iftttwall

On Tuesday a key pipeline carrying gas between Turkey and Iran exploded at the Gurbulak border gate on the Turkish side near the Iranian border, temporarily halting gas exports from Iran.

Though most international reports treated the blast as mysterious in origin, including some Turkish state broadcasters such as TRT, Iranian leader were quick to blame “terrorists”.

“This morning, terrorists attacked a natural gas pipeline inside Turkey near Iran’s Bazargan border with Turkey… Flow of gas has been halted,” director of the National Iranian Gas Company, Mehdi Jamshidi Dana, said in a statement.

Fire and smoke could be seen billowing from the site throughout the much of the day in dramatic footage captured by Russian media.

“The gas flow on the natural gas pipeline was cut and the fire that had started was extinguished by fire squads,” Turkish broadcaster TRT said, adding that the incident is under investigation.

According to the New York Times, citing Iranian state sources further, Kurdish militants operating in eastern under the PKK are being blamed for the blast :

Iran’s state-run IRNA news agency quoted National Iranian Gas Co. gas dispatching director Mahdi Jamshidi Dana as saying authorities suspected the Kurdistan Workers’ Party, or PKK, likely attacked the pipeline.

Kurdish militants belonging to the outlawed PKK have targeted oil and gas pipelines from Iraq and Iran as part of their more than three-decade old campaign for self-rule in southeast Turkey.

Indeed at the height of fighting between PKK militants and the Turkish state throughout the 1990’s and into the 2000’s the pipeline was attacked and disabled on repeat occasions. 

Turkey reportedly has kept an extremely reduced border security force in the area of late due to the coronavirus pandemic.

“It takes usually three to four days to repair and resume gas exports,” Turkish reports said.

Authored by Judith Bergman via The Gatestone Institute,

A recent report published by Linköping University about the Swedish National Council for Crime Prevention (Brå), “Can Brå be trusted?” has claimed that Brå’s reports are politically biased.

According to Brå’s own website, “Brå is an agency under the auspices of the Ministry of Justice and a knowledge centre for the criminal justice system. The agency’s mandate is to contribute to the development of knowledge within the criminal justice system and the criminal policy area, as well as to promote crime prevention work. Brå is responsible for the official criminal statistics and other statistics, which includes producing, following, analysing, and reporting on criminality and the criminal justice system’s responses to crime”.

It is therefore crucial that Brå fulfill its obligations in a factual and objective manner, not least in the current environment, when Sweden is experiencing a veritable crime wave, including shootings, bombings and other gang-inspired violence that some commentators have likened to “war”.

According to the Linköping University report, the results of which were based primarily on interviews with former and current employees and managers of Brå, in addition to a number of former police chiefs and ministers of justice, Brå’s work is politically biased due to political pressure from the Ministry of Justice as well as the management of Brå. The report states:

“For example, a former employee said that he, together with the Director-General [of Brå] was called to the Ministry of Justice for a conversation with the requirement of a report to be ‘corrected’. The report consisted of an evaluation of a government proposal, concluding that the proposals were harmful. The interviewee realized that the conclusions would be politically unpopular, but had nevertheless written them… Other former employees have pointed out that it was clear that there were political reasons why they were pressured to change content in reports even though these researchers were not called to the Ministry… One employee reported, among other things, that a director-general expressed that ‘there is a reality and a political reality’ when the director-general demanded that an employee change a report…”

The Linköping University report goes on to say:

“Interviews show that adaptation of content in reports has taken place in different ways. A former employee made the following summary: ‘If results were not liked then censorship was used, correction of results, toning down results and highlighting other parts of [the] study that were not so sensitive or that could show positive results'”.

Another employee said:

“After I was hired at Brå, it didn’t take me long to realize that working at Brå is a big challenge. As an employee of Brå, you have to write and think in a certain way. Brå is extremely controlled from the top. There are some people at Brå who run [the organization] with an iron hand. If one were to be a little harsh then one could liken it to a sect. I don’t think they really understand what kind of culture they have created“.

The Linköping report states that there appears to be a culture of silence by which is meant, “norms that create silence among employees, when they do not dare to bring up certain viewpoints, questions or criticism, whether internal or external”.

Ironically, this culture of silence has been symptomatic of Swedish society, where most have been afraid to speak publicly about the problems caused by unfettered migration for fear of being ostracized.

The report also found that Brå appears to strive to hire employees that will “act as obedient bureaucrats at an authority, rather than people who have accepted a researcher’s role”.

The report has caused consternation in Sweden. The Swedish Parliament’s judicial committee has now invited the authors of the report, as well as the general director, to their next meeting. Johan Forsell, the legal spokesman of the Moderate party, said:

“Very serious allegations and accusations are made in the report. Brå is, after all, an expert authority that is supposed to deliver facts that objectively reflect society. We need, quite simply, to get to the bottom of this… Regardless of when it happened and under what political color, the very suspicion of influence is serious enough. But that responsibility now falls on Justice Minister Morgan Johansson”.

Meanwhile, Sweden continues its downward spiral. Last year there were 257 reports of explosions — including attempted explosions — an increase of 59% compared to 2018, according to SVT Nyheter. Yet, only seven people were convicted for any of those 257 crimes. In 2020, at least 10 explosions have already taken place.

According to Stefan Hector, head of the National Operative Unit (NOA):

“Earlier we saw that hand grenades were used. Now we see how homemade explosives are used instead as weapons in conflicts. Either to injure or to terrorize but with a new ruthlessness where they bomb wherever the public is without caring that the public might get hurt”.

According to SVT News, the police and other authorities “do not know” where all the explosives come from. “The issue of explosives as weapons in conflicts is relatively new. This means that we have considerable uncertainty as to where the parts for the explosive charges come from”, Hector said.

“Unless the integration of the newcomers succeeds better, in the long run, the social glue that makes a democratic welfare society of our kind possible risks being torn apart”, professor in political science at the University of Uppsala, Tommy Möller, recently wrote in an op-ed.

Gatestone Institute has described the serious economic, welfare, crime and other challenges that Swedish society now faces as a result of migration into the country, for example here, here, here, here and here.

One issue that Swedish figures of authority are now admitting to having neglected over the years is anti-Semitism. Municipal managers in Malmö, for instance, Sweden’s third-largest city, where immigrants constitute one-third of the population, now say that it took a long time before they “saw the extent” of the problem. Anders Rubin was school council member of the Malmö municipality from 2013 to 2018. “Many students who have a background in the Middle East, and in several Muslim countries, have notions of Jews that are not at all compatible with democratic values,” he told Sydsvenskan recently. He also confessed that the municipality had not taken the complaints of its Jewish citizens seriously. According to Sydsvenskan:

“Anders Rubin says he and the other leading Social Democrats initially underestimated the alarm from the city’s Jews about a growing amount of threats and harassment. He describes it as the municipality management having had their ‘guards down’.”

“It was not felt that there was an established anti-Semitic attitude more than in extremely peripheral right-wing groups. I think we understood that the problem was marginal” admitted Rubin to Sydsvenskan. The newspaper also recounts how in 2009, Malmö’s then-mayor, Ilmar Reepalu, responded to attacks on a Jewish demonstration by saying that Swedish Jews ought to distance themselves from Israel.

“It was only when we began to realize that in some of our immigrant groups there were ideas that were problematic, that we realized that we were forced to do something”, Rubin said. He said there are probably limits to what municipal authorities can do about anti-Semitism.

“To think that we could achieve the frictionless city is a utopia. In such a diversified city as Malmö, one cannot change those types of attitudes by coming from the top and being forceful and telling people what to think. Somehow, it is extremely difficult to drive this down to a municipal political level. I think it is a complicated question, how we as representatives of the majority society should act to influence the attitudes of minorities. It easily becomes counterproductive”.

Perhaps unwittingly, Rubin made a crucial point here: namely, that for years authorities swept serious problems related to migration under the rug, making them taboo and then vilifying those who dared to talk about them in public. The Linköping University report about the culture at Brå, sadly, exposed this pattern.

Authored by Alastair Crooke via The Strategic Culture Foundation,

As the lockdowns across Europe began to bite, the U.S. Establishment began its ‘wobble’. The more elegant amongst élite circles pointed to a dangerous mis-match in timelines: The medical advice has been: ‘lockdown until the virus begins to subside’, but that advice encompassed too, the possibility of Covid-19 returning later in the year in a Phase Two, thus requiring further personal distancing.

Hands shot high in absolute horror amongst some business and Wall Street leaders: Could the U.S. economy sustain such a prospect? Might not a long shutdown inflict permanent damage? Would there even be an economy left – to resurrect – in the wake of ‘peak Coronavirus’?

The mis-match thesis then acquired a third strand: To immediate economic fears standing in contradistinction to longer term medical perspectives was added the third question: Are Americans culturally ‘built’ for lockdown (that is to say, will an individualistic, libertarian-minded – and armed society – acquiesce to being ordered to stay home over a long period)?

Not surprisingly, President Trump – with an advancing Election, and his colours pinned to the mast of sound economic management – hit on the formula that the ‘cure cannot be worse than the disease’: Let’s have the economy open by Easter (12 April – i.e. 15 days hence), he declared.

The issue of the virus is not manufactured, (though there are still many in the U.S., who regard it as an overblown scare), nor is the dilemma of the divergent timelines. Actually – a great deal hangs on how these timelines play out – our global economic and political prospects, no less.

Just about everyone and his dog now claims to have modelled Covid-19. But in truth, we still know very little on which to accurately predict the virus’ course. The ‘data’ is made unreliable: firstly, because not only does the virus have different mutations, but secondly, owing to it acting in two quite different modes: One is mild, or even asymptomatic (the 80%); and the second mode is serious (requiring hospitalisation) – and for a minority of the 20% – deadly.

But consequently, we simply do not know how much of the population is infected, or is still to be infected – precisely owing to its very mildness or, its asymptomatic characteristics amongst the 80 percent-ers. There hasn’t been enough testing – and anyway, given its mild or non-noticeable iteration, many people may have it, but don’t test.

So the data modelling is more ‘art’, than predictive, and therefore introduces economic uncertainty. The damage to the economy is obvious from the first, but the question least considered is the importance of the third strand: Is Trump right when he says that America ‘is not built for lockdown’?

He may be right, in one sense; but if he opts to prioritise a quick opening of the economy over the welfare of the American people, he may face incalculable consequences – should Covid-19 bite him in the backside: Either by mutating (as did the Spanish ‘flu in August 1918); or simply, by beginning a second phase through a resurgence of community infection later in the year.

Plainly, Trump is of the ‘fears are exaggerated’ school of thought, and seems poised to bet his Presidency on it. In this era, viral social media images of hospitals overwhelmed, and of patients fighting to breathe their last, unaided, and lying on the floor, jam-packed in corridors, or in converted gyms – can become politically toxic. The counter- response that the financial system is struggling for oxygen, under lockdown, too, may strike many people as a ‘little lacking’ in common humanity – perhaps?

The dilemma is cruel. And maybe the social timeline ‘strand’ has more substance, than is generally granted? Americans are libertarian in many ways (not least, in their determination to carry arms). This is reflected also, in their deliberate eschewing of a public health programme, and in the purposefully limited support provided to the hourly paid – who are laid off. It is the ethos of individualism, a work ethic and the consequence of a ‘libertarian’ constitution.

The St Louis Chair of the Fed has predicted 30% unemployment and 50% of the economy at standstill by the end of June. Is it sustainable to have these furloughed workers dying in the street, because they cannot afford America’s ‘boutique’ health-service for the wealthy? (we’ve seen videos of people unexpectedly falling down in the street, dying, as passers-by skirt the afflicted victim – from both China and Iran). Such videos would be inflammatory in the U.S.

What happens if ‘lockdown’ were extended, and the unemployed were to attack supermarkets for food they cannot afford; or because the supermarket shelves are empty (this has happened in Europe)? What would videos of the U.S. National Guard look like as they arrive, armed for war, to put down the ‘looters’? What happens if the rioters angry at their plight – and without money – use their right to bear weapons to fight against the National Guardsmen? Can the U.S. national fabric handle such strains? Might it not disintegrate?

Here, the U.S. differs from Europe. America has not, since the Civil War, had to experience the harsh circumstances in hospitals approximating to wartime, on its own soil.

So, is Trump right, then, to prioritise keeping the U.S. economy open? Well, firstly, the notion that bits of the economy can be opened where infection-rates are low, whilst other parts are locked down, seems odd: Covid-19 – we do know – is highly infectious. Those who show no symptoms – whether they are under 50 years, or under 40 years-old – would not preclude them from being silent ‘super-carriers’ of the disease. We have not heard there is a test for anti-bodies, which might signal that an individual enjoys immunity. But unless an area has no infections, putting even one carrier into a workplace, would be sufficient to trigger a localised community infection.

Perhaps then, Trump might be right that anything other than a short (and possibly ineffective) lockdown is not manageable in the U.S.: That it might tear apart an already polarised, armed and inegalitarian, social fabric. There is then, a substantial point here: How far, and for how long, can an U.S. or European society accept a ‘command’ or martial-law administration – before citizens rebel, and head to the beaches for summer? What then?

Is it possible that can Trump may emerge from these events as the ‘saviour of the U.S. economy’? Here, we touch on the key question of the adaptability of élites. Are the U.S. élite capable of true transformation of consciousness as circumstances alter? On the answer to this question will hang the geo-political future. It was the inability of the Soviet elites to give up on their corrupt and privileged status quo that led to the implosion of the USSR in 1987.

We are often told that Americans are great innovators and graspers of opportunity. But today, the U.S. élites are utterly intent on preserving a status quo – as the viability and even the reality of that status quo is being questioned by important insiders. For the élite majority, though, the mind-set is intransigent and adamant. The status quo suits them well. They do not wish to see to see it reformed or changed. They refuse to think differently.

Eventually, the coronavirus will subside; but what will America look like when it does? For the moment, the élites believe that America will look just as it did, in February, before the impact of the pandemic hit U.S. markets. So, we have had the Fed, the Bank of England, the Bank of Japan all doing the same thing, over and over again, hoping that the economy will snap-back to ‘normal’. But it isn’t working.

The Fed fears a collapse in credit (with due reason), but ‘normality’ is not returning from the rush of liquidity hosed across credit markets. In the 2008 crisis, the Fed responded with all sorts of easing. This time the Fed is throwing the ‘kitchen sink’ at markets, offering ‘facilities’ for almost every asset class. At the present rate of growth, the Fed balance sheet will be $6 Trillion in days – and reach a total equivalent to almost 50% of the U.S. GDP by June. Another, unimaginable chunk of debt.

The problem is that the Fed’s measures will fail as stimulus – because it is not a problem of demand shortfall, but of supply-shock – as the globe implements ‘shut-down’ in order to slow infection. But, with recession or depression looming, asset prices are collapsing. Bloomberg has noted that core tenets such as what constitutes a safe asset, or the expectation of returns over the next decade, are all being thrown out of the window – as Central Banks strive to avert a global recession: The latter have unleashed a money tsunami, unlike anything seen before, and the fear of inflation is rising, together with a sense that all the old metrics of what constitutes safe investments are gone for good.

Meanwhile the U.S. Congress has passed a $2 trillion bill to counter the effects of Covid-19. It was well received for a while in the U.S. markets, before they fell again. The bill may help keep a part of the big business status quo alive, for now, but the bottom line is that these spending bills – as Jim Rickards notes – “provide spending but they do not provide stimulus”. And all that spending – like that of the Fed – essentially will be helicopter money: i.e. monetised debt.

The essential dilemma is that the Central Bankers’ Holy Grail – stimulus – depends on consumers, who constitute 70% of the U.S. economy; and on whether they decide consume – and to what extent. And that will depend upon their psychology in the post-Covid-19 era, and not on what the Fed does, or does not, do now.

If consumers get used – during lockdown – to doing without; to economising; they may well decide that increased savings and debt reduction, are the best ways to prepare for straitened times. 83% of U.S. businesses are small or medium sized companies. Some may survive and resume work, but others will not re-open after the lockdown. It will be a different atmosphere: a different economic era.

Of course, the élites want to go ‘back to normal’ as quickly as possible, but the ‘bottom line’ emerging from the Fed’s failure to staunch market paralysis is that that which the élites had thought to be ‘normal’ is proving not to have been normal at all. It is now apparent as having been a financialised bubble – and Covid-19 happens to have been the pin that popped it. This bubble was just the biggest, in a long line of Fed-blown bubbles (NASDAQ, sub-prime mortgages, etc.) – and now, the final ‘everything-bubble’ has burst. There’s nothing now left for the Fed to ‘bubble up’. It’s probably over.

Here’s the larger – global – point. Again, it revolves around psychology: Have these events been the ‘pin’ which also pops some sort of mass psychological bubble (a sealed Cartesian, mental retort)? Will public faith in the status quo crash, along with the financialised ‘everything-bubble’? Will a momentary flash of enlightenment to the house-of-cards reality that Americans had been living, cause them to start seeing their world afresh, and in its raw, hard reality? If so, the world order stands on the cusp of change.

For some time now, a general popular disquiet has been incubating. The question is whether, in the cold post-Covid-19 reality, Americans will begin to cease their acquiescence to – and their co-operation with – the status quo.

This might mean trouble as America and some European states try to manage the pandemic through invoking the necessity of a war-time command-governance. Will people accept such a command system, if they see its principal purpose being the return to a failed status quo ante?

When Goldman’s crude oil analysts wrote on Monday that “This Is The Largest Economic Shock Of Our Lifetimes“, they echoed something we said last week – nameley that the record surge in excess oil output amounting to a mindblowing 20 million barrels daily or roughly 20% of global demand…

… which is the result of the Saudi oil price war which has unleashed a record gusher in Saudi oil production, coupled with a historic crash in oil demand (which Goldman estimated at 26mmb/d), could send the price of landlocked crude oil negative: “this shock is extremely negative for oil prices and is sending landlocked crude prices into negative territory.”

We didn’t have long to wait, because while oil prices for virtually all grades have now collapsed to cash costs…

… Bloomberg points out that in a rather obscure corner of the American physical oil market, crude prices have now officially turned negative as “producers are actually paying consumers to take away the black stuff.”

The first crude stream to price below zero was Wyoming Asphalt Sour, a dense oil used mostly to produce paving bitumen. Energy trading giant Mercuria bid negative 19 cents per barrel in mid-March for the crude, effectively asking producers to pay for the luxury of getting rid of their output.

Echoing Goldman, Elisabeth Murphy, an analyst at consultant ESAI Energy said that “these are landlocked crude with just no buyers. In areas where storage is filling up quickly, prices could go negative. Shut-ins are likely to happen by then.”

While Brent and WTI are hovering just around $20 a barrel, in the world of physical oil where actual barrels change hands  producers are getting much less according to Bloomberg as demand plunges due to the lockdown to contain the spread of the coronavirus.

Oil traders believe other crude streams are likely to see negative prices soon at the well-head as refiners reduce the amount of crude they process, leaving some landlocked crude without easy access to pipeline trapped. Goldman’s Jeffrey Currie explained this pricing divergence as follows:

Brent is a waterborne crude priced on an island in the North Sea, 500 meters from the water. In contrast, WTI is landlocked and 500 miles from the water. As I like to say, I would rather have a high-cost waterborne crude oil that can access a ship than a landlocked pipeline crude sitting behind thousands of miles of pipe, like the crude oils in the US, Russia and Canada.

As we noted last night, when we asked who would see zero dollar oil first, several grades in North America are already trading in single digit territory as the market tries to force some output to shut-in. Canadian Western Select, the benchmark price for the giant oil-sands industry in Canada, fell to $4 on Monday, while Midland Texas was last seen trading just around $10.

Southern Green Canyon in the Gulf of Mexico is worth $11.51 a barrel, Oklahoma Sour is changing hands at $5.75, Nebraska Intermediate at $8, while Wyoming Sweet prices at $3 a barrel, per Bloomberg.

While there is very little hope of a dramatic improvement in the situation, late on Tuesday, President Trump said the U.S. would meet with Saudi Arabia and Russia with the goal of halting the historic plunge in oil prices. Trump, speaking at the White House Tuesday, said he’s raised the issue with Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman.

“They’re going to get together and we’re all going to get together and we’re going to see what we can do,” he said. “The two countries are discussing it. And I am joining at the appropriate time, if need be.”

It’s unclear what if anything Trump “can do” in what is effectively a collusive war between the two nations meant to crush shale oil.

Trump’s intervention comes as April shapes up to be a calamitous month for the oil market. Saudi Arabia plans to boost its supply to a record 12.3 million barrels a day, up from about 9.7 million in February. At the same time, fuel consumption is poised to plummet by 15 million to 22 million barrels as coronavirus-related lockdowns halt transit in much of the world.

There is another problem: oil demand has been so battered by government lockdowns to stop the spread of the coronavirus that any conceivable oil production cut agreement between the U.S., Canada, Russia and OPEC members would still fall well short of what’s needed to shore up the market, Goldman calculated. In fact, assuming roughly 20 million in excess supply currently, the only thing that could balance the oil market is nothing short of both Saudi Arabia and Russia halting all output together. And that will never happen.

Finally, below we put the “long history” of oil prices in context:

Ivy League schools, known for being the most selective colleges in the nation, became a little less selective this year.

Names like Harvard, Dartmouth and Penn have all posted increased acceptance rates for classes that will begin this fall, according to a new report from the Wall Street Journal. 

Harvard admitted 4.9% of the 40,248 people who applied last year compared to its 4.6% acceptance rate the year prior. Dartmouth this year accepted 8.8% of applicants, up from 7.9% last year. Columbia admitted 6.1% of applicants this year, which was up from 5.3% the year prior, as applications dropped by almost 2,500 and the school simultaneously accepted 220 more students.

Yale also saw its acceptance rate move higher, to 6.5% from 6.2%. And Penn’s acceptance rate went from 7.7% to 8.1%.

Colleges, including Ivy League names, have hit an unprecedentedly challenging landscape with the ongoing pandemic shaking up enrollment projections for each university. It is still unknown what the state of the nation will be by the time fall courses are set to begin: will students be allowed on campus? Will residence halls be open? Will foreign students even be allowed to travel to the U.S.?

Some schools pulled extra candidates from their waitlist or “deny” groups in order to make sure they could enroll a full class. Reed College in Oregon saw its acceptance rate surge by 3% and Franklin & Marshall accepted 32% of applicants, which is up 2%.

Cornell said it wasn’t even going to issue public statements about its admission figures any longer. Jonathan Burdick, vice president for enrollment at Cornell said: “While metrics such as application numbers and admissions rates are an area of focus for many as they review annual activity in higher education, Cornell’s thorough and holistic review processes mean that no one applicant’s chances can be guided by ‘averages’.” 

Brown and Princeton both bucked the trend with Brown dropping its admission rate to 6.9% from 7.1% and Princeton dropping its admission rate to 5.6% from 5.8%. 

But at least for now, it looks as though the once exclusive Ivy League isn’t so “exclusive” anymore…