Drowning in Cash, Big Oil’s Biggest Challenge Is How to Spend It

By Bloomberg – Re-Blogged From Newsmax

Big Oil’s big payday has finally arrived. The question now is how to spend the extra cash.

Investors will be reading the third-quarter tea leaves to discern whether executives plan to boost dividends and buybacks, hike spending on shiny new mega projects, or perhaps even do both.

What they do know is that fresh sources of oil and gas are needed over coming decades to meet the world’s insatiable demand for energy. Spending too much would defy the new-found commitment to financial discipline, while spending too little could choke new supplies and raise crude prices. Higher prices, in turn, may brighten the appeal of green technologies that would hasten the industry’s demise.

Continue reading

David Stockman: Soaring Federal Deficits

By Rob Williams – Re-Blogged From Newsmax

David Stockman, the former budget director for President Ronald Reagan, said the spending plan now being hammered out in Congress will add trillions of federal debt and smother the U.S. economy.

Congress on Wednesday night released the text of the 652-page budget deal that will raise strict spending caps on domestic and military spending in this fiscal year and the next one by about $300 billion. It includes almost $90 billion in disaster relief in response to last year’s hurricanes and wildfires, and would lift the federal debt limit until March 2019, the New York Times reported.

Continue reading

Q3 GDP Growth was Hogwash

By Michael Pento – Re-Blogged From http://www.PentoPort.com

Since most everyone is focused on the upcoming US elections, many investors may not have had the time to peel back the onion on the third quarter US GDP report. So, if you just glanced at the headline GDP number of a 2.9% annualized growth rate, you may have concluded that the US economy was finally on its way to sustainable growth.

That 2.9% read was the biggest in the last two years…and it also beat the median forecast of 2.6%. However, to put that number in perspective, average GDP growth over the past four quarters was only 1.5%, and the average for first three-quarters of 2016 is just 1.7%.

So before you get out your party hats and declare this economic malaise over, there were a few notable concerns in that Q3 GDP report.

First off, consumer spending, which accounts for more than two-thirds of U.S. economic activity and just under 70% of GDP growth, fell significantly during the quarter to an annualized rate of 2.1%. That 2.1% is a little bit over half the level of spending posted in the previous quarter. Also, spending on durable goods fell three-fold from Q2 levels.

Third-quarter growth was also flattered by a buildup in business inventories, as re-stocking shelves added 0.61 percentage points to GDP.

Continue reading