Five people escaped from a cafe in downtown Sydney where at least one armed person held an undisclosed number of hostages, Monday.
New South Wales Police Deputy Commissioner Catherine Burn confirmed to the Associated Press that three people "emerged from the location" more than six hours after the hostage crisis began.
About an hour later, two women wearing aprons with the Lindt chocolate logo fled the Lindt Chocolat Cafe into the arms of heavily armed police officers.
"The first thing that we are doing is making sure that they are OK. We will then establish who they are and then we will continue to work with them," Burn said.
Burn said police had made contact with the gunman. Police have asked that media outlets do not report the gunman's demands, the Sydney Morning Herald reported.
A flag with Arabic script was displayed through the cafe window and Australian Prime Minister Tony Abbott said the events may be "politically motivated.''
The standoff gripped downtown Sydney, shutting down government offices, public transit and schools as it dragged through the day.
New South Wales Police Commissioner Andrew Scipione said at an afternoon news conference that "an undisclosed number of hostages'' were being held by "an armed offender.'' Some media reports said 13 people were being held hostage, but there were conflicting reports of larger numbers.
The normally busy and crowded business district of the city was on virtual lockdown, with hundreds of officers on the scene.
Television and still images from the scene showed several people inside the cafe holding their hands up in the air, pressed against windows, with a visible black flag bearing what appeared to be Arabic script.
"We do not know the motivation of the perpetrator,'' Abbott said in a televised address. He called it "very disturbing.''
The gunman has used hostages to call media to make demands, which Australian police have asked not be published. References to the demands earlier included in this report have been removed.
As the drama dragged into its 10th hour, police Deputy Commissioner Catherine Burn said negotiators were talking with the gunman. Officials had no information to suggest anyone had been harmed.
Burn told media that police were treating the situation as a hostage negotiation and working to conclude it peacefully.
“There is speculation about what he might want but we have to deal with him at the level of police negotiation,” Burn said.
Police also said they are operating on a terror footing.
Seven Network TV news staff members watched the gunman and hostages for hours from a fourth-floor window of their Sydney offices, opposite the cafe.
“Just two hours ago when we saw that rush of escapees, we could see from up here in this vantage point the gunman got extremely agitated as he realized those five had got out. He started screaming orders at the people, the hostages who remain behind,” he added.
Australia’s New South Wales Police Commissioner Andrew Scipione confirmed that police were on a terror footing and they they were not ruling out that it could be an ongoing terror attack.
New South Wales’ Premier Mike Baird said that Australians were “being tested today in Sydney. The police is being tested, the public is tested. Whatever the test, we will face it head on. We will remain a democratic, civil society.”
This week, oil fell through the price floor of $60 a barrel and gas at my local filling station was $2.26 a gallon.
That’s great news for commuters and almost every business, but wonderfully bad news for our ugliest enemies.
If oil prices remain low through next year, the effect on rogue governments, from the Russian Federation to Venezuela, will go from damaging to devastating.
But Western economies (and China’s) stand to benefit, with cheap oil possibly tickling Europe’s snoozing markets awake. Even most underdeveloped states will get a welcome break.
This price plunge has been driven by Saudi Arabia, OPEC’s dominant power. While it’s true that part of Riyadh’s actions respond to the energy renaissance in North America, the greater motivation is breaking Iran’s will.
The Saudis believe they can no longer rely on the US to contain Tehran’s imminent nuclear threat, so they’re out to do what our lukewarm sanctions couldn’t.
There’s no love lost between the Saudis and the Russians, either. The Saudis want the Assad regime in Syria to go. Moscow props it up.
The Saudis aren’t doing any of this to help us, but it helps us just the same. Now the key issue is: How long will prices stay low?
Markets can be unpredictable, but an emerging global glut of oil, decreasing demand and greater efficiencies suggest that petroleum products should remain relatively cheap — with fluctuations — for the next few years.
That’s good news for democracies and free markets, but a nightmare for dictators everywhere.
Here are the key losers — and winners.
The Targets
Iran
Tehran had learned to live with Western sanctions. But oil has been its lifeline. And to balance the books, oil has to sell between $135 and $140 dollars per barrel. Good luck with that, Supreme Leader!
With the barrel price at barely 40 percent of Iran’s requirement, the economy’s going to hemorrhage. Iran’s leaders will be under far greater pressure to compromise on the nuclear weapons — unless we keep easing sanctions for nothing in return. This is the last chance for negotiations to bring results.
The fascinating angle here is that Saudi Arabia’s doing more for Israel’s security than the Obama administration’s been willing to do. Common enemies generate unexpected — if unadmitted — alliances.
Russia
The price collapse could not have come at a worse time for Bad Vlad Putin. The Russian president needs an oil price around $100 a barrel to prop up what’s become a wartime economy.
Oil and gas provide up to a third of budget revenue and compose two-thirds of exports.
Sanctions imposed over Putin’s aggression have gnawed at Russia’s economy, but this price drop bites deep: The ruble has crashed, Russian bonds are pathetic, and foreign reserves are bleeding.
While Russians will put up with harder times than Westerners will, Putin’s made extravagant commitments (bet he’d like to have back the $50 billion he squandered on corrupt Olympic construction).
The world’s fave bare-chested bully had embarked on a massive arms buildup, with a hi-tech $5 billion command center just unveiled. But Putin’s visions of military resurgence are becoming unaffordable
He also made election promises to improve Russia’s wretched health-care system. Instead, he’s firing health-care workers and shuttering hospitals.
He promised higher living standards, but now the average Ivan’s feeling squeezed. And Putin faces enormous costs in Crimea and eastern Ukraine, two booby-prize welfare states, with the latter shot to ruins.
Putin’s popularity remains high. For now. The gravest worry is that, with his back to the wall, he’ll play the Mother Russia card and attack again.
Iraq
Iraq has nothing to offer the world but oil. And Baghdad needs to fund a survival struggle against Islamic State militants.
The Saudis don’t like the Islamic State caliphate claims, but they have no sympathy with Baghdad’s Shia-dominated, Iran-aligned government, either. Don’t expect price rises for Iraq’s sake.
The problem is that we’ll end up paying more of the battle bill for Baghdad’s pretense (and our State Department’s fetish) that Iraq can be kept intact. The conquests made by Islamic State terror
In space, no one can hear you scream... unless you happen to be Venezuela's (soon to be former) leader Nicolas Maduro, who has been doing a lot of screaming this morning following news that UAE's Energy Minister Suhail Al-Mazrouei said OPEC will stand by its decision not to cut crude output "even if oil prices fall as low as $40 a barrel" and will wait at least three months before considering an emergency meeting.
In doing so, OPEC not only confirms that the once mighty cartel is essentially non-existant and has been replaced by the veto vote of the lowest-cost exporters (again, sorry Maduro), but that all those energy hedge funds (and not only) who hoped that by allowing margin calls to go straight to voicemail on Friday afternoon, their troubles would go away because of some magical intervention by OPEC over the weekend, are about to have a very unpleasant Monday, now that the next oil price bogey has been set: $40 per barrell.
Luckily, this will be so "unambiguously good" for the US consumer, it should surely offset the epic capex destruction that is about to be unleashed on America's shale patch, in junk bond hedge funds around the globe, and as millions of high-paying jobs created as a result of the shale miracle are pink slipped.
Is this the start of the next major financial crisis? The nightmarish collapse of the price of oil is creating panic in financial markets all over the planet. On June 16th, U.S. oil was trading at a price of $107.52. Since then, it has fallen by almost 50 dollars in less than 6 months. This has only happened one other time in our history. In the summer of 2008, the price of oil utterly collapsed and we all remember what happened after that. Well, the same patterns that we witnessed back in 2008 are happening again. As the price of oil crashed in 2008, so did prices for a whole host of other commodities. That is happening again. Once commodities started crashing, the market for junk bonds started to implode. That is also happening again. Finally, toward the end of 2008, we witnessed a horrifying stock market crash. Could we be on the verge of another major one? Last week was the worst week for the Dow in more than three years, and stock markets all over the world are crashing right now. Bad financial news continues to roll in from the four corners of the globe on an almost hourly basis. Have we finally reached the “tipping point” that so many have been warning about?
What we witnessed last week is being described as “a bloodbath” that was truly global in scope. The following is how Zero Hedgesummarized the carnage…
- WTI’s 2nd worst week in over 3 years (down 10 of last 11 weeks)
- Dow’s worst worst week in 3 years
- Financials worst week in 2 months
- Materials worst week since Sept 2011
- VIX’s Biggest week since Sept 2011
- Gold’s best week in 6 months
- Silver’s last 2 weeks are best in 6 months
- HY Credit’s worst 2 weeks since May 2012
- IG Credit’s worst week in 2 months
- 10Y Yield’s best week since June 2012
- US Oil Rig Count worst week in 2 years
- The USDollar’s worst week since July 2013
- USDJPY’s worst week since June 2013
- Portugal Bonds worst week since July 2011
- Greek stocks worst week since 1987
And it isn’t just Greece. Financial markets all over Europe are in turmoil right now.
As a result of all of this fear, European stocks also had their worst week in over three years…
European stock markets closed sharply lower on Friday, posting their biggest weekly loss since August 2011, as commodity prices continued to fall and and shares in oil-related firms came under renewed pressure from the weak price for crude.
The pan-European FTSEurofirst 300 unofficially ended 2.6 percent lower, down 5.9 percent on the week as the energy sector once again weighed heavily on wider benchmarks, falling over 3 percent.
But despite all of the carnage that we witnessed in the U.S. and in Europe last week, things are actually far worse for financial markets in the Middle East.
Just check out what happened on the other side of the planet on Sunday…
Stock markets in the Persian Gulf got drilled Sunday as worries about further price declines grew. The Dubai stock index fell 7.6% Sunday, the equivalent of a 1,313-point plunge in the Dow Jones industrial average. The Saudi Arabian market fell 3.3%.
Overall, Dubai stocks are down a whopping 23 percent over the last two weeks, and full-blown stock market crashes are happening in Qatar and Kuwait too.
Like I said, this is turning out to be a truly global financial panic.
Another region to keep an eye on is South America. Argentina is a financial basket case, the Brazilian stock market is tanking big time, and the implied probability of default on Venezuelan debt is now up to 93 percent…
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