental problem as well. As the main actor within OPEC, Aramco will have to act differently when addressing the market if it wants to be a real listed oil company. Shareholders, even from countries that are really inclined to address global warming issues, will still want to see rising profits and a steady dividend. In this increasingly difficult environment, Aramco will have to deliver to both the Saudi state and its new investors. 

Acting as a normal oil giant will require a serious change in attitude, management and goals. Even though the company is not officially directly owned or linked to the Saudi government, the company has always been an instrument of the Kingdom’s geopolitical and economic strategy. Aramco’s production and investments have always been clearly linked to the future of Saudi Arabia and the geopolitical stakeholders it represents.

A stock market listed Aramco would have to break with this strategy, putting the company on a collision course with OPEC’s agenda. Shareholders will not be very happy if Aramco’s production volumes are determined by the oil cartel’s members. On the other hand, if Aramco decides not to comply with OPEC, it will render the cartel powerless. At present Saudi officials are vehemently denying that OPEC is being threatened, so shareholders and potential investors should be aware of this major issue before investing in the company.

While the risks are high, some positive things should be noted too. The Aramco IPO has already led to some unexpected positive changes in the GCC region. One could argue that thanks to the IPO circus, Iran, Saudi Arabia and the UAE, are not yet at war. Riyadh and Abu Dhabi have understood that risking a war would have not only have meant a bloody conflict, but also the end to most of the region’s economic and social diversification plans. Oil and money now seem to have prevented an all-out war with Iran. Next to this, Saudi Arabia’s ill-fated adventure in Yemen seems to be entering its final phase. More and more rumors show that the involved parties are negotiating a deal that could end the Saudi-UAE confrontation with the Houthis. At the same time, the anti-Qatar Arab coalition (Saudi Arabia, Bahrain, UAE and Egypt) have openly shown willingness to remove some of the sanctions they imposed on Qatar. Opening up may come with its risks, but there may also be some more unintended positive consequences.


Tyler Durden

Fri, 11/15/2019 - 12:35


Tags

Business Finance


Libyan Official Urges New US Intervention After Russians Seen "On Front Lines"

Libyan Official Urges New US Intervention After Russians Seen "On Front Lines"

A new report in Axios suggests that Russia has significantly increased its presence in war-torn Libya, perhaps seeking to clean up the mess left in the wake of the US-NATO led regime change war which toppled Muammar Gaddafi. 

This after a recent NY Times investigation found that at least 200 Russian mercenaries from Wagner Group have been in Libya supporting renegade General Khalifa Haftar's offensive against the UN-backed Government of National Accord (GNA) in Tripoli. 
Soldier allied to the UN-backed government in Tripoli deployed in Sirte, Libya, via Reuters. 

Eight years after Gaddafi's overthrow and brutal field execution at the hands of NATO-backed rebel Islamists, the oil and gas abundant country is still in the throes of grinding factional civil war. 

Interior Minister for Tripoli's GNA Fathi Bashagha told Axios the unfolding “proxy war” will doom the country to become “a haven for terrorists and extremists” unless the US steps in again.

However, the few times the Trump administration has weighed in on the continuing violence, it actually voiced support for Haftar and his Benghazi-based Libyan National Army (LNA), who are "securing the oil" - Trump said last April.
Al Jazeera screenshot of forces loyal to renegade General Khalifa Haftar fighting Libya’s UN-based government.

So ironically Washington and Moscow may currently be on the same side in terms of the major players in Libya; however, other powerful states like Turkey are giving active military support to the GNA in Tripoli. 

The UN-backed GNA has perceived growing Russian presence on the ground of late, per Axios:


Bashagha says he began to hear reports of Russian involvement over the summer, including from locals who described groups of light-skinned people “taking the roads through the desert.”

Bloomberg: "More than 100 mercenaries from the Wagner group headed by Yevgeny Prigozhin, also known as 'Putin’s chef' for his Kremlin catering contracts, arrived at a forward base in Libya in the first week of September to support eastern strongman Khalifa Haftar’s assault on the capital Tripoli."

“By August, they were on the front lines,” the Libyan Interior Minister continued. "The tactics used by Haftar’s forces drastically changed. The operations were becoming very professional.” He also alleged Russian snipers active in the battles, which have been “very effective and very harmful to our forces.”

Underscoring frustration at the confused mess which outside powers have added to in the developing proxy war, Bashagha added, “Ironically, the countries that support Haftar while he attacks a government that is internationally recognized are also allied with the United States.”
Tripoli-based Libyan Interior Minister (GNA) Fathi Bashagha, via Afrique Panorama

Addressing two Arab states currently providing heavy weapons to Haftar, he added: “We are hoping that the U.S. will help push against the UAE and Egypt, to stop their meddling in our country,” according to the Axios report.

“That American withdrawal made many regional countries have their proxy wars, their wars of interest on Libyan soil. And finally now it’s the Russians,” Bashagha said, though predictably (given his government is now in power) without recognizing it was American military intervention in the first place that's the root of Libya's continued chaos.


Tyler Durden

Fri, 11/15/2019 - 12:15


Tags

Politics
War Conflict


Trump Slams "Biggest Double Standard In History" After Roger Stone Found Guilty Of Lying

Trump Slams "Biggest Double Standard In History" After Roger Stone Found Guilty Of Lying

President Trump weighed in on Roger Stone's Friday conviction, tweeting: "So they now convict Roger Stone of lying and want to jail him for many years to come. Well, what about Crooked Hillary, Comey, Strzok, Page, McCabe, Brennan, Clapper, Shifty Schiff, Ohr & Nellie, Steele & all of the others, including even Mueller himself? Didn’t they lie?...."

"....A double standard like never seen before in the history of our Country?"


....A double standard like never seen before in the history of our Country?
— Donald J. Trump (@realDonaldTrump) November 15, 2019
***

Longtime GOP operative and Trump associate Roger Stone was found guilty on seven felony counts related to lying about upcoming WikiLeaks releases during the 2016 US election, along with obstruction and witness tampering.

 


After a trial that spanned just over a week, a federal court jury in Washington, D.C., convicted Stone on five felony counts of lying to investigators, one of obstructing a congressional probe and one of witness tampering.

The charges against Stone were brought by Robert Mueller and handed off to career federal prosecutors in Washington after the special counsel’s Russia probe ended this spring. -Politico


Stone was accused of lying about his contacts with Wikileaks "intermediary" Randy Credico and lying about his contacts with senior campaign officials and Wikileaks about the release of stolen emails harmful to Hillary Clinton during the 2016 campaign.

The counts, via the Washington Examiner (January):

Count One alleges that Stone obstructed the House committee's investigation by denying he had emails and other documents about WikiLeaks-related contacts. During his House testimony, Stone was asked if he had "emails to anyone concerning the allegations of hacked documents ... or any discussions you have had with third parties about [WikiLeaks]?" Stone answered that he did not, when in fact he had a bunch of emails and other communications. The obstruction charge also alleges Stone attempted to prevent Credico from testifying or tried to convince him to testify falsely.
Counts two through six concern specific statements to the House committee. Count Two is based on Stone's assertion that he did not have emails.

Count Three alleges that Stone lied when he said that Credico was his only "go-between" to Assange, when in fact, Stone was also in contact with Corsi for that purpose. "At no time did Stone identify [Corsi] to [the House] as another individual Stone contacted to serve as a 'go-between,'" the indictment says.
Count Four alleges that Stone lied when he said he did not ask Credico to communicate anything to Assange, when in fact Stone asked both Credico and Corsi to get in touch with Assange "to pass on requests ... for documents Stone believed would be damaging to the Clinton campaign."
Count Five alleges that Stone lied when he told the House that he and Credico did not communicate via text message or email about WikiLeaks. Stone told the committee the two talked over the phone, when in fact, according to the indictment, "Stone and [Credico] ... engaged in frequent written communications by email and text message."
Count Six alleges that Stone lied when he testified that he had never discussed his conversations with Credico with anyone at the Trump campaign, when in fact, "Stone spoke to multiple individuals involved in the Trump campaign about what he claimed to have learned from his intermediary to [WikiLeaks]."
Count Seven is a witness tampering charge, alleging that Stone tried to convince Credico to take the Fifth or to lie to the House committee.
***


here's my verdict form. will try to report count by count. pic.twitter.com/BOE2aPf1hX
— Darren Samuelsohn (@dsamuelsohn) November 15, 2019


Jackson tells Stone and his lawyers to take a seat. She thanks the jury.
— Darren Samuelsohn (@dsamuelsohn) November 15, 2019

Developing...


Tyler Durden

Fri, 11/15/2019 - 11:54


Tags

Law Crime


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