FROM THE TELEGRAPH

Bahrain killings bring Mid-East turmoil to epicentre of world oil supply

Escalating violence in the oil states of the Persian Gulf and North Africa have pushed Brent crude prices to a 30-month high of $104 a barrel, and raised widespread concerns over the stability of global oil supplies for the first time since the Mid-East turmoil began.

At least four protesters were killed in a bloody crack-down in Bahrain after tanks entered the capital and security forces smashed a tent city in the main square, opening fire with grapeshot. The situation is fraught with risk since a Sunni monarchy rules a Shia majority with mixed Iranian ancestry and sympathetic ties to Tehran.

"Bahrain is the main danger, not because it is intrinsically important, but because it could trigger intervention by Saudi Arabia," said Faysal Itani, a Mid-East expert at consultants Exclusive Analysis. "We have heard reports that the Saudis have already dispatched troops and equipment to put down the uprising".

Up to 20 people may have been killed in Libya's "Day of Anger" as the Ghaddafi regime faced its first big threat, while there was a fifth day of violent clashes in Yemen. Iran's plans to send two warships through the Suez Canal to bolster its Syrian ally led to hot words with Israel, notching up tensions further.

BNP Paribas said events in the Gulf were setting off a scramble for scarce energy supplies. "Rising oil prices are becoming an increasing threat to the global economy, hitting the net oil consumers of China, Europe, and Japan the most."

Credit default swaps (CDS) measuring bond risk in Bahrain have been rising all week, surging another 24 basis points yesterday to 285. The CDS on Saudi Arabia rose 3 to 127, and Egypt pushed back 9 to 360 as the political euphoria gives way to industrial strikes. The Mid-East holds 60pc of the world's proven oil reserves, and makes up 36pc of current supply.

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Mubarak moves vast assets from Europe to Saudi Arabia

DEBKAfile

Mubarak salvages financial fortune with Saudi helpHosni Mubarak and his family have moved a large part of their assets – guesstimated at between $20 and $70 billion - from European banks to Saudi Arabia and the United Arab Republics against personal guarantees from King Abdullah and Sheik Al Nahyan to block access to outside parties.This is reported by Gulf and West European sources. Tunisian ex-ruler Zein Al Abdain Ben Ali received the same guarantee when he fled his country and received asylum in the oil kingdom.

A Swiss financial source commented: "If he had any real money in Zurich, it may be gone by now."
According to DEBKAfile's sources, the transfers took place on Feb. 12-13. Although a weekend when European banks are closed, high-ranking officials in Riyadh had their managers hauled out of home to execute Mubarak's transfer orders without delay.
The ousted Egyptian ruler was on the phone to Saudi King Abdullah Friday, Feb. 11, immediately after his vice president Omar Suleiman went on state television to announce his resignation and handover of rule to the army. Mubarak called it a military putsch conducted under pressure from Washington. He denied he had resigned or passed any powers to the army. "I had no idea Omar Suleiman was about to read out that statement. I would never have signed it or allowed it to be published," said Mubarak.
The Saudi king voiced understanding for the ex-president's plight and said the Riyadh government was under orders to meet any requests for assistance received from him.

Mubarak views himself still as the rightful president of Egypt. Aware of this, the High Military Council Sunday, Feb. 13, abolished the constitution. Otherwise, Mubarak would have been correct and the military would have had no authority to issue decrees and pass laws without his signature.

The military junta's Western sympathizers were quick to read in the military statement a pledge to call an election in six months. This was not exactly stated. The military council announced that the incumbent (Mubarak-appointed) cabinet would stay in office "for six months or until elections."


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Goldman Learns You Can’t Buy Friends On Facebook
BY EVELYN M. RUSLI

On Sunday evening, DealBook reported that Goldman Sachs and a Russian investment firm, DST Global, invested $500 million, in the deal that valued the company at $50 billion. Goldman has the option to raise an additional $1.5 billion from its investors for Facebook.

But as the pair gets cozy, the investment bank is struggling to win the popularity contest on Facebook.

A quick search reveals no shortage of anti-Goldman groups on Facebook, including “Goldman Sachs Sucks,” “1,000,000 Strong To Demand Our Money Back from Goldman Sachs!,”" “DALTON, JUST SAY NO TO GOLDMAN SACHS,” “Goldman Sachs is Evil!,” “TAKE GOLDMAN SACHS DOWN,” “The Anti-Sachs: Those Who Desire Goldman’s Demise,” and “The Goldman Sachs scandal makes me want to change my name!”

In reaction to Goldman’s investment, one Facebook member started a group on Monday titled, “Keep Your Dirty Hands Off My Facebook.” The group threatens to abandon Facebook en masse on January 31, if Mark Zuckerberg maintains his ties to Goldman and D.S.T.

So far, Mr. Zuckerberg doesn’t have a mass revolt on his hands, the group has only attracted 106 members.

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Soros Gold Bubble Expanding as ETPs Hold 9 Years of U.S. Output
By Nicholas Larkin and Pham-Duy Nguyen - Nov 22, 2010 10:26 AM CT
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Gold may rise as high as $1,500 next year according to the median in a Bloomberg survey of 29 analysts, traders and investors. Photographer: Chris Ratcliffe/Bloomberg

 
George Soros, chairman and founder of Soros Fund Management LLC, speaks at an open discussion at the University of Hong Kong in Hong Kong, on Feb. 3, 2010. Photographer: Jerome Favre/Bloomberg


John A. Paulson, president of Paulson & Co., attends the UJA Federation of New York's annual Wall Street Dinner in New York, Dec. 16, 2009. Photographer: Rick Maiman/Bloomberg


Paul Touradji, founder of Touradji Capital Management, poses in the company's headquarters on Park Avenue in New York, on March 11, 2009. Touradji's $1.8 billion hedge fund was one of the few winners in 2008. Photographer: Bill Cramer/Bloomberg Markets via Bloomberg

Gold’s 23 percent surge this year to a record is proving no deterrent to George Soros, John Paulson and Paul Touradji, whose investments signal more gains for the longest winning streak in at least nine decades.

Securities and Exchange Commission filings this month by Soros Fund Management LLC, Paulson & Co. and Touradji Capital Management LP listed investments in gold as their biggest holdings. Exchange-traded products own 2,088 metric tons, equal to nine years of U.S. mine supply, data compiled by Bloomberg show. Precious metals will produce the best commodity returns in the next year, Goldman Sachs Group Inc. said in a Nov. 9 report.

The purchases show how investors are snapping up hard assets as governments and central banks led by the Federal Reserve pump more than $2 trillion into the world financial system. Gold in exchange-traded products, as much as half of which may be held by individual investors according to BlackRock Inc., is equal to more bullion than the official reserves of every country except the U.S., Germany, Italy and France.


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FROM THE TELEGRAPH

China may be bigger economy than US within two years


Here’s a finding that will have any red-blooded American spluttering into his cornflakes. According to the Conference Board, a highly respected economic research association, China will overtake the US as the world’s biggest economy by 2012, or within two years.

OK, so in dollar terms, that’s obviously not going to be the case. It will be a lot longer than two years before China overtakes the US on that measure. But in terms of purchasing power parity, according to the Conference Board’s latest world economic outlook, China is already nearly there, and by 2020 will have reached a size of output which is nearly half as big again as the US.

Here’s the Wkipedia link explaining what PPP is, but broadly speaking the idea is to measure output according to the volume, not the price of goods and services produced. The assumption made is that identical goods will have the same price in different markets. In practice, this is obviously not the case. A taxi ride in Beijing, for instance, will cost you approximately a tenth of what it costs in London. But it is essentially the same service.
In any case, in PPP terms, the Conference Board’s projections show China as 24.1 per cent of world output by 2020, and the US at just 14.8 per cent.


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From NPR

Prison Economics Help Drive Ariz. Immigration Law
by LAURA SULLIVAN



Last year, two men showed up in Benson, Ariz., a small desert town 60 miles from the Mexico border, offering a deal.

Glenn Nichols, the Benson city manager, remembers the pitch.

"The gentleman that's the main thrust of this thing has a huge turquoise ring on his finger," Nichols said. "He's a great big huge guy and I equated him to a car salesman."

What he was selling was a prison for women and children who were illegal immigrants.

"They talk [about] how positive this was going to be for the community," Nichols said, "the amount of money that we would realize from each prisoner on a daily rate."

But Nichols wasn't buying. He asked them how would they possibly keep a prison full for years — decades even — with illegal immigrants?

"They talked like they didn't have any doubt they could fill it," Nichols said.

That's because prison companies like this one had a plan — a new business model to lock up illegal immigrants. And the plan became Arizona's immigration law.

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FROM PHYSORG

Analyzing almost 10 million tweets, research finds public mood can predict Dow days in advance


Researchers at IU Bloomington's School of Informatics and Computing found the correlation between the value of the Dow Jones Industrial Average (DJIA) and public sentiment after analyzing more than 9.8 million tweets from 2.7 million users during 10 months in 2008.

Using two mood-tracking tools to analyze the text content of the large-scale collection of Twitter feeds, Associate Professor Johan Bollen and Ph.D. candidate Huina Mao were able to measure variations in public mood and then compare them to closing stock market values.

One tool, OpinionFinder, analyzed the tweets to provide a positive or negative daily time series of public mood. The second tool, Google-Profile of Mood States (GPOMS), measured the mood of tweets in six dimensions: calm, alert, sure, vital, kind, and happy. Together, the two tools provided the researchers with seven public mood time series that could then be set against a similar daily time series of Dow Jones closing values.

The researchers then correlated the two sets of values -- Dow Jones and public mood -- and used a self-organizing network model to test a hypothesis that predicting stock market closing values could be improved by including public mood measurements.

"We were not interested in proposing an optimal Dow Jones prediction model, but rather to assess the effects of including public mood information on the accuracy of the baseline prediction model," Bollen said. "What we found was an accuracy of 87.6 percent in predicting the daily up and down changes in the closing values of the Dow Jones Industrial Average."

By implementing a prediction model called a Self-Organizing Fuzzy Neural Network (SOFFNN) similar to one already used to successfully forecast electrical load needs, the researchers were able to demonstrate that public mood had the ability to significantly improve the accuracy of the most basic models currently in use to predict Dow Jones closing values. Bollen described this particular SOFFNN as a five-layer hybrid neural network with the ability to self-organize its own neurons during a learning process that included information of past Dow Jones and public mood time series values.

"Given the performance increase for a relatively basic model such as the SOFNN, we are hopeful to find equal or better improvements for more sophisticated market models that may in fact include other information derived from news sources and a variety of relevant economic indicators," he said.


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