Saudi Arabia and Russia agree to freeze oil production (and what it means for the world)

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Saudi Arabia and Russia agree to freeze oil production (and what it means for the world)

Saudi Arabia and Russia have agreed to freeze oil output in a meeting in Qatar. Ali al-Naimi, the Saudi Arabian oil minister met with Alexander Novakin Doha, his Russian counterpart, and representatives from Venezuela and Qatar in Doha on Tuesday where they agreed a freeze in the oil production at January levels.

“Freezing now at the January level is adequate for the market,” said Saudi Arabian Oil Minister, Ali al-Naimi.

“We don’t want significant gyrations in prices, we want to meet demand. We want a stable oil price.”

The agreement fell short of cutting production to shore up oil prices.


The price of brent crude surged 6 per cent on Tuesday to trade at $35.22 a barrel in anticipation of an agreement.

It slipped back from earlier gains after the announcement was made, reflecting disappointment that production would not be reduced. Many oil producers are already pumping at full capacity.

Oil has lost more than 70 per cent of its value in 18 months, wreaking havoc on the oil-dependent economies such as Saudi Arabia, which has been forced to make sweeping welfare cuts.

The kingdom insisted it wouldn’t curb production unless other producers in the Organization of Petroleum Exporting Countries agreed to co-operate.

Saudi Arabia has one of the most oil reliant economies in the world, as shown by the above Statista infographic. King Salman said in a speech that the kingdom would seek to diversify its revenues in 2016.

Venezuela has been hit hardest from low oil prices. It had lobbied exporters including Russia, Iran and Saudi Arabia to arrange a meeting with OPEC to try and reach an agreement.

The deal is a huge turnaround from OPEC’s last meeting in December, when members were said to be hardly talking to one another.

It now depends on the agreement of Iran and Iraq.

The nations will meet for further talks on Wednesday, but analysts suspect Iran will be reluctant to freeze production because it has only just returned to the market following the lifting of sanctions.



DEVELOPING NEWS: Richard Dawkins has suffered a stroke.

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DEVELOPING NEWS: Richard Dawkins has suffered a stroke. 

Richard Dawkins has had a stroke on the eve of his tour of Australia and New Zealand.

Management for the 74-year-old author of The God Delusion said he had suffered a “minor stroke” in the UK on Saturday but had already returned home from hospital.

But the health scare has caused him to postpone his tour, his management said in a message passed on to ticket holders on Friday.

“On Saturday night Richard suffered a minor stroke, however he is expected in time to make a full or near full recovery,” the statement said. “He is already at home recuperating.

“This unfortunately means Richard will be unable to make his planned Australian and New Zealand tour. He is very disappointed that he is unable to do so but looks forward to renewing his plans in the not too distant future.”

By Thursday he had recovered enough to use Twitter, plugging a book called God: The Most Unpleasant Character in All Fiction, for which he had written the foreword.

The events were to be centred around his recently published second memoir, Brief Candle in the Dark. It’s his 13th book. His first, The Selfish Gene, published in 1976, has sold more than a million copies. The God Delusion, the 2006 book for which he is now best known, has sold more than three million.

A steadfast critic of religion, who nevertheless recently criticised leading UK cinema chains for refusing to screen an advert featuring the Lord’s Prayer, Dawkins has regularly been named one of Britain’s top public intellectuals.

He also coined the term “meme”, in described in rather loftier tones than its current manifestation as an infinite cascade of sad frogs named Pepe, as a self-replicating unit that transmitted cultural ideas.

Memes, Dawkins told The Guardian in 2013, are “cultural replicators, the cultural equivalent of a gene, the cultural equivalent of DNA,” adding “the internet is a first-class ecology for memes to spread.”


Bernie Sanders talks about religion (and some atheists aren’t happy)

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Bernie Sanders talks about religion (and some atheists aren’t happy)

Presidential hopeful Bernie Sanders dashed the hopes of some atheists when he declared he had “very strong religious and spiritual feelings” at a Democratic town hall.

“It’s a guiding principle in my life, absolutely, it is,” Sanders said Wednesday (Feb. 3) when a New Hampshire voter asked him about his faith. “Everybody practices religion in a different way. To me, I would not be here tonight, I would not be running for president of the United States, if I did not have very strong religious and spiritual feelings.”

The statement came a week after the Vermont senator told The Washington Post he is “not active in any organized religion” but believes in God. That statement prompted a number of pundits — atheist and otherwise —  to describe Sanders as the first “none” to run for president, referring to people who have no religious preference.

“Sanders defines God in a very different way than the way most Americans do, and in fact, a way that would be compatible with nontheistic humanists,” Roy Speckhardt, executive director of the American Humanist Association, told The Huffington Post after Sanders’ interview with The Washington Post appeared.

Lauren Nelson, writing on the popular blog Friendly Atheist one day after the town hall, described Sanders’ response as a “punch to the gut.”

“Here was a candidate who, throughout decades of public service, had always been a staunch advocate for keeping religion out of politics, and he was saying that religion was the reason he was running?!” Nelson wrote. “Sanders, who has in the past indicated that his Judaism was a function of culture instead of belief?! HOW COULD HE BETRAY US?!”

Nelson eventually concluded Sanders’ religion is “empathy” and said she could support that. Other viewers seemed to be equally forgiving, at least on social media.

“Shame that you can’t openly come out as an atheist and still have a chance to get elected,” @bensouthard tweeted during the town hall.

And @MBrothers22 tweeted, “This (is) what an atheist says when they don’t want to offend anyone.”


Saudi Arabia is on the verge of a political and economic crisis.

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Saudi Arabia is on the verge of a political and economic crisis.

Are the Saudis nervous? Very. The royal family feels threats from within the country and without, as the price of oil plunges, the predominantly young population grows restless, and Saudi Arabia’s bitter rival, Shiite Iran, seeks to expand its influence throughout the region. The Saudis were also deeply alarmed by the Arab Spring, which saw long-established regimes crumble; the U.S.’s nuclear deal with Iran; and the rise of ISIS.

Since King Salman took the throne a year ago, Saudi authorities have intensified government repression to a severe degree. New counterterrorism legislation, enacted shortly before he took power, defines terrorism as any act with criminal intent that undermines public order, as well as any “deviant thought” that questions Wahhabism, the fundamentalist sect of Sunni Islam that dominates all aspects of Saudi life.

What is the impact of this law?

Any form of dissent is being prosecuted as a crime. Executions are at a two-decade high, with more than 150 public beheadings in 2015 and 47 in just the first week of this year — including the execution of a prominent Shiite cleric (see below), an act that led Iran to sever diplomatic ties. For urging Saudi society to be more liberal and secular, prominent blogger Raif Badawi was flogged, and his lawyer was jailed for defending him. When the lawyer’s wife complained on Twitter about his arrest, she was jailed, too.

Who’s pushing this crackdown?

A new group of leaders. The House of Saud has been led by elderly sons of modern Saudi Arabia’s founder, Ibn Saud, for many decades. But King Salman, 80, has chosen not to name one of his younger half-brothers as his likely successor. Instead, he appointed his son Mohammed bin Salman al Saud, 30, as deputy crown prince and defense minister — and Mohammed is clearly the real power behind the throne. Unlike the older, U.S.-educated generation, Mohammed went to a Saudi university, has had little exposure to Western culture, and has “a reputation for arrogance and ruthlessness,” says Bruce Riedel of the Brookings Institution.

What has Mohammed done?

The young prince plunged straight into a war in Yemen. “The previous, cautious diplomatic stance of older leaders within the royal family is being replaced by a new, impulsive policy of intervention,” said a report from the German foreign intelligence service BND. Saudi Arabia is locked in a struggle with Iran for primacy in the Middle East. The rise of a Shiite government in Iraq brought that country firmly into the Iranian camp, and Lebanon was already there. The conflict in Syria has become a proxy war between the Assad regime, backed by Iran, and militias funded by the Saudis. So when Shiite Houthi militants toppled the Yemeni government, Mohammed moved in swiftly to prevent his country from being bookended by Shiite powers. Saudi airstrikes have killed thousands of Yemeni civilians, but the prince has been undeterred.

What about domestic policy?

Mohammed says he plans sweeping, market-based economic reforms. For 80 years, the Saudi economy has been based almost entirely on oil revenue. High oil prices brought in enormous wealth, which enables the government to fund a generous welfare state without levying any income tax. Most actual work is done by foreigners — a vast army of nearly nine million immigrants from South Asia and the Middle East who serve some 18 million Saudis. Saudis are employed largely in the bloated public sector, many of them drawing fat salaries for little work. But this model is becoming unsustainable. People under 25 make up more than half the population, and there aren’t enough jobs for them as they reach working age. Worse, the collapse in oil prices — from $115 a barrel in 2014 to under $35 now — means there isn’t enough money flowing in to sustain benefits at such generous levels.

Why not?

In the past, when oil prices have fallen, the Saudis have cut production to raise them. But this time, they’ve kept pumping with abandon. The goal is to preserve Saudi market share by driving higher-cost oil producers — notably the U.S. fracking industry — out of business. But the sharp drop in revenue requires painful cuts to the subsidies and expense accounts that so many Saudis rely on.

How will Saudis react to those cuts?

That’s one of the things worrying the royal family. The Saudi people have long had a tacit agreement with their rulers: In return for a cushy life and generous benefits, they put up with an almost total lack of political freedom or say in their own government. Many Saudis are rich enough to skip off to Bahrain or Dubai for the weekend, where they can drink alcohol and the women can shed their burqas. Most, though, are middle-class, and around one-fifth are actually poor, and if Mohammed makes good on his pledge to replace the free health care with an insurance-based system and partially privatize education, they will suffer. “With a decline in social spending and a reduction in subsidies,” says analyst Alberto Gallo, “comes the risk of rising domestic turmoil.”

The oppressed Shiite minority

The Saudi regime said it executed Shiite cleric Nimr al-Nimr for terrorism, but critics said the real reason was his activism in organizing the Shiite minority and denouncing the House of Saud. Shiites make up 15 percent of the population in Saudi Arabia, and they are strongly discriminated against. They are excluded from the cushy government jobs, and Saudi television and Saudi clerics routinely spread anti-Shiite propaganda. For three years, activists in the oil-rich eastern province of al-Ahsa, abutting Shiite-majority Bahrain, have been protesting, sometimes violently. “You are now standing on top of oil fields that feed the whole world,” Shiite activist Fathil Al Safwani told the BBC. “But we see nothing of it. Poverty, hunger, no honor, no political freedom, we have nothing.” By executing Nimr, the House of Saud sent a clear signal that nothing will change; indeed, even complaining about anti-Shiite discrimination will get you beheaded.



Islamist group Boko Haram burned dozens of children alive in Nigeria.

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Islamist group Boko Haram burned dozens of children alive in Nigeria. 

Members of the radical Islamist group Boko Haram burned dozens of children alive as part of an assault in Nigeria that killed 86 people, a survivor of the attack alleged.

The incident happened Saturday night in the village of Dalori in northeastern Nigeria. Two nearby camps housing 25,000 people who have fled Boko Haram were also attacked.

The Associated Press said it spoke to a survivor who said he watched Boko Haram extremists firebomb huts and heard the screams of children burning to death. Survivor Alamin Bakura told the AP that several of his family members were killed or wounded in the the attack, which lasted for nearly four hours.

A soldier at the scene told the AP that three female suicide bombers blew themselves up as part of the assault, but there was little information about the sequence of events that led to the deaths of the children. USA TODAY was unable to verify the account.

Mohammed Kanar, the area coordinator of Nigeria’s National Emergency Management Agency, said 86 bodies, many of them charred and riddled with bullets, were collected by Sunday afternoon.


Wall Street Says It May Be Forced to Fundamentally Question How Capitalism Is Working.

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Wall Street Says It May Be Forced to Fundamentally Question How Capitalism Is Working.

One of the most heated debates among investors is the question of whether corporate profit margins can maintain their elevated level, or whether they will inevitably revert to mean.

Here’s a quick look at S&P 500-stock index profit margins, for example, going back more than 25 years. They remain high by historical standards.

A new note from Goldman Sachs Group Inc. analysts led by Sumana Manohar looks at the bull and bear arguments for the profit margins debate.

Manohar argued that profit margins have expanded, thanks to four key trends: strong commodities prices, emerging market cost arbitrage (companies making things more cheaply in emerging markets), demand growth from emerging markets, and improved corporate efficiency driven by the use of new technology. Continuing one of its major analytical themes of recent months, Goldman also noted that the market has rewarded companies that have undertaken mergers and share buybacks, as opposed to companies that have invested internally, further bolstering margins.

So will profit margins inevitably roll over?

Goldman went through both sides of the argument. On the bull side, the bank said that ongoing consolidation in industries, cost deflation, and tighter purse strings help keep a floor under margins. Ultimately though, it found that the above trends, coupled with weak demand and general industrial overcapacity, mean that margins are likely to come down.

But what if margins stay elevated? That too is possible, and its implications could be unsettling.

Goldman wrote: “We are always wary of guiding for mean reversion. But, if we are wrong and high margins manage to endure for the next few years (particularly when global demand growth is below trend), there are broader questions to be asked about the efficacy of capitalism.”

In other words, profit margins should naturally mean-revert and oscillate. The existence of fat margins should encourage new competitors and pricing cycles that cause those margins to erode; conversely, at the bottom of the cycle, low margins should lead to weaker players exiting the business and giving stronger companies more breathing space. If that cycle doesn’t continue, something strange is taking place.

Needless to say, it’s not every day you see a major investment bank say it might have to start asking broader questions about capitalism itself.


Facebook bans private guns sales.

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Facebook bans private guns sales.

Facebook is banning private guns sales on the social media site in response to pressure from President Barack Obama for stricter firearms control.

The prohibition, announced on Friday, will also apply to Instagram, its photo-sharing network, and will stop the networks being used to conduct gun sales between private individuals.

The new rule comes after President Obama bypassed the United States congress by introducing a series of executive orders bringing in tougher background checks for gun ownership in response to a series of deadly mass shootings during his presidency.

The changes announced by Mr Obama in a tearful speech at the White House included requirements for checks for those purchasing weapons at gun shows or on the internet.

The White House, state attorneys general and pro-gun control groups have raised the pressure on Facebook to stop the flow of posts offering weapons for sale.

“Over the last two years, more and more people have been using Facebook to discover products and to buy and sell things to one another,” said Monika Bickert, Facebook’s head of product policy. “We are continuing to develop, test and launch new products to make this experience even better for people and are updating our regulated goods policies to reflect this evolution.”

The ban would apply only to posts relating to “peer-to-peer” sales, not to those taking place in stores or from licensed on-line dealers. “Licensed firearm retailers will still be able to post about their goods and services on Facebook while completing sales transactions off Facebook,” Ms Bickert said.

Facebook, with 1.59 billion monthly users, acted in 2014 to limit gun sales by shielding minors from firearms adverts on its site.

The network already bans sales of pharmaceuticals, marijuana and other illicit drugs.