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Waleed Aly on Paris Attacks, ISIS, Islamophobia

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WALEED Aly has unleashed on Australia’s politicians and Muslim leaders who have preached “hate” in the wake of the Paris attacks saying their actions actually help Islamic State rather than defeat them.

The Project co-host used his regular ‘Something we should talk about’ segment to not only call for solidarity following the atrocity, which left 132 people dead and hundreds more injured, but to highlight what he says is the truth about the militant organisation — that they’re weak.

“There is a reason ISIL still want to appear so powerful, why they don’t want to acknowledge that the land they control has been taken from weak enemies, that they are pinned down by air strikes or that just last weekend they lost a significant part of their territory,” he said on The Project.

“ISIL don’t want you to know they would quickly be crushed if they ever faced a proper Army on a battlefield.

“They want you to fear them. They want you to get angry. They want all of us to become hostile and here is why:

“ISIL’s strategy is to split the world into two camps. It is that black and white. Again we know this because they told us.”

Ally said ISIL wanted to create World War III, and for societies around the world to turn on each other, and for countries like Australia to vilify Muslims.

He said this “evil organisation” believes if they can make Muslims the enemy of the West, then Muslims in France and England and America and here in Australia will have nowhere to turn but to ISIL.

“That was exactly their strategy in Iraq,” he said. “And now they want it to go global.

“Saying that out loud, it is both dumbfounding in its stupidity and bloodcurdling in its barbarity. “We are all feeling a million raging emotions right now. I am angry at these terrorists. I am sickened by the violence and I am crushed for the families that have been left behind, but, you know what, I will not be manipulated.

“We all need to come together. I know how that sounds. I know it is a cliche, but it is also true because it is exactly what ISIL doesn’t want.

“So, if you are a member of Parliament or a has-been member of Parliament preaching hate at a time when what we actually need is more love — you are helping ISIL. They have told us that. If you are a Muslim leader telling your community they have no place here or basically them saying the same thing — you are helping ISIL.

“They have told us that. If you are just someone with a Facebook or Twitter account firing off misguided messages of hate, you are helping ISIL — They have told us that.

“I am pretty sure that right now none of us wants to help these b*stards.”

Aly’s speech was welcomed on social media with many applauding the TV presenter for his measured remarks.

Aly’s comments came after his wife, Susan Carland appeared on Studio 10 to speak about the misconception that the Muslim community supports the Islamic State in the wake of the Paris attacks.

The Muslim sociologist and academic, who converted to Islam at the age of 19, shut down the misguided belief that the 480,000 Australians of the Muslim faith were in any way a “friend” of IS.

“ISIS are no friend to Muslim, by any stretch of the imagination, and so it’s really important that we never fall into the trap of thinking this is about Muslims against other people or anything like this,” Ms Carland said.

This is about a very, very problematic group that is trying to set themselves up against the rest of the world, and to say that all Muslims are with them, nothing could be further from the truth.

“Society tearing itself apart is actually one of the intended outcomes of terrorist attacks done by ISIS; this is what they want. ISIS have openly spoken about wanting to eliminate the grey area; they want a world that is black and white, that is us and them, that is good and evil as far as they define it,” she said.

“A flourishing, pluralistic society is the last thing ISIS want to see and so, in times like this, we all have to make the choice about whether we retreat into fear and anger and blaming or whether we actively choose to come together and say we will not allow this to pull us apart because that is part of the goal. It is a political tactic that is part of their approach and we can never let those be the people who define us as individuals or as a community.”

Source: Waleed Aly on Paris Attacks, ISIS, Islamophobia | The Project

Freeport-McMoRan: A Roller Coaster Ride in November 2015

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Market Realist
By Mark O’Hara

On November 13, 2015, Freeport-McMoRan (FCX) closed at $8.68. Although Freeport’s stock is down more than 25% so far in November, it is still trading ~12% above its 2015 lows. The year has been nothing short of a roller coaster ride for Freeport investors.

part 1

Stocks have been falling

The entire base metals space (XLB) has seen heightened volatility over the last six months or so. However, companies including Freeport-McMoRan, Teck Resources (TCK), and Glencore (GLNCY) have been more volatile as compared to some of their peers in this sector.

Teck Resources has seen its share price dwindle more than 65% this year. Teck Resources is the world’s second largest exporter of steelmaking coal. It is also North America’s largest coal producer, with the annual capacity to produce 28 million tons. Along with falling copper prices, Teck Resources has been hit by the reduced Chinese coal demand.

Freeport is not far behind, and its stock has fallen more than 62% this year. Southern Copper (SCCO) has not fallen much, as can be seen in the graph above. Please read Southern Copper: A Business Overview of a Copper Giant to learn more about SCCO.

Key drivers

There are several factors that would determine how Freeport-McMoRan could trade over the next few months. As Freeport is also involved in the energy exploration business, its stock price could also be guided by movement in energy prices. However, Freeport has announced that the company is looking at several “strategic alternatives” for the energy business, and a final decision has yet to be made.

The key driver, however, would be how copper prices play out in the coming months. In the next part of this series, we’ll explore what analysts think about copper prices.

Copper prices

Copper prices resumed their downside in November after remaining relatively strong in October. On November 13, 2015, the LME (London Metals Exchange) three-month copper contract closed at $4,810 per metric ton, losing more than 1% from the previous day’s closing.

So far in November, the LME three-month copper contract has lost ~6% and joined the ranks of other metals, including steel and aluminum, to hit fresh 2015 lows. The graph below shows the recent movement in copper prices.

How low can it get?

Goldman Sachs had earlier given a target of $4,800 per ton for copper by the end of December 2015. However, according to an October 8 Reuters report citing Max Layton, the head of European commodities research for Goldman Sachs, copper could even fall below $4,000 per metric ton.

A November 12, 2015, Reuters’ article, cited Axel Rudolph, technical analyst at London-based Commerzbank, who noted, “Copper is likely to extend losses in coming weeks to $4,397.”

Bears are back

Bears, it seems, are back full throttle in copper. The bearish sentiments surrounding copper faded somewhat a few weeks ago on supply cuts from Freeport-McMoRan (FCX) and Glencore (GLNCY). However, the goodwill failed to last beyond a month, and copper prices have resumed their downside.

While FCX and GLNCY have announced production cutbacks, diversified miners such as Rio Tinto (RIO) and BHP Billiton (BHP) don’t plan to cut their copper production. Both companies are among the low-cost copper producers, so it would make economic sense for these companies to keep mining copper from their mines.

Meanwhile, the concern has again shifted to the demand side of the equation. In the last week or so, there has been quite a bit of negative data from China, whether it is monthly trade data or credit activity. Pessimistic Chinese data is weighing heavily on copper prices. A stronger US dollar (UUP), on expectations of a possible Federal rate hike in December, is not helping copper’s cause, either.

Falling copper prices

As seen in the previous part of this series, copper prices have crashed to a fresh six-and-a-half-year low on concerns over the Chinese economy and a stronger US dollar. However, unlike other pure-play copper producers like Turquoise Hill Resources (TRQ) and Southern Copper (SCCO), Freeport-McMoRan’s (FCX) worries extend beyond falling copper prices. Together, Freeport and Newmont Mining (NEM) form ~4.1% of the Materials Select Sector SPDR ETF (XLB).

 

Lower energy prices

Freeport-McMoRan is also involved in the energy exploration business. In 3Q15, the company sold 1.0 billion pounds of copper, 23 million pounds of molybdenum, 13.8 MMBOE (or million barrels of oil equivalent), and 294,000 ounces of gold. Freeport has given a guidance of 13.3 MMBOE for 4Q15.

Energy exposure makes Freeport’s earnings sensitive to falling crude oil prices as well. The company’s energy operations generated an EBITDA (earnings before interest, taxes, depreciation, and amortization) of $0.3 billion in 3Q15. This is roughly one-third of Freeport’s 3Q15 consolidated EBITDA.

Sensitivity

According to Freeport-McMoRan, the company expects its 2016 EBITDA to fall by $215 million for every $5 per barrel fall in Brent oil prices. The company also expects its operating cash flows to be lower by $170 million for every $5 per barrel fall in Brent. Please note that the sensitivity is based only on the energy operations and does not account for diesel costs in Freeport’s copper operations.

Brent oil prices have fallen in the last couple of weeks, as can be seen in the graph above. Falling energy prices could weigh heavily on Freeport’s 4Q15 earnings.

Freeport noted that it is looking at “strategic alternatives” for its energy business. However, falling crude oil prices have only made things worse for Freeport’s plans.

Icahn lift

Freeport-McMoRan (FCX) jumped smartly in August after activist investor Carl Icahn disclosed his 8.5% stake in the company. Known as the “Icahn lift,” this phenomenon sometimes occurs after Icahn buys a stake in a company. The activist investor has a reputation for encouraging company management to make decisions that he perceives to be in the investors’ best interests.

part 3

Recent developments

The graph above shows some of the recent developments in Freeport-McMoRan after Icahn disclosed his stake. Currently, the activist investor holds two seats on Freeport’s board. In his statement following his representation on Freeport’s board, Icahn cited examples of companies like eBay (EBAY), Mentor Graphics (MENT), and Herbalife, whose “shareholder value has been greatly enhanced” after he won board representation.

Would it help?

To be fair, there’s not much that either Icahn or Freeport-McMoRan’s management can do when commodity prices are hovering at multiyear lows. For its part, the company has taken several aggressive measures, including mine closures and capital expenditure cuts. However, these can only help lessen the pain from falling commodity prices (COMT) (DBB).

Unfortunately for Freeport, even if it breaks off its energy assets, it would not be a smooth ride. Even Freeport’s core copper business is going through a rough patch on the back of a Chinese slowdown. To add to that, Freeport has a surging debt pile of $20.7 billion as of September 30, 2015. Freeport was looking to cut its debt next year. However, a continued slowdown in commodity prices could continue to pose challenges for Freeport’s optimistic 2016 plans.

Please read Freeport-McMoRan: Why the Current Rally Could be Unsustainable to learn more about the company’s outlook.

You can also visit Market Realist’s Copper page for the other recent developments in this industry.

Source: Freeport-McMoRan: A Roller Coaster Ride in November 2015 – Yahoo Finance