Category: zerohedge

Authored by Simon Watkins via OilPrice.com,

Over the past week or so, China has eased quarantine measures in Wuhan – the city in which the global coronavirus pandemic began – with the entire lockdown scheduled to end on 8 April. With China’s President Xi Jinpiang having visited the city just a few days ago, the industrial economy across China as a whole is back working and operating at levels even above the pre-coronavirus rates, although the service sector remains more cautious.

For the oil industry, this means that China is back and busy taking up where it left off in terms of exploring and developing new field opportunities.

This is at a time when the U.S. is just beginning to see the full onset of coronavirus mayhem.

There has been no clearer sign of this move by China than last week’s awarding of a US$203.5 million engineering contract for Iraq’s supergiant oil field, Majnoon, to the little known China Petroleum Engineering & Construction Corp (CPECC). 

With the U.S.’ focus increasingly on fire-fighting the coronavirus outbreak at home, Beijing has good reason to believe that it has largely a clear run at target country Iraq, provided that it does not stick it too much in the U.S.’ craw. This specifically means continuing to develop oil and gas field opportunities in geopolitically ultra-sensitive areas, such as Iraq, on the basis of rolling contracts for specific work undertaken by companies that are not top of the U.S.’ radar, like CPECC.

This method is also being used by Russia, and the focus of it right now is Iraq and Iran, two countries that are right in the centre of the Middle East and vital to both China’s ‘One Belt, One Road’ multi-generational dominance strategy and to Russia’s ongoing attempt to sequestrate the entire Middle East.

Majnoon is a key focus in Iraq because it has so much oil that its very name in Arabic means ‘insane’, to signify the insane amount of oil that has always been present there. Before the U.S. noticed that China was stealthily acting hand in glove with Russia to provide the money where the muscle had been put in place, the ever-fractious senior Iraqi politicians had offered China a stunningly lucrative deal for the development of the Majnoon field. Specifically, the terms of the deal were that China would obtain a 25-year contract but one that would officially start two years after the signing date. This would allow China to recoup more profits on average per year and less upfront investment.

Also enormously beneficial for Beijing was that the methodology for working out per barrel payments to it would be the higher – the Chinese would choose – of either the mean average of the 18 month spot price for crude oil produced, or the past six months. Additionally, China would receive a discount of at least 10 per cent for at least five years on the value of the oil it recovered.

And oil there is aplenty. Located around 60 kilometres to the north east of the main southern export terminal of Basra, the Majnoon supergiant oil field is one of the largest oil fields in the world, with an estimated 38 billion barrels of oil in place. Due to the legacy of both the Iran-Iraq War and the U.S. incursions, from when the licence on the field was awarded on 11 December 2009 by the Iraq government to Shell Iraq Petroleum Development (SIPD) – in conjunction with its Malaysian partner, Petronas, and Iraq’s Missan Oil Company – it took nearly 18 months simply to clear 28 square kilometres of land of explosives, prior to constructing and opening the first well. Production was then formally restarted on 20 September 2013 and, within a very short timeframe, the consortium had already managed to boost output to the 175,000 barrels per day (bpd) first commercial production target (also the threshold for cost-recovery payments for Shell). 

By the end of the first quarter of 2014, the field was churning out an average of 210,000 bpd, according to figures from Shell and Baghdad. Indeed, the first shipment of crude oil to Shell Trading occurred on 8 April that year and, despite the floods that hit the fields in early 2019, the longer-term original production target figures designed for the Shell-led consortium still stand: the first production target of 175,000 bpd (already reached and surpassed), and the plateau production for the site of 1.8 mbpd. 

The International Energy Agency projected output of 550,000-950,000 bpd production by 2020, and 700,000-1 million bpd at some point in the 2030s, although due to the flooding and recent political upheavals – plus the effects of the coronavirus – the timing has slipped. Even with these caveats, though, China’s part of the deal – which also remains in place – is to shore up the site from future potential flooding and to increase output to at least 500,000 bpd by the end of May 2021. 

The details of the early 2019 flooding damage might make worrying reading for some developers. The rain that caused the initial flooding had only fallen on both sides of the Iraq/Iran border for just 35 minutes in total, which then caused the Hiwiza marshes to overflow into farmland in the nearby Al-Qurna district, cutting through the safety berms and the rising level of water caused the Jahaf dam to collapse. By 15 March, the water level rose sufficiently to force itself through a second safety berm to the edges of the Majnoon oil field. 

The details do not worry the Chinese, though, for two key reasons.

• One is that China has extensive knowledge of dealing with floods across its own country, both natural and man-created (via the damming that has occurred for decades), so it has the expertise and engineering capabilities to effectively deal with such eventualities.

• The other is that, in line with its aforementioned encroachment into Iran, China can work on both sides of the border, as the Majnoon reservoir in the Iraqi side extends across the Iran border into the massive field known as Azadegan. This, in turn, is split into the North Azadegan and South Azadegan oil field developments.

For years, structural damage has been done to the area by the erosion of subsoil across over one million hectares of forest and brush land by the Islamic Revolutionary Guard Corps (IRGC) as a result of building programmes. This has been worsened by the redirection of many of the natural water flows through the building of dams and again by Iran’s irrigation systems that have been sending clean and waste water into Iraq for decades.

A 2011 study by the University of Basra warned that the infrastructure was not able to handle Iranian inflows, with the danger zone concentrated in an area where the Majnoon oil pipelines feed the gas-oil separation station. However, as a senior source who works closely with Iran’s Petroleum Ministry told OilPrice.com last week: “The IRGC invited China into Iran and Iraq and the IRGC is entirely at China’s service.”  

This strategy of gradual encroachment is a Chinese classic, of course, currently being employed very notably where possible across the Asia-Pacific region as well as the Middle East. The modus operandi is:

offer lots of money to cash-strapped countries (which most emerging economies are) that are tied in to future project developments, then leverage this into the building out of on-the-ground infrastructural projects (that have employment and revenue benefits for the host countries as well), and then turn the screw by inveigling the host countries to give China extremely preferential terms on something it wants (in the Middle East it is oil and gas and land transit routes, and in Asia Pacific it is other natural resources and international port usage).

Although in the Middle East, China is still partly trying to cover its intentions by using non-headline companies on ‘contractor-only’ specific work projects – just like CPECC – it does not take much digging to find the real interest. 

Not only is CPECC a subsidiary of Chinese oil behemoth, China National Petroleum Corporation (CNPC), but also it was the very same company that was recently awarded exactly the same type of contract (US$121 million for ‘engineering work’ that time) for Iraq’s supergiant West Qurna-1 oilfield, also located very close to Iraq’s principal oil hub of Basra.

“At some point the U.S. is going to wake up and find out that it has lost the entire Middle East, including Iraq and Saudi,” concluded the Iran source. 

As most people following the Tesla saga already know, the company reported 88,000 deliveries for Q1 on Thursday night, leading many people to think that the company had “beat” estimates. Tesla stock soared after hours on Thursday, at one point rising almost $90 from the prior close, before returning to some semblance of reality on Friday and closing the week out around $480, up 5% on the day.

But as analyst Gordon Johnson reminds us in his latest report, these delivery estimate numbers had already been significantly walked back. He also reminded anyone willing to listen of the drastic measures Tesla has taken to increase supply:

After walking analysts ests. down (our opinion) from ~93K on Fri. to ~80K this past Monday and ~105K for the Cons. est. just two weeks ago, TSLA reported 1Q20 deliveries yesterday (i.e., Thurs) of 88.4K, leading many to claim victory, with some even saying TSLA “crushed” the 1Q20 delivery est. (link). While the stock is up in pre-market trading, at risk of stating the obvious, we disagree with the optimism being lauded on the car company today by many media outlets, & sell-side analysts alike.

More importantly, however, over the course of 3Q18-to-1Q20, we note that TSLA: (1) Launched a New Factory in China, which is said to be producing 3K cars/week, or ~36K cars/quarter (link), (2) Completed rollout of Model 3 AWD/AWD-P in N. America, (3) Launched Model 3 MR (Since Discounted), (4) Launched Model 3 SR+, (5) Launched Model 3 in Europe/UK (All Variants), (6) Launched Model 3 in China/SEA (All Variants), and (7) Launched Model Y AWD/AWD-P in the United States. 

He made the argument that even though the China factory was up and running for most of Q1 and even though the Model Y was available for purchase, the company still posted a lackluster number for deliveries, up just 5.5%. He notes that it is the “second lowest level of TSLA cars sold over the past 6 quarters” and says compared to VW, Tesla’s valuation remains unjustified: 

Yet, as detailed in Ex. 1 below, over this same timeframe, despite its China factory being fully functional for the lion’s share of 1Q20 & its Model Y all-wheel-drive (“AWD”) and Model Y all-wheel-drive-performance (“AWD-P”) cars being available for purchase, as well as the introduction of >6 other new car variants 3Q18-to-1Q20, TSLA’s total cars sold grew from 83.7K to just 88.4K 3Q18-to-1Q20, or up 5.5%.

In fact, 1Q20 marks the second lowest level of TSLA cars sold over the past 6 quarters.

Consequently, with TSLA currently valued at ~$98bn vs. $59.5bn for VW, despite the fact that VW sold ~10.5mn cars last year vs. 367.5K for TSLA, TSLA needs to see exponential growth to justify its valuation.

Johnson also reminded people that Tesla’s battery range is “not what it seems”, even sourcing pro-Tesla website InsideEVs for his data.

Finally, Johnson explained that consensus estimates for 2021 have already started to come down and that the revisions have “nothing to do with COVID-19”. 

Based on the lion’s share of TSLA pundits saying demand will surge in 4Q20/2021, we think it’s fair to say any impact from COVID-19 is expected to be fully behind TSLA by 1Q21. Despite this, however, as detailed in Ex. 2 below, since 2/13/20 the Cons. 2021 adjusted EPS est. for TSLA has fallen from $15.23/shr to $12.18/shr, or -20%. When considering this is the est. professional investors use to value TSLA shares, as this figure moves lower thru 2020, we would expect TSLA’s share[s] to come under more intense selling pressure.

“Numbers don’t lie, and, as we’ve stressed, TSLA has a bulging demand problem,” Johnson concluded.

Via AdvisorPerspectives.com,

The following letter was sent by Bob Rodriguez to his friends and colleagues yesterday, as well as to Bob Huebscher. Bob Rodriguez has graciously allowed us to publish it.

Robert L. Rodriguez was the former portfolio manager of the small/mid-cap absolute-value strategy (including FPA Capital Fund, Inc.) and the absolute-fixed-income strategy (including FPA New Income, Inc.) and a former managing partner at FPA, a Los Angeles-based asset manager. He retired at the end of 2016, following more than 33 years of service.

He won many awards during his tenure. He was the only fund manager in the United States to win the Morningstar Manager of the Year award for both an equity and a fixed income fund and is tied with one other portfolio manager as having won the most awards. In 1994 Bob won for both FPA Capital and FPA New Income, and in 2001 and 2008 for FPA New Income.

The opinions expressed reflect Mr. Rodriguez’ personal views only and not those of FPA.

Dear friends and colleagues,

Though the virus pandemic has been tumultuous, challenging and with little precedence, from a capital market perspective, this market collapse was quite predictable.

Capital market excesses became pervasive in ways that were also unprecedented. Zombie companies, corporate operating strategies that elevated financial risk to extreme levels and consumers who also became highly leveraged were the accepted actions of the day. Prudence was an extremely rare virtue. Many times I expressed the opinion that I thought the various equity markets were at least 40-60% over valued. Recent events would tend to confirm my assessment.

Back in 2009, in my Morningstar speech, and then after I returned from my 2010 sabbatical, I argued that, if we did not get our economic house in order, we would experience a crisis of equal or greater magnitude than the 2008-2009 period and that this would take place after 2017.

With the passage of the 2017 omnibus bill and the 2017 tax cut, along with a continuation of unsound and insane monetary policies, this speculative excess period was able to be extended. We knew there would be a pin that would prick this unbelievably speculative bubble but we just didn’t know what it would be. Now we do.

Our economic and financial market systems were not prepared with appropriate “rainy day reserves” to withstand an exogenous shock. Balance sheets were stretched in all economic sectors. The shock to the US economy by the bombing of Pearl Harbor and the beginning of WW2 was more traumatic and of greater magnitude than what we are experiencing now and it would also last longer. However, after 12 years of Depression, the financial system was cleansed of speculative excesses that allowed for a financial re-leveraging of the economy to fight the war. After the carnage was over, the economy was able to grow out of an extreme leverage position. In contrast to then, this is not the case today, given that the economy is already extremely leveraged prior to the onset of the crisis. My worst fears have materialized.

Since 2013, I have been preparing for an economy of monumental excess, where debt and deficits do not appear to matter, along with Fed and other central bank monetary policies that totally distort the fundamental elements of the Capital Asset Pricing Model. With the events of the past three weeks, the perversion and conversion to a dystopian capital market and economic system is virtually complete.

As for me, with the Fed’s announcement of unlimited QE and its “will buy or support almost anything,” along with the pending passage of a $2-2.5 trillion stimulus package, this is the end of the capital markets as we have known them.

We have now entered unlimited QE and MMT where there is no escape.

It is the Roach Motel all over again.

In Chairman Bernanke‘s 2010 Washington Post op-ed, he argued that QE would lead to a virtuous economic cycle; therefore, the Fed would eventually be able to exit from its QE operations. I argued that once initiated, a reversal would be impossible. It would be like the Roach Motel, “You can check in, but you cannot check out.”

With the initiation of the Fed’s complete takeover and control of the US financial economy, there is now absolutely no accurate pricing discovery in the capital markets and we have entered a period of total manipulation. In light of this, the only markets I have an interest in are those where the heavy hand of government is not involved or only minimally involved. This leads me to rare commodities and collectibles. The public equity and debt markets are now nothing more than greater fool markets that are led by the greatest fools of all, the Fed and the Congress. US capital markets, RIP!

Despite my having avoided 100% of the market carnage and also being profitable, I have to shed a tear for the passing of a capital market that has benefitted the real and financial economy so well for decades. In 2008, when I wrote, “Crossing the Rubicon,” I argued we had crossed over into a new economic order and system. Little did I know that within twelve short years this transformation would be virtually complete. We have entered into a far more dangerous environment where normal rules of analytics will likely not apply.

When everything is essentially socialized as to risk, a return vs risk evaluation is essentially meaningless since the risk side of the equation has been truncated.

Over a period of time which I cannot estimate yet, I will continue my preparation for a far different economic and financial environment.

Capital deployment strategies will likely have to change from what has been the norm in the post WW2 environment. We are in a New World Order.

I hope I am wrong in my assessment, but I doubt it.

Good luck,

Bob

The cruise ship-outbreak “Nightmare at Sea” has by now become a familiar trope to many of those following the coronavirus pandemic gripping the world. But  although dozens of ships operated by nearly all of the major cruise lines (and their many subsidiaries) have experienced outbreaks onboard, one cruise line stands out as a symbol for the calamities that unfolded on its ships, some of which became floating international incidents.

That company, of course, is Carnival. Not only is it the owner of the Princess Cruise subsidiary, which is responsible for the “Diamond Princess” fiasco in Japan, the “Grand Princess” in California, and, most recently the Coral Princess, Another lethal outbreak unfolded aboard the Zandaam which docked in Ft. Lauderdale earlier this week. That ship is owned by another Carnival subsidiary, Holland America. After being turned away by more than a dozen countries, somehow, that ship, too, became America’s problem.

As cruise ships continued to contribute to the spread of the virus, and their management continued to appear confused, overwhelmed or downright negligent in responding to these floating fiascos, we started to suspect that the issue would soon become a criminal matter, somewhere, perhaps notoriously punitive Japan.

But Australian authorities managed to strike first. As the BBC reports, a criminal investigation has been launched in Australia into how passengers traveling aboard the “Ruby Princess” were allowed to disembark in Sydney even though some clearly exhibited flu-like symptoms.

Eventually, some 600 passengers tested positive for COVID-19; 10 of them died. The ship is still sitting off the coast of Australia, with some 200 passengers aboard. It has become a terrible political headache for PM Scott Morrison at a time when he needs to focus on leading his country’s response to the outbreak.

Police in New South Wales said they would look into whether Australia’s national biosecurity laws had been violated. The country has so far reported 5,548 coronavirus cases and 30 deaths. Those sickened on cruise ships account for roughly 10% all cases in Australia.

Data obtained by Bloomberg reveals that dozens of cruise ships continued to sail the globe even after COVID-19 first emerged as a transnational threat in late January/early February. Though the virus’s true infectious potential wasn’t ascertained right away, by mid-February, cruise lines should have been able to read the writing on the wall. And yet, ships continued to launch as late as the first week in March, shortly before Carnival’s Princess Cruises subsidiary finally suspended operations, even as dozens of cruises continued on.

Carnival still has five ships active with passengers aboard, traveling thousands of miles from port. There have been no incidents of coronavirus reported on those ships, at least not yet. MSC Cruises also reported one ship with passengers, while Norwegian and Royal Caribbean report none, per BBG.

Authored by Judith Bergman via The Gatestone Institute,

A new kind of crime is making the headlines in Sweden, in Swedish known as förnedringsrån. Förnedring means “humiliation” and rån means “robbery.” The victims of these “humiliation robberies” are almost always children or teenagers. As previously reported by Gatestone Institute:

“The number of children who rob other children has increased by 100% in only four years, according to a new study by Swedish police… In 2016, there were 1,178 robberies against children under 18 years of age. In 2019, the number had increased to 2,484. The number of violent crimes where the suspect is a child under 15 years of age has also gone up dramatically: In 2015, there were 6,359 reported violent crimes where the suspect was a child under 15. In 2019, that number had increased to 8,719 reported violent crimes”.

The “humiliation robberies” have recently caused much consternation in Sweden. In Gothenburg, a criminal gang of youths forced their victim to kiss the gang leader’s feet, while they filmed him. After that, they stomped on his face until he passed out.

In Stockholm, two 16-year-olds robbed, punched and kicked their 18-year old victim for hours. At the end of the ordeal, they took him behind a church where one of the perpetrators urinated on him while they called him names such as “fucking Swede”. They then forced him to take his clothes of while laughing mockingly at him, the victim, only known as Liam, told Swedish TV. The two 16-year-olds filmed the incident and spread it on social media.

The parents of one of the perpetrators came to Sweden six years ago from an unspecified African country, according to Swedish TV, who interviewed them in February. The parents both work and said that their son lacks for nothing. The mother wore a hijab during the interview.

Although Swedish media rarely publish details of the ethnic origins of gang members, some media research has shown that gang members overwhelmingly are either foreign-born or children of immigrants. In 2017, the Swedish mainstream media outlet Expressen did a report about the 49 criminal networks in Stockholm. The report showed the networks consisted of between 500 and 700 gang members: 40.6% of the gang members that Expressen surveyed were foreign-born; 82.2% had two parents who were foreign-born. Their main country of origin was Iraq, followed by Bosnia, Lebanon, Somalia, Syria and Turkey.

“It is a way to show your power. They want to dominate places. They do that by putting fear in other youths,” said Thomas Petterson, an analyst for the Gothenburg police, in August.

“When it comes to these kinds of young people, they get a kick out of the deed, rather than going after possessions,” said criminal prosecutor Linda Wiking.

However, little is apparently new about this form of crime. The only truly novel aspect of it is that the crime has become extreme to the extent that even Swedish mainstream media can no longer ignore it.

As early as 2007, four academics (Ingrid Björkman, Jan Elfverson, Jonathan Friedman and Åke Wedin) wrote a book, Exit Folkhemssverige (“Exit the Swedish Welfare State”), which received little to no attention in mainstream media at the time. The book contains much information about gang robberies, including the humiliation of the victims that they often entail:

“Since the early 1990s, gang robberies, where young people rob other young people, have been a marked feature of juvenile delinquency. From being a metropolitan phenomenon, the robberies have now spread across the country. Several reports, including an extensive BRÅ survey in 1999 of Malmö and Gothenburg, as well as interviews with police officers, give a coherent picture of the youth robberies. The increase is dramatic. In the Stockholm and Malmö regions, police reported robberies doubled in 1999, and the police are talking about a ‘youth epidemic’. 80 – 90% of robbers have an immigrant background. The majority are 15 – 17 years…The victims are Swedish children and young people, primarily ‘Swedish guys from rich men’s schools’, as one robber put it. The robberies are mostly carried out in the daytime and despite the fact that there are adults nearby. The surroundings rarely intervene… The robberies usually follow a certain pattern: A group of immigrant boys approach a selected victim and convey a clear threat with their actions. A common scenario is that one of the robbers holds a knife pressed against the victim, while the others rob him of mobile phone, bank card, money. The victim… is frightened and dare not [do anything] but give up the requested items… If he doesn’t give up, he’ll be beaten, often very brutally. Humiliation of the victim is not infrequently included in the picture. If it is a boy, it is about breaking his self-esteem. He is forced to cry, give up his shoes, even undress naked, kneel and plead for his life, etc. For the girl victims, sexual humiliation applies. They get their clothes ripped off, the robbers grab them and call them “whores”. However, the robberies are rarely combined with rape. When the girls manage to get away, the robbers laugh out loud and let them run. Even little girls aren’t safe… The gangs have gained respect, as it is called. This means that they have taken over certain neighborhoods, with the result that Swedish young people are restricting their freedom of movement…The teenage perpetrators behave like Mafiosi, police say. The robberies are a demonstration of power. If the robbers are caught, they laugh at the police, because the penalties for the crimes are so insignificant due to the young age of the perpetrators.” (From chapter 5.)

The authors continued:

“The fact that it is a question of showing their power is confirmed by the immigrant youths themselves… ‘The Swedes must become like us foreigners. Otherwise, they won’t make it,’ says one immigrant… ‘You don’t rob your own. And then it becomes immigrants against Swedes’. ‘If you get to know them and pretend to look up to them, then you don’t get robbed,’ explains a Swedish 14-year-old. The defense mechanism is called conscious identity change. A sociological study at the University of Gothenburg by John Järvenpää has dealt in detail with the phenomenon of immigrant youth and robberies…The crucial motive for the choice of victims was ethnic. No one could imagine robbing someone of their own nationality. First, ‘it’s about respect.’ Second, they would be severely punished by their compatriots. ‘I’d get killed,’ says one. ‘The family would have killed us,’ says another. That the robbers focus on Swedes is mainly because Swedes are afraid and therefore easy prey…”

Exit Folkhemssverige also has a section about gang rape, which the authors present as a different kind of humiliation crime:

“Previously, gang rapes were virtually unknown in Sweden. But since the 1980s, they have steadily increased. Since 1995, they have quadrupled. In 1999, 35 gang rapes were recorded in Stockholm alone. Today, the media reports every week or every two weeks on such violent crimes. The usual pattern is the same as in the gang robberies. First, the ethnic relationship is the same: the victims are Swedish and among the perpetrators, the immigrants are greatly over-represented. For example, a study on sentencing practices shows that out of 24 perpetrators convicted of gang rape in 1989–91, 21 were foreign nationals. Whether the three Swedish citizens were ethnic Swedes or immigrants is not accounted for. Second, both perpetrators and victims are getting younger. In August 2001, for example, two 13-year-old girls in Malmö were raped by six immigrant boys aged 11 to 14. The case received widespread media attention, resulting in 17 rape reports against the same gang being filed with the police in the following days… The term ‘whore’ for Swedish women was launched by Muslim immigrant men from the Middle East. The concept has since been adopted by male immigrants from other cultures and now seems established…”

Exit Folkhemssverige was based, among many other sources, on the Swedish National Council for Crime Prevention’s (Brå) report “Youth who rob youth in Malmö and Stockholm” which was published in the year 2000 — evidently at a time, when Swedish authorities still published details about the ethnic backgrounds of perpetrators. According to the report, 70-75 % of the victims of youth robbers were Swedes born of two Swedish-born parents, whereas:

“Between 1995 and 1999, the proportion of suspected perpetrators born in Sweden to Swedish-born parents fell in both Malmö and Stockholm, from 21% and 36% respectively, to 10% and 15% respectively… In Malmö, foreign-born young people made up more than half of all suspected perpetrators in 1995. By 1999, this proportion had increased to 69%. In Stockholm, young people born abroad accounted for about 40 % of the suspected perpetrators in both 1995 and 1999. Foreign-born young people were severely over-represented among the suspected perpetrators…” (page 27)

Twenty years after Brå‘s report about youths who rob other youths, Prime Minister Stefan Löfven, blamed the most recent and widely publicized “humiliation robberies” on the former liberal-conservative government, which Löfven took over from in 2014:

“For a long time there was a policy, during eight years of the former conservative government, of tax reductions and welfare cuts. That will not do. Now we have changed that policy, we will invest more in welfare”.

Löfven might benefit from learning the history of gang violence in Sweden. He might start by reading Brå‘s 20-year old report.

After initially declaring that he wouldn’t use the DPA because American companies were doing the right thing and accelerating production of ventilators and other critical supplies on their own – Trump said that with a straight face while Elon Musk turned in a batch of Tesla-made “ventilators” that turned out to be CPAP machines – President Trump became embroiled in what has become by all accounts a nasty feud with 3M, a Dow constituent and pillar of American industry.

After Trump accused the company for being “unpatriotic” and risking American lives by choosing to honor contracts promising deliveries of critical medical supplies to customers abroad instead of turning them over to hospitals in the US, its CEO appeared on CNBC Friday to try and explain why its decision would save more lives in the long run because it would surely prompt other countries to respond in-kind. And given 3M’s complex, international supply chain, this could jeopardize the company’s ability to continue providing its products to the US.

Many of Trump’s critics blasted the president for appearing to scapegoat a vital American corporation for the administration’s flat-footed response to the outbreak, and repeated some version of the argument outlined above. And while their arguments are certainly based on a reasonable foundation, they’ve neglected to mention one critical fact: Other countries are already doing the same thing to the US. Many Chinese factories have stopped delivering products from masks and gloves all the way to widely used drugs. And now, after earlier restricting its export to purely “humanitarian” grounds (as if there was any other reason for the use of medicine), New Delhi is banning export of hydroxychloroquine, a malaria drug that Trump once touted as a “game changer”, and which has recently proved effective at combating some of the virus’s deadliest symptoms.

According to Bloomberg, exports of the drug and its formulations are now being prohibited “without any exceptions” and with immediate effect, according to India’s Directorate General of Foreign Trade. The statement is dated April 4.

Trump raised the issue of India’s decision to restrict export of the drug up during Saturday’s press conference. He claimed that he had appealed directly to Indian Prime Minister Narendra Modi for already-ordered shipments of the drug to be released to the US

India is giving his request “serious consideration,” the president said.

Trump says the federal government is stockpiling millions of doses of the drug to make it available for coronavirus patients. And fortunately, it’s not the only drug that has shown to be effective in treating COVID-19. Japanese PM Shinzo Abe recently ordered apanese drugmakers to ramp up production of Avigan, a drug Abe believes to be quite effective. Antivirals like Gilead’s Remdesivir have also shown effectiveness and are also being studied.

Authored by Gareth Porter via TheAmericanConservative.com,

Just like today, brass and bureaucrats ignored warnings, and sent troops overseas despite the consequences.

The U.S. military has been forced by the coronavirus pandemic to make some serious changes in their operations. But the Pentagon, and especially the Navy, have also displayed a revealing resistance to moves to stand down that were clearly needed to protect troops from the raging virus from the start.

The Army and Marine Corps have shifted from in-person to virtual recruitment meetings. But the Pentagon has reversed an initial Army decision to postpone further training and exercises for at least 30 days, and it has decided to continue sending new recruits from all the services to basic training camps, where they would no doubt be unable to sustain social distancing.

On Thursday, the captain of the aircraft carrier USS Theodore Roosevelt, on which the virus was reportedly spreading, was relieved of command. He was blamed by his superiors for the leak of a letter he wrote warning the Navy that failure to act rapidly threatened the health of his 5,000 sailors.

Secretary of Defense Mark Esper justified his decision to continue many military activities as usual by declaring these activities are “critical to national security.” But does anyone truly believe there is a military threat on the horizon that the Pentagon must prepare for right now? It is widely understood outside the Pentagon that the only real threat to that security is the coronavirus itself.

Esper’s decisions reflect a deeply ingrained Pentagon habit of protecting its parochial military interests at the expense of the health of American troops.

This pattern of behavior recalls the far worse case of the U.S. service chiefs once managing the war in Europe. They acted with even greater callousness toward the troops being called off to war in Europe during the devastating “Spanish flu” pandemic of 1918, which killed 50 million people worldwide.

It was called the “Spanish flu” only because, while the United States, Britain and France were all censoring news about the spread of the pandemic in their countries to maintain domestic morale, the press in neutralist Spain was reporting freely on influenza cases there. In fact, the first major wave of infections in the United States came in U.S. training camps set up to serve the war.

Abundant documentary evidence shows that the 1918 pandemic actually began in Haskell County, Kansas, in early 1918, when many residents came down with an unusually severe type of influenza. Some county residents were then sent to the Army’s Camp Funston at Ft. Riley, Kansas, the military’s largest training facility, training 50,000 recruits at a time for the war. Within two weeks, thousands of soldiers at the camp became sick with the new influenza virus, and 38 died.

Recruits at 14 of 32 large military training camps set up across the country to feed the U.S. war in Europe soon reported similar influenza outbreaks, apparently because some troops from Camp Funston had been sent there. By May 1918, hundreds of thousands of troops, many of whom were already infected, began boarding troopships bound for Europe, and the crowding onboard the ships created ideal conditions for the virus to explode further.

In the trenches in France, still more U.S. troops continued to be sickened by the virus, at first with milder illness and relatively few deaths But the war managers simply evacuated the sick and brought in fresh replacements, allowing the virus to adapt and mutate into more virulent and more lethal strains.

The consequences of that approach to the war became evident after the August 27 arrival in Boston harbor, when visitors brought a much more virulent and lethal strain of the virus; it quickly entered Boston itself and by September 8, had appeared at Camp Devens outside the city. Within ten days, the camp had thousands of soldiers sick with the new strain, and some of those infected at the camp boarded troops ships for Europe.

Meanwhile the lethal new strain spread from Camp Devens across the United States through September and October, ravaging one city after another. From September onward, the U.S. command in France, led by Gen. John Pershing, and the war managers in the War Department in Washington, were well aware that both U.S. troops already in Europe and the American public were suffering vast numbers of severe illnesses and death from the pandemic.

Nevertheless, Pershing continued to call for large numbers of the replacements for those stricken at the front lines, as well as for new divisions to launch a major offensive late in the year. In a message to the War Department on September 3, Pershing demanded an additional 179,000 troops.

The internal debate that followed that request, recounted by historian Carol R. Byerly, documents the chilling indifference of Pershing and the military bureaucracy in Washington to the fate of American troops they planned to send to war. After watching the horror of lethally-infected soldiers dying of pneumonia in the infected camps, acting Army Surgeon General Charles Richard strongly advised Army Chief of Staff Peyton March in late September against sending troops from the infected camps to France until the epidemic had been brought under control in the surrounding region, and March agreed.

Richard then asked for stopping the draft calls for young men heading for any camp known to be already infected. March wouldn’t go that far, and although the October draft was called off, it was to resume in November. The War Department acknowledged the heavy toll the pandemic was taking on U.S. troops in October 10, informing Pershing that he would get his troops by November 30, “if we are not stopped on account of Influenza, which has now passed the 200,000 mark.”

Richard then called for troops to be quarantined for a week before being shipped to Europe, and that the troopships carry only half the standard number of troops to reduce crowding. When March rejected those moves, which would have made it impossible for him to meet Pershing’s targets, Richard then recommended that all troop shipments be suspended until the influenza pandemic was brought under control, “except such as are demanded by urgent military necessity.”

But the chief of staff rejected such a radical shift in policy, and went to the White House to get President Woodrow Wilson’s approval for the decision. Wilson, obviously recognizing the implications of going ahead under the circumstances, asked why he refused to stop troop transport during the epidemic. March argued that Germany would be encouraged to fight on if it knew “the American divisions and replacements were no longer arriving.”Wilson then approved his decision, refusing to disturb Pershing’s war plans.

But the decision was not carried out fully. The German Supreme Command had already demanded that the Kaiser accept Wilson’s 14 points, and the armistice was signed on November 11.

The disastrous character of the U.S. elite running the First World War is clearly revealed with the astonishing fact that more American soldiers were killed and hospitalized by influenza (63,114) than in combat (53,402). And an estimated 340,000 American troops were hospitalized with influenza/pneumonia, compared with 227,000 hospitalized by Germans attacks.

The lack of concern of Washington bureaucrats for the well-being of the troops, as they pursue their own war interests, appears to be a common pattern—seen too, in the U.S. wars in Vietnam, Afghanistan and Iraq. Now it has been revealed once again in the stunningly callous response of the Pentagon to the coronavirus pandemic crisis.

In the 1918 war, there was no protest against that cold indifference, but there are now indications that the families of soldiers put being at risk are expressing their anger about it openly to representatives of the military. In a time of socio-political upheaval, and vanishing tolerance for the continuation of endless war, it could be a harbinger of accelerated unraveling of political tolerance for the war state’s overweening power.

*  *  *

Gareth Porter is an independent journalist and winner of the 2012 Gellhorn Prize for journalism. He is the author of numerous books, including Manufactured Crisis: The Untold Story of the Iran Nuclear Scare (2014), and The CIA Insiders Guide to Iran (2020),  co-written  with John Kiriakou.

In addition to the selfless human heroes who continue to fight the unprecedented global pandemic on its front-lines, there has also been a lesser covered group of virus-fighters, dutifully going about their daily tasks to help battle the virus.

We’re referring to the global robot army that has been deployed to fight the virus.

Robots worldwide are doing everything from bathing surfaces with radiation, sanitizing floors, scanning for fevers, spewing anti-microbial gas and enforcing mask wearing, according to the WSJ. Many of the robots are being put to work in areas where humans haven’t tread yet, especially in areas like hospital cleaning.

For example, at Cincinnati/Northern Kentucky International Airport, there’s a robot that disinfects and dispensing germ-killing fluid from its tanks. The robot weighs 1,050 pounds and is equipped with AI and a bank of cameras and sensors. Similar robots are already being used en masse at Changi in Singapore.

When the outbreak happened in China, UBTech Robotics, based in Shenzhen, China, developed a program to modify its robots to battle the virus. They attached a disinfectant sprayer to their Atris outdoor robot, which allows it to spray in public places. 

They have also modified two other models, the Cruzr and Aimbot, to be able to take people’s temperature using thermal cameras. The robot’s object-recognition algorithms allow them to also determine whether or not a person is wearing a mask.

Other robots are using UV light in indoor spaces to disinfect. UVC lights have long been used in hospitals to disinfect and sanitize rooms. Since the lights are harmful to humans (but also lethal to microbes), no humans can be in the room while disinfecting is taking place.

UVC lights can clean an entire room in anywhere from 10 minutes to an hour, depending on the strength of the bulb being used. They can also reach surfaces often missed by human cleaners and kill airborne microbes – a feature that could come in hand if the coronavirus is spreading by people breathing in particles in indoor spaces.

Companies like UVD Robots, launched in Denmark in 2014, are working to try and implement these lights in a safe way for humans, on top of robots that can wander public spaces. Demand for UVC disinfecting robots has “exploded” by 2x to 3x since December of last year, CEO Juul Nielsen says. They are being considered for places like warehouses, prisons and offices and are operating in a manner similar to the way robots are used in areas like melted down nuclear power plants.

Some of the outlook for the industry remains unclear and it is possible that the idea of autonomous robots that clean may lose some of its glimmer after the coronavirus fades. They may also turn out to not be cost effective, compared to traditional manual labor which can easily clean tough to reach surfaces, like door handles.

But Jenny Lee, a 15-year veteran of venture-capital firm GGV Capital, thinks that the focus on robots now will translate to a broader focus on automation going forward. She hopes companies will continue to work on robots with smaller form factors and more autonomy. 

Benjamin Tanner, chief executive of Austin, Texas-based Microchem Laboratory said: “There are manufacturers who have done no testing of their own, and it’s a little bit of buyer beware on the UV market.”

John Rhee, general manager of UBTech Robotics North America concluded: “We talk about flattening the curve, but the need to be vigilant and have increased monitoring and have measures in place to decrease transmission are things that organizations both public and private will have to take seriously for a very long time.”

Via ConsortiumNews.com,

Imprisoned WikiLeaks publisher Julian Assange is not eligible for an early Covid-19 release from prison with other inmates because he is not serving a criminal sentence, the Australian Associated Press has reported.

British Justice Secretary Robert Buckland said Saturday that some low-risk inmates, weeks from release will be let go with monitoring devices to help avoid a further outbreak of Covid-19 in the nations’ prisons.

So far 88 prisoners and 15 staff have tested positive for the virus in British prisons. More than 25 percent of the nations’ prison staff are quarantining themselves. 

“This government is committed to ensuring that justice is served to those who break the law,” Buckland said in a statement. “But this is an unprecedented situation because if coronavirus takes hold in our prisons, the NHS could be overwhelmed and more lives put at risk.”

The Ministry of Justice told the AAP that Assange won’t be among those released because he isn’t serving a custodial sentence. 

Britain will release about 4,000 nonviolent inmates from their prisons to help curb the spread of the coronavirus, the country’s Ministry of Justice announced Saturday.

The ministry described prisoners eligible for release as “low-risk offenders,” noting those convicted of violent or sexual offenses will not be considered.

Inmates will be tracked electronically and required to stay home, officials said. — The Hill

In other words, because he has not been convicted of a crime, and is instead only being held on remand pending the outcome of the U.S. extradition request, he must remain in Belmarsh prison with high-risk inmates–the most serious and hardened criminals. 

WikiLeaks Ambassador Joseph Farrell released this video:

“#Assange is locked up in what is becoming a vortex of infection with no self-defense. We don’t have the luxury to allow this to happen. Don’t let a him be a sitting duck for a virus that knows no bounds” @SwaziJAF #COVID19
Go tohttps://t.co/c4YtHCTqwG
&https://t.co/6VBNl1yHfO pic.twitter.com/4fRNzvurQd

— Don’t Extradite Assange (@DEAcampaign) March 30, 2020

The Daily Maverick reported this week that there is one other prisoner on remand in Belmarsh, who would presumably also be left to rot in the jail as the virus spreads throughout the British prison system. 

White House economic adviser got into a massive argument with the coronavirus task force’s Anthony Fauci over the doctor’s ongoing resistance to the use of hydroxychloroquine to treat COVID-19, despite reports of the drug’s widespread efficacy.

Via Axios:

• Numerous government officials were at the table, including Fauci, coronavirus response coordinator Deborah Birx, Jared Kushner, acting Homeland Security Secretary Chad Wolf, and Commissioner of Food and Drugs Stephen Hahn.
• Behind them sat staff, including Peter Navarro, tapped by Trump to compel private companies to meet the government’s coronavirus needs under the Defense Production Act.

According to the report, towards the end of the meeting Hahn began a discussion of the commonly used malaria drug hydroxychloroquine – which was recently rated the ‘most effective therapy‘ for coronavirus according to a global survey of more than 6,000 doctors.

After Hahn gave an update on various trials and real-world use of the drug, Navarro got up and dropped a stack of folders on the table to pass around.

According to Axios‘s source, “the first words out of his [Navarro’s] mouth are that the studies that he’s seen, I believe they’re mostly overseas, show ‘clear therapeutic efficacy,’” adding “Those are the exact words out of his mouth.

Fauci – who’s not got his own Twitter hashtag, #FireFauci – began pushing back against Navarro, repeating his oft-repeated contention that ‘there’s only anecdotal evidence’ that the drug works against COVID-19.

Navarro exploded – after Fauci’s mention of anecdotal evidence “just set Peter off.” The economic adviser shot back “That’s the science, not anecdote,” while pointing to the stack of folders on the desk, which included the results of studies from around the world showing its efficacy.

Here’s what unfolded next, via Axios:

Navarro started raising his voice, and at one point accused Fauci of objecting to Trump’s travel restrictions, saying, “You were the one who early on objected to the travel restrictions with China,” saying that travel restrictions don’t work. (Navarro was one of the earliest to push the China travel ban.)

• Fauci looked confused, according to a source in the room. After Trump imposed the travel restrictions, Fauci has publicly praised the president’s restriction on travel from China.
• Pence was trying to moderate the heated discussion. “It was pretty clear that everyone was just trying to get Peter to sit down and stop being so confrontational,” said one of the sources.
• Eventually, Kushner turned to Navarro and said, “Peter, take yes for an answer,” because most everyone agreed, by that time, it was important to surge the supply of the drug to hot zones.
• The principals agreed that the administration’s public stance should be that the decision to use the drug is between doctors and patients.
• Trump ended up announcing at his press conference that he had 29 million doses of hydroxychloroquine in the Strategic National Stockpile.

According to a source familiar with the coronavirus task force, “There has never been a confrontation in the task force meetings like the one yesterday,” adding “People speak up and there’s robust debate, but there’s never been a confrontation. Yesterday was the first confrontation.” 

Meanwhile, 37% of 6,227 doctors across 30 countries felt the drug was the “most effective therapy” out of 15 options in treating coronavirus, according to a poll reported by the Washington Times.

The drug has been prescribed in 72% of cases in Spain, 49% in Italy, 41% in Brazil, 39% in Mexico, 28% in France, and 23% in the USA. Overall, 19% of physicians have prescribed the drug for high-risk patients, and 8% for low-risk patients.

More from the Sermo poll (via the Washington Times)

***

Sermo CEO Peter Kirk called the polling results a “treasure trove of global insights for policy makers.”

“Physicians should have more of a voice in how we deal with this pandemic and be able to quickly share information with one another and the world,” he said. “With censorship of the media and the medical community in some countries, along with biased and poorly designed studies, solutions to the pandemic are being delayed.”

The survey also found that 63% of U.S. physicians believe restrictions should be lifted in six weeks or more, and that the epidemic’s peak is at least 3-4 weeks away.

The survey also found that 83% of global physicians anticipate a second global outbreak, including 90% of U.S. doctors but only 50% of physicians in China.

On average, U.S. coronavirus testing takes 4-5 days, while 10% of cases take longer than seven days. In China, 73% of doctors reported getting rest results back in 24 hours.

In cases of ventilator shortages, all countries but China said the top criteria should be patients with the best chance of recovery (47%), followed by patients with the highest risk of death (21%), and then first responders (15%).