Nuts, In A Shell: The Turks are afraid of the Kurds. The Sunni regimes of Saudia Arabia, Turkey, Qatar, Kuwait and the UAE are more frightened of Shiite Iran than they are of the jihadists of the Islamic State. Iraq isn't actually a country and never was. Egypt is trying to draw attention to the breakdown in Libya (and the Egyptian military is too busy controlling its own population to do much else). Only the US – for its own internal political and economic reasons – sees an up-side to half-heartedly 'doing something', although what it has tried to 'do' in Muslim areas in the last decade hasn't worked out too well. Which brings us up to date.
Smoke and Mirrors: If oil is what gives Scotland's independence movement its leverage, it's a damned short lever.
Corpus Delicti: The Fed reports that US industrial production declined 0.1% last month and manufacturing output fell 0.4%. These were the first declines in either index this year (but the July data for both was also revised downward.) The biggest drop was in auto production (down 7.6%) which raises questions about the continuing strength of the sub-prime car-loan driven 'renaissance'.
Perspective: The soaring S&P 500 is masking the real state of the real markets. Over 45% of Nasdaq Composite stocks are down 20% or more, same for the Russell 2000.
Crudely Speaking: Industry data from some 65,000 fracked oil and gas wells, makes it clear that this is not a sustainable long-term technique. Production from fracked wells makes a declining hyperbolic curve, falling about 70% the first year, nearly 40% more the second and 30% in the third, for an overall 3-year decline of about 85%. Because the 'sweet spots' get drilled first and because the source formations are geographically limited, domestic production will begin dropping within a few years even as ever more wells are drilled – running faster and faster and losing ground. In the long term, fracking is a short term thing.
The Lower Down: The OECD now forecasts the U.S. would grow by 2.1% this year, down from the 2.6% guestimate in May. The euro area GDP was downgraded May's 1.2% to 0.8%. But it's still 'the recovery' marches on. They say.
See Change: Home sales in the pricer parts of CA – which are the same areas where most of the people live, of course - are “collapsing.” Perhaps the 90% of the 25-34 year age group who do not own a home and do not plan to ever buy one has something to do with it. These prime first-home buyers do not represent any “pent-up demand”. Price has a lot to do with it, so does experience – the experience of their parents, which was not lost on them.
Peace In Our Time: The US has started over 80% of the armed conflicts in the world since World War Two (201 of 248). US-instigated conflicts have killed at least 30 million people, 90% of them non-combatants.
Voice of Dissent: Bernie Sanders, once again demonstrating that he just doesn't get it, says that American soldiers didn’t die “so billionaires could buy elections”. That's a good one!
Porn O'Graph: The Party's Over, North Sea/Scottish Independence edition.