Month: September 2018

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Authored by Craig Murray via CraigMurray.org.uk,

The Metropolitan Police made one statement in the Skripal case which is plainly untrue; they claimed not to know on what kind of visa Boshirov and Petrov were travelling. As they knew the passports they used, and had footage of them coming through the airport, that is impossible. The Border Force could tell them in 30 seconds flat.

To get a UK visa Boshirov and Petrov would have had to attend the UK Visa Application Centre in Moscow. There not only would their photographs be taken, but their fingerprints would have been taken and, if in the last few years, their irises scanned. The Metropolitan Police would naturally have obtained their fingerprints from the Visa Application.

One thing of which we can be certain is that their fingerprints are not on the perfume bottle or packaging found in Charlie Rowley’s home. We can be certain of that because no charges have been brought against the two in relation to the death of Dawn Sturgess, and we know the police have their fingerprints. The fact of there being no credible evidence, according to either the Metropolitan Police or the Crown Prosecution Service, to link them to the Amesbury poisoning, has profound implications.

Why the Metropolitan Police were so coy about telling us what kind of visa the pair held, points to a wider mystery. Why were they given the visas in the first place, and what story did they tell to get them? It is not easy for a Russian citizen, particularly an economically active male, to get past the UK Border Agency. The visa application process is very intrusive. They have to produce evidence of family and professional circumstances, including employment and address, evidence of funds, including at least three months of bank statements, and evidence of the purpose of the visit. These details are then actively checked out by the Visa Department.

If they had told the story to the visa section they told to Russia Today, that they were freelance traders in fitness products wanting to visit Salisbury Cathedral, they would have been refused a visa as being candidates for overstaying. They would have been judged not to have sufficiently stable employment in Russia to ensure they would return. So what story did Petrov and Boshirov give on their visa application, why were they given a visa, and what kind of visa? And why do the British authorities not want us to know the answer to these questions?

Which brings us to the claims of neo-conservative propaganda website Bellingcat. They claim together with the Russian Insider website to have obtained documentary evidence that Petrov and Boshirov’s passports were of a series issued only to Russian spies, and that their applications listed GRU headquarters as their address.

There are some problems with Bellingcat’s analysis. The first is that they also quote Russian website fontanka.ru as a source, but fontanka.ru actually say the precise opposite of what Bellingcat claim – that the passport number series is indeed a civilian one and civilians do have passports in that series.

Fontanka also state it is not unusual for the two to have close passport numbers – it merely means they applied together. On other points, fontanka.ru do confirm Bellingcat’s account of another suspected GRU officer having serial numbers close to those of Boshirov and Petrov.

But there is a bigger question of the authenticity of the documents themselves. Fontanka.ru is a blind alley – they are not the source of the documents, just commenting on them, and Bellingcat are just attempting the old trick of setting up a circular “confirmation”. Russian Insider is neither Russian nor an Insider. Its name is a false claim and it consists of a combination of western “experts” writing on Russia, and reprints from the Russian media. It has no track record of inside access to Russian government secrets or documents, and nor does Bellingcat.

What Bellingcat does have is a track record of shilling for the security services. Bellingcat claims its purpose is to clear up fake news, yet has been entirely opaque about the real source of its so-called documents.

MI6 have almost 40 officers in Russia, running hundreds of agents. The CIA has a multiple of that. They pool their information. Both the UK and US have large visa sections whose major function is the analysis of Russian passports, their types and numbers and what they tell about the individual.

We are to believe that Boshirov and Petrov were GRU agents whose identity was plainly obvious from their passports, who had no believable cover identities, but that neither the visa department nor MI6 (which two cooperate closely and all the time) knew they were giving visas to GRU agents. Yet this information was readily available to Bellingcat?

I do not know if the two are agents or just tourists. But the claimed evidence they were agents is, if genuine, so obvious that the two would have been under close surveillance throughout their stay in the UK. If the official story is true, then the failures of the UK visa department and MI6 are abject and shameful. As is the failure to take simple precautions for the Skripals’ security, like the inexplicable absence of CCTV covering the house of Sergei Skripal, an important ex-agent and defector supposedly under British protection.

A further thought. We are informed that Boshirov and Petrov left a trace of novichok in their hotel bedroom. How likely is it, really, that, the day before the professional assassination attempt, which involved handling an agent with which any contact could kill you, Boshirov and Petrov would prepare, not by resting, but by an all night drugs and sex session? Would you really not want the steadiest possible hand the next day? Would you really invite a prostitute into the room with the novichok perfume in it, and behave in a way that led to complaints and could have brought you to official notice?

Is it not astonishing that nobody in the corporate and state media has written that this behaviour is at all unlikely, while scores of “journalists” have written that visiting Salisbury as a tourist, and returning the next day because the visit was ruined by snow, would be highly unlikely?

To me, even more conclusively, we were informed by cold war propagandists like ex White House staffer Dan Kaszeta that the reason the Skripals were not killed is that novichok is degraded by water. To quote Kaszeta “Soap and water is quite good at decontaminating nerve agents”.

In which case it is extremely improbable that the agents handling the novichok, who allegedly had the novichok in their bedroom, would choose a hotel room which did not have an en suite bathroom. If I spilt some novichok on myself I would not want to be queuing in the corridor for the shower. The GRU may not be big on health and safety, but the idea that their agents chose not to have basic washing facilities available while handling the novichok is wildly improbable.

The only link of Boshirov and Petrov to the novichok is the trace in the hotel room. The identification there of a microscopic trace of novichok came from a single swab, all other swabs were negative, and the test could not be repeated even on the original positive sample. For other reasons given above, I absolutely doubt these two had novichok in that bedroom. Who they really are, and how much the security services knew about them, remain open questions.

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Recently released figures from Eurostat reveal the regions/areas in the European Union where men and women have the longest life expectancies.

As Statista’s chart shows, Madrid is top of the list for both genders, with women born in Madrid in 2016 expected to live until they are 87.8 years old. Men in the community of Madrid region are predicted to live until they are 82.2.

You will find more infographics at Statista

So instead of seeking the mythical ‘fountain of youth’, or spending thousands of growth hormone, the simple answer to living a long life is – Be born a Spanish woman (or an Italian Man)

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Authored by Finian Cunningham via The Strategic Culture Foundation,

One trait of imperial decadence is untrammeled hubris. Given the increasingly arrant arrogance on display by United States’ officials, public figures and news media we can safely conclude that this empire is accelerating into decadence.

A recent spectacular example comes with separate visits to Europe by US defense secretary James Mattis and Steve Bannon, the former aide to President Trump.

Bannon was addressing a rightwing forum in Italy at the weekend in which he declared that he would be devoting “80 per cent” of his time to help anti-European Union parties win seats in the next European parliamentary elections due in May 2019.

Bannon said he was setting up a coordinating committee, called “The Movement”, in Brussels, from where his political project would direct “war rooms” across Europe to ensure that anti-EU and anti-immigrant parties would succeed in gaining up to a third of the total seats in the 27-nation member bloc’s parliamentary elections. In short, a declaration of political warfare. Unapologetic. Brazen. Arrogant.

The American ideologue and former Goldman Sachs banker, who is accused of inciting racism and neofascism in the US, has openly backed nationalist politicians in Europe, from the UK’s Nigel Farage to France’s Marine Le Pen, Hungary’s Victor Orban and Italy’s Matteo Salvini.

Bannon is threatening to explicitly unravel the European Union which he views with contempt for what he calls is its “cultural Marxism”.

Meanwhile, earlier last week, Pentagon chief James Mattis was in Macedonia where he gave his full-throated support for a Yes vote in the country’s referendum.

The plebiscite to take place this weekend will decide if the small Balkan country can become a member of the NATO military alliance and the European Union. It is a crucial vote for the country.

The irony of this combined American hypocrisy is truly astounding. For the past two years, US politicians and news media have non-stop accused Russia of “interfering” in their country’s democracy. First, in the 2016 presidential election, and now in the run-up to the mid-term congressional polls in November.

No credible evidence is ever presented to substantiate these sensational American accusations against Russia, which some hawkish hot-heads like the late Senator John McCain have even gone as far as denouncing for committing “an act of war”.

The same allegations based on “highly likely” innuendo have been trotted out against Russia for “meddling” in European polls, such as the Brexit referendum in June 2016, the French presidential election in May 2017, and now the referendum in Macedonia.

While in the capital Skopje last week telling Macedonians to vote for joining NATO, Mattis had the brass neck to accuse Russia of interfering in the referendum. Typically, Mattis did not provide any evidence. He even admitted he didn’t know how effective alleged Russian influence has been in swaying voting intentions – meaning the US has no idea if Russia is really trying to meddle or not.

But what we do know, as reported by US media, is that Washington has vociferously called for a Yes vote in the Macedonian referendum, including a personal call from President Donald Trump. Moreover, as US media also report, Washington has poured million of dollars into the Balkan country to “counter social media campaigns” calling for a No vote. The US says the flood of money is to counter alleged “Russian influence”, but a more straightforward explanation is Washington is actually the foreign power doing the influencing by railroading the Yes vote.

Moscow has vehemently denied any interference in the Macedonian vote, as well as all the other so-called influence campaigns, from the US to Brexit, among others.

Macedonia’s referendum is a tightly contested issue among its 2.1 million population. A US-run poll found in July that the Yes vote was backed by only 57 per cent of the electorate. Many Macedonians are opposed to the referendum’s proposal to change the name of the country to the Republic of North Macedonia, which would then pave the way to join NATO and the EU.

There is reportedly an ardent No vote campaign, with social media platforms being used to argue the case against the new name being adopted, and, secondly, of joining the US-led NATO alliance. For many citizens, the historic name “Macedonia” should stand alone, and not be amended with the qualifier “North”. They say such a move is an unacceptable deference to Greece, which also has a province bearing the same name.

In any case, it is a wild leap to attribute the No campaign in Macedonia on Russian interference. The pro-NATO prime minister Zoran Zaev has repeatedly accused Russia of meddling in the referendum. Macedonia has expelled two Russian diplomats over “meddling” claims.

The Greek government has also joined in the media allegations against Moscow.

There is a vested interest in pushing this anti-Russia narrative. If the referendum goes to the Yes camp, then Athens wins out in the long-running name dispute over Macedonia. And the pro-NATO politicians in Skopje will have won their desired objective to ingratiate themselves with Washington. By talking up allegations of “Russian malign activities”, it is calculated that Macedonians may be prompted to vote Yes out of patriotic duty.

Russia is of course opposed to Macedonia joining NATO, thereby becoming the alliance’s 30th member and signaling once again the relentless expansion of the multinational military force towards Russia’s Western borders. But to extrapolate from Moscow’s legitimate opposition to Macedonia joining NATO to claims of “interfering” in the referendum is unwarranted. There is no evidence, only the usual surfeit of innuendo and Russophobia.

From Steve Bannon’s open declaration of “political warfare” against the European Union and James Mattis’ dictate to Macedonians to vote for NATO membership, the level of outright American meddling in Europe’s politics is off-the-scale when compared with anything that Russia is accused of, even if the latter had some basis, which is doesn’t.

For American interference in other democracies, there is nothing new either. Recall how one of the American CIA’s first foreign projects was to buy the elections in postwar Italy to defeat the emerging Communists. Fast forward to how Washington actually reveled in its interference in Russia’s 1996 election for Boris Yeltsin.

America has relentlessly meddled in scores of countries to determine election outcomes. Bannon and Mattis are but the latest brazen expression of US malign activity.

Against the backdrop of baseless allegations against Russia, this in-your-face American hypocrisy and hubris is something to behold.

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Glyphosate, the world’s most common weed killer, has caused significant concerns over its potential risk to human health, animals, and the environment for several decades. Earlier this month, a US court awarded a groundskeeper $289 million who claimed Bayer AG unit Monsanto’s glyphosate-based weed-killers, including Roundup, gave him terminal cancer.

Now, a new report from PNAS alleges that glyphosate may be indirectly killing honey bees around the world, a threat that could potentially also leave a major mark on the global economy.

Brandnew research from The University of Texas at Austin shows that bees exposed to glyphosate, the active ingredient in Roundup, lose critical bacterial in their guts and are more susceptible to infection and death from harmful bacteria.

The report titled “Glyphosate perturbs the gut microbiota of honey bees,” was published in the Proceedings of the National Academy of Sciences of the United States of America (PNAS) on September 24. It provides enough evidence that glyphosate could be seen as the contributing factor to the rapid decline of honey bees around the world, otherwise known as Colony Collapse Disorder (CCD), a phenomenon that occurs when the majority of worker bees in a colony disappear and leave behind the queen.

“We need better guidelines for glyphosate use, especially regarding bee exposure, because right now the guidelines assume bees are not harmed by the herbicide,” said Erick Motta, the graduate student who led the research, along with professor Nancy Moran.

“Our study shows that’s not true.”

UT News of The University of Texas at Austin says that glyphosate interferes with an important enzyme found in plants and microorganisms, but not in animals, it has long been assumed to be nontoxic to animals, including humans and bees. However, the latest study reveals that by altering a bee’s gut microbiome — the ecosystem of bacteria living in the bee’s digestive tract, including those that protect it from harmful bacteria — glyphosate jeopardizes its ability to fight infection.

For this study, scientists exposed honeybees to glyphosate at normal levels found on farms. The researchers painted the bees’ backs with colored dots so they could be tracked and later recaptured. Three days later, they saw that the honeybees exposed to glyphosate suffered a significant loss of bacteria in their guts and were more susceptible to infection and death from harmful bacteria.

“Studies in humans, bees and other animals have shown that the gut microbiome is a stable community that resists infection by opportunistic invaders,” Moran said. “So if you disrupt the normal, stable community, you are more susceptible to this invasion of pathogens.”

In recent times, US beekeepers have reported a massive loss of bees or CCD. Millions of bees mysteriously disappeared, leaving farms with fewer pollinators for crops. Officials have been baffled, and the media has been quite about the bee population collapse. Explanations for the phenomenon have included exposure to pesticides or antibiotics, habitat loss, and bacterial infections. The latest study now adds herbicides to the list as a possible contributing factor.

“It’s not the only thing causing all these bee deaths, but it is definitely something people should worry about because glyphosate is used everywhere,” said Motta.

And that, researchers, believe, is evidence that glyphosate might be contributing to the collapse of honeybees around the world.

The Western honeybee, the world’s premier pollinator species, has been in high demand for its services on fruit, nut, and vegetable farmers.

Among the nuts, almond growers have the largest need for bee pollination. Bee pollination is worth $15 billion to the US farming industry.

Any sharp change in global bee populations could affect the beef and dairy industries. Bees pollinate clover, hay, and other forage crops. As the bee population dwindles, it increases the cost of feedstock. That forces inflation into beef and milk prices at the grocery store and ultimately hurts the American consumer. This could then lead to increased imports of produce from foreign countries where bee populations are healthy, further widening the trade deficit. Couple this with the current trade war and this particular “black swan” – or rather “black bee” – problem, may be just the tipping point that finally forces the US economy to catch down to the rest of the world.

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Authored by Gordon Chang via The Gatestone Institute,

• Throughout his visit to North Korea, South Korean President Moon Jae-in went out of his way to downplay the legitimacy of the government he leads and the country he was elected to represent. He was not asserting South Korea’s right to exist.

• Up to now, the South’s textbooks have stated that Seoul is “the only legitimate government on the Korean Peninsula.” New textbooks, however, do not include that declaration.

• Moon, unfortunately, has undermined democracy in tangible ways. Since becoming president in May of last year, he has used control of big broadcasters to reduce access to dissenting views and to promote North Korea’s. Alarm is now widespread.

• If all this were not enough, Moon is taking down defenses along invasion and infiltration routes into Seoul and proposing substantial reductions in the South Korean military. Americans should care because by treaty they are obligated to defend the South.

North Korean leader Kim Jong Un (right) guides South Korean President Moon Jae-in during his visit in Pyongyang, North Korea, September 18, 2018. (Photo by Pyeongyang Press Corps/Pool/Getty Images)

Kim Jong Un assembled a reported 100,000 people, many waving his North Korean flag or the blue-and-white unification standard, to greet Moon Jae-in, the president of South Korea, as he arrived in Pyongyang on September 18.

President Moon did not seem to mind that no one was holding the symbol of his country, the Republic of Korea.

“What was glaringly missing was the South Korean flag,” Taro O of the Pacific Forum told Gatestone in e-mailed comments. “Maybe South Korean people take comfort in seeing that Samsung’s Lee Jae-yong wore the South Korean flag badge on the lapel of his jacket while in North Korea. No one in the Moon administration did.“

Nor did Moon himself. In fact, throughout the trip Moon went out of his way to downplay the legitimacy of the government he leads and the country he was elected to represent. As Ms. O observed, Moon on the trip often used “nam cheuk,” literally “south side” or “south,” when the custom has been for South Korean leaders to say “Hanguk,” literally “country of Han people.” Similarly, Moon while in the North said “nam cheuk gookmin.” That translates as “south side citizens.” South Korean presidents would normally use “uri gookmin,” literally “our citizens” and figuratively “my citizens.”

In contrast, Kim Jong Un did not reciprocate Moon’s rhetorical gestures. During Moon’s visit, he used the communist term “uri inmin,” “our people” or “my people.”

Kim’s Democratic People’s Republic of Korea does not recognize Moon’s Republic of Korea as sovereign. Similarly, South Korea does not recognize the North. Moon’s choice of terms signaled — subtly but significantly — he was not asserting South Korea’s right to exist.

Moon obviously wants to change Seoul’s core position, which it has maintained since the founding of the South Korean state in August 1948. His Ministry of Education, disturbingly, has already changed textbooks. Up to now, the South’s textbooks have stated that Seoul is “the only legitimate government on the Korean Peninsula.” New textbooks, however, do not include that declaration. And, as Ms. O points out, the South’s Unification Ministry has also deleted the critical phrase from training materials.

To pave the way for unification, Moon’s long-cherished goal, he has also tried to make the South more compatible with Kim’s horrific state. Most fundamentally, his Democratic Party of Korea led an attempt to remove the notion of “liberal”from the concept of “democratic” in the constitution.

Fortunately, the South’s “conservatives” rebuffed the effort, but the Education Ministry in June tried to change the country’s textbooks, proposing to describe the nation’s political system as just “democracy.” The ministry had to relent, permitting the concept of freedom to be included in the materials.

Moreover, Moon’s government has given only a lukewarm endorsement to the South’s National Community Unification Formula, which affirms that a unified state should be a liberal democracy. Since September 1989, every South Korean president has backed the document as official policy.

The Kim regime in the north rejects the label “liberal” but maintains it too is “democratic,” so Moon’s various changes would have reduced a high barrier to the union of the two Koreas.

President Moon, unfortunately, has undermined democracy in tangible ways. Since becoming president in May of last year, he has used control of big broadcasters to reduce access to dissenting views and to promote North Korea’s. “An American expert recently visiting [South] Korea was warned by a state-funded media outlet to avoid any remarks critical of Moon’s approach to North Korea,” Lawrence Peck, a leading expert on pro-North Korea activities in the U.S., told Gatestone this month.

Now, Moon’s government is going after free expression on social media. Minjoo, as Moon’s party is known, is behind a “broadcast law reform” bill, which if enacted will give the government the right to take down YouTube videos it does not like. “YouTube remains the only open venue for those Koreans who want to safeguard their country as a democratic republic,” writes In-ho Lee, a former South Korean diplomat and once president of the Korea Foundation, in e-mail comments.

Is South Korea becoming North Korea? It is certainly moving in that direction. Its leader, in Peck’s words, “attempts to stifle dissent, both under color of law and by unofficial and more subtle forms of pressure.” A favorite tactic has been, as he explains, “extremely dubious criminal defamation charges against critics.” Moreover, the South Korean government is pressuring North Korean defectors to keep quiet about the North.

Conservative voices, Peck says, are being “persecuted, censored, fired, prosecuted, pressured, or otherwise retaliated against or harassed.”

And they are not the only ones targeted. Moon has created an atmosphere where pro-North Korea elements are waging what Lee calls “a reign of terror.” In the terror, these forces feel free not only to speak but also to deny freedom to others. The North’s radical proponents now hold rallies urging the arrest of “scum” — those who have escaped from the North to live in the South. Moreover, radicals have put up in Seoul wanted posters naming two defectors, asking citizens to report on their whereabouts. Because the pair is believed to be targeted by Pyongyang for assassination, the posters put their lives in danger.

It is not clear whether “free democracy” is “currently on the verge of a collapse,” as charged in the September 4 Statement of the Congress of the Republic of Korea on the National Emergency on the Situations that Face the Nation, but alarm is now widespread.

If all this were not enough, Moon is taking down defenses along invasion and infiltration routes into Seoul and proposing substantial reductions in the South Korean military. Americans should care because by treaty they are obligated to defend the South, which for decades has anchored their western defense perimeter.

Many speculate as to Moon’s motives, but, whatever his intentions, he has kept as senior advisors those who, as members of the so-called juchesasangpa groups, advocated North Korea’s juche self-reliance ideology and have refused to disavow their views to this day. And to this day concerns continue to swirl around Im Jong-seok, Moon’s radical chief of staff. Moon, according to Peck, has continued to hire far-left advisors.

Therefore, Moon’s refusal to insist that the North Koreans fly his country’s flag, something a host country would do as standard diplomatic protocol, is deeply troubling. As David Maxwell of the Foundation for Defense of Democracies notes, the North continually attempts to undermine South Korea with “subversion, coercion, and use of force.”

And now, Kim appears to have recruited a sympathizer, Moon Jae-in.

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The Norwegian power trader who got caught on the losing end of a 4-sigma move in price spreads is being forced into bankruptcy after liquidating his entire estate. But in the US, two ex-JPM traders who wracked up comparably massive losses have managed to walk away, leaving the end-users and distributors on one of America’s largest energy grids holding the bag.

BusinessWeek on Tuesday published a story about GreenHat Energy LLC, an ill-fated power speculator that bought a sizable position in long-dated financial transmission rights. FTRs, as they’re more widely known, are an obscure power derivative designed to allow distributors to hedge against sudden spike in transmission costs when parts of the grid are temporarily taken offline (due to inclement weather or some other hazard). Houston-based Greenhat opened the positions via PJM Interconnection LLC, which oversees a wholesale electric grid serving 65 million people between Chicago and Washington, DC.

They are used in deregulated power markets to help energy buyers, generators, and distributors protect against localized price swings. Bottlenecks can sometimes form on the power grid—such as during an ice storm or when a plant goes down—creating what are known as congestion costs. Using an FTR, a big power buyer can get paid when congestion costs rise, offsetting its risk. But it might also end up owing money if there isn’t congestion.

Financial players can buy FTRs, too. Much of GreenHat’s portfolio was “long-dated”—meaning it was betting on transmission-line congestion patterns that wouldn’t start until June 2018. And based on historical patterns, most of those positions initially looked like smart moves, according to PJM. That likelihood of success brought a side benefit to GreenHat: Under PJM rules at the time, it could keep building up its portfolio without having to put up much money as collateral. But GreenHat would have to pay if congestion patterns turned out to differ widely from those in the past.

GreenHat opened its FTR position in 2015. By April 2016, the first signs of a problem had emerged. Around that time, another trader on PJM known as DC energy, one of the largest buyers of FTRs, complained to PJM about rival portfolios with no collateral attached.When PJM approached GreenHat, one of its partners, Andrew Kittell said his firm had offsetting contracts that would pay out more than $62 million should their FTR bet turn sour. PJM mentioned this in one of its filings to the Federal Energy Regulatory Commission.

But as it turns out, that was a lie. Two years later, Greenhat’s position was in bad shape, thanks to renovations to transmission lines that reduced congestion. However, instead of cutting their losses, the Greenhat traders doubled down.

By spring 2018, GreenHat’s bets were looking bad. Upgrades had taken place to transmission lines across the Eastern U.S. that promised to lessen congestion on the grid. But instead of closing out its doomed positions, GreenHat did the opposite and doubled down. It bought additional hedges that expanded its PJM portfolio by almost half—while also serving to keep the company’s collateral requirements very low.

When their collateral cushion finally ran out, PJM sent the firm an invoice for $1.2 million that it never paid. Its position was soon declared in default. But since the power exchange lacks a coherent clearing mechanism to absorb the losses of traders who default, PJM was forced to spread the tab around to its other clients – i.e. the rest of us (virtually everybody who uses electricity connected to that grid will pay some of GreenHat’s bill in the form of higher electricity prices).

On June 5, GreenHat received an invoice from PJM for $1.2 million to cover losses. It didn’t pay. On June 21, PJM declared GreenHat in default. Losses have continued to mount, according to PJM. The portfolio has more hedges that will probably keep losing money for three years, though it’s impossible to say exactly how much because of changing conditions with transmission lines. And that third party that GreenHat promised would cover losses? The unnamed entity told PJM that it doesn’t owe the firm anything, according to the PJM filing.

Now, members are debating whether changes promised by PJM will be enough to avoid something like this happening again in the future, while some smaller companies relying on PJM’s transmission lines will need to pay about $10,000.

Since GreenHat isn’t paying for its losing bets, that leaves it for fellow PJM market participants to pick up the tab. Some are now in a debate about how to unwind the positions—book the losses now or let the bets run their course. In the meantime, PJM has begun to charge its thousand or so members, companies that use the transmission lines to move electricity or for other purposes. Smaller businesses have to pay about $10,000, while big, active PJM participants, including the likes of Exelon Corp. and American Electric Power Co., will need to absorb the rest. Members are also debating whether several changes adopted by PJM will be enough to prevent a similar incident. PJM said in a statement that it’s investigating the situation and its options for legal action.

Meanwhile, Kittell and John Bartholomew, the traders behind GreenHat, sought to distance themselves from company. By the summer of 2018, Kittell and Bartholomew were making no mention of GreenHat on their LinkedIn profiles. In fact – aside from a negative article about their behavior published in BusinessWeek – the two have walked away with relatively few consequences. 

GreenHat “can easily walk away and leave other people holding the bag,” said Susan Bruce, an attorney who represents the group PJM Industrial Customer Coalition. “Large steel mills, large manufacturers, your mom and pop dry cleaners – they’re going to pay a portion of this default. Everyone else is holding the bag.”

Before taking on GreenHat as a customer, PJM should have probably done some more due diligence. Both Bartholomew and Kittell were involved in a high-profile scandal involving allegations that they helped manipulate wholesale power markets back when they were both traders at JPM. The bank ended up paying roughly $400 million in fines and penalties related to the scandal.

It’s a story that’s not uncommon in modern markets: Traders take massive risks with investors’ money, and, when the risks pan out, they gladly claim their rewards in the form of massive fees. When they don’t, traders can simply walk away.

“The whole thing is a mess and a disaster,” said an employee at a retail energy distributor that uses PJM’s grid. “GreenHat was allowed to take a very large position that may have made economic sense at one point. But like everybody else, they were probably hoping to hit the jackpot, and they didn’t.”

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Authored by Robert Gore via Straight Line Logic blog,

What happens when most of your military infrastructure is suddenly obsolete?

The emperor was the last to realize he was naked. This is not unusual, emperors are the last to find out anything. Who has the fortitude to tell them the truth, especially an upsetting truth? And so it is with the US’s empire, the existence of which most of its citizens, media organs, and officials are unaware or won’t acknowledge. The truth is, the American empire, acknowledged or not, is over. It will be years before that’s accepted by the governing class. They’ll never officially inform their subjects, who are stuck with the tab for its immensely wasteful spending.

Empires are built on military strength. The American empire was no exception. Many Americans still think the US military enjoys the dominance it had back in 1946, a notion Vladimir Putin buried March 1. On that date he announced new weaponry which will render our naval surface fleet, ground forces, worldwide bases, and antiballistic systems obsolete (see here, here, and here). The US military leadership has grudgingly acknowledged many of Putin’s claims.

The unmistakable conclusion: most US military spending is the welfare state with epaulets. It pays for weapons, bases, and personnel whose uselessness would be revealed within half an hour after a non-nuclear war with Russia began. We have no conventional defenses against Russia’s new weaponry.

It’s cold comfort that US land installation, submarine, and airborne nuclear deterrents are still relevant. If Russia or anyone else launched a conventional or nuclear attack against us, we can annihilate the aggressor. The destruction we bore would be matched in kind, but the planet might be rendered uninhabitable.

Fortunately, it can be said with 99 percent certainty that Russia has no desire to launch a war, nuclear or conventional, against the US. That nation wants what many nations and US citizens want: for the US government to leave it alone. Although spending only 10 percent of what the US does on its military and intelligence, Russia now has the muscle to back it up. The Chinese are right behind.

The story doesn’t say what happened to the emperor and his courtiers after the lad revealed his nudity, but we can assume the emperor’s smarter toadies started heading for the exits. Why stay on a vessel that can’t navigate the shoals of reality?

Welfare states—giving money to people who haven’t earned it—so inevitably lead to corruption that they might as well be synonyms. For years the US has bought compliance with its dictates within its confederated empire, picking up the lion’s share of the defense tab. Nations hosting US military bases welcome the jobs and spending just like congressional districts back home.

Even before Putin’s March 1 announcement, asking how non-nuclear bases, domestic and abroad, actually made anyone in the US safer occasioned awkward silence. Russia’s military spending and economy are dwarfed by the US’s and its EU protectorate’s; a Russian invasion of Europe, even with its new weapons, would be suicidal. The chances of Russia or any other nation invading the US are even more remote. Russia has been invaded far more often than it has invaded, and other than securing its own neighborhood, exhibits no desire to launch offensive warfare. Putin stressed the new weapons’ role defensive role.

After the announcement, US bases will be targets, the personnel they house hostages. That includes the mobile bases known as the US surface fleet, from aircraft carriers on down. They have no defense against the Kinzhal (Dagger) hypersonic missile, aircraft-launched with a range of 2000 kilometers, capable of reaching Mach 10.

Defending on sea or land against the Russians’ new nuclear powered cruise missiles—which have essentially unlimited range—is possible but problematic, especially if they’re launched in a swarm. Location has become irrelevant. It doesn’t matter if the US outpost is in Germany, Texas, or floating in the middle of the Pacific, they’re all vulnerable.

Poland’s recent proposal for the US to establish a military base there, at Poland’s expense, possibly to be named Fort Trump, is a strong contender for the year’s, perhaps the decade’s, most insane idea. Fort Courage, from the zany F Troop TV show, would be a more appropriate name. It’s one thing to hop on the US military spending gravy train, that’s just venal and corrupt. To install a useless military base and pay for it as well is incalculably stupid. The goal of politics is to get someone else to pay for your stupid ideas, but perhaps they do politics differently in Poland.

If you’re running one of the US’s protectorates, why should you accept the empire’s dictates when it can no longer defend your country? The question has added piquancy in Europe. Setting aside Russia’s new weapons, how would a country that’s botched military engagements in second string nations like Vietnam, Iraq, Afghanistan, and Syria defend Europe short of nuclear war? If the answer is that it can’t, where does US leverage come from? The US demands more useless defense spending and presses Europe to curtail or cease profitable trade relations with Russia and Iran, both of which pose a minimal threat to Europe’s safety. Why should Europe comply?

President Trump has questioned the US subsidization of Europe’s defense. How much effort would the US make to defend Macedonia or Latvia? If the answer is not much, or if it can’t actually protect those or any other European country, then subsidies are the only “glue” for the American Empire, European division. It’s unclear if Trump realizes he can’t have his cake and eat it too. He may be happy to see Europe come unglued. Bankruptcy looms; the US has to start cutting spending somewhere.

It should come as no surprise that some countries aren’t toeing the US line, faithfully parroted by the EU.

Turkey, straddling Europe and Asia, is edging toward Russia and China, and the goodies promised by their Belt and Road Initiative.

Hungary’s Prime Minister Victor Orban and Italy’s Interior Minister Matteo Salvini, head of the League party that shares power there, are seeking better relations with Russia, notwithstanding the US and Europe’s long running demonization of Vladimir Putin. Those two are also challenging received wisdom on the desirability of open borders and unlimited immigration. They and other nationalist leaders are finding an increasingly receptive audience among Europe’s voters.

The two Koreas are also writing their own script, one that diverges from the one the US has written for them since the end of the Korean War in 1953. Among those who favor the status quo, the line is that impoverished albeit nuclear-armed North Korea poses an offensive threat to South Korea, Japan, and the US. Kim Jong Un is singing a beguiling song of denuclearization, rapprochement, trade, and peace, but he’s not to be trusted. Only if he agrees beforehand to the complete subjugation of his country can negotiations proceed.

South Korean President Moon Jae-in has other ideas. The people of both Koreas want reconciliation and an end to the war (there’s an armistice but no official peace). Moon appears willing to entertain the possibility that Kim would rather bring his country into the 21st century than launch nuclear strikes. The impetus for negotiations has come from these two leaders and Trump has jumped on the bandwagon, much to the consternation of a motley collection of swamp denizens who profit from current arrangements. Peace may come in spite of their efforts to prevent it.

As the US government continues to spend money for weapons, bases, and personnel our putative enemy can obliterate, defend countries that are under no threat, and intervene in conflicts that promise only interminable stalemate and lost blood and treasure, the question presents itself: are those running the empire and its satrapies stupid, rapaciously corrupt, evil, or all of the above? We’ll take the obvious: all of the above.

Those who have placed their safety in the hands of the US’s would-be emperors can no longer afford to ignore the emperors’ nudity… and insanity. The empire is fraying at the edges and it won’t be long before fraying becomes unraveling. Nobody respects a naked emperor, certainly not one who doesn’t even realize he’s naked.

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Trump’s fears that rising gasoline prices will impact consumer behavior have come true.

The volume of traffic on U.S. highways has stopped growing, alongside gasoline consumption, as rising prices are starting to curb driving behavior, a new analysis by Reuters’ energy analyst John Kemp shows. Traffic volumes in July were 0.3% lower than a year earlier, after seasonal adjustments, the latest Federal Highway Administration data showed.

Traffic growth has been negative in two months so far this year, the first readings sub-zero prints since the start of 2014.  Meanwhile volumes were up by less than 0.3% in the three months from May to July compared with the same period a year earlier, down from annual growth of 2-3% throughout 2015 and 2016.

It will come as no surprise that there has been a correlation between traffic volumes and the cyclical rise and fall in oil and gasoline prices since at least the early 1990s. While traffic volume dropped in 2013 and again in mid-2014, the sharp decline in oil prices between the middle of 2014 and early 2016 provided a tremendous boost to vehicle use.

But as oil prices have recovered over the last 30 months, that stimulus has faded and traffic growth has once again slowed to a crawl, and in fact turned negative. The reason: the average cost of gasoline purchased by U.S. motorists surged by more than 55% between February 2016 and September 2018.

Separate data on gasoline consumption showed a similar plateau as higher prices encourage motorists to limit fuel use. Gasoline consumption rose by just 18,000 barrels per day in the first half of 2018 compared with the same period a year earlier, despite strong economic growth and substantial job creation.

Looking ahead, and assuming no material change in gas prices, the U.S. Energy Information Administration predicts consumption will decline by around 10,000 barrels per day this year.

Meanwhile, if oil prices continue to rise over the next 12 months, as many traders and hedge funds expect, traffic volumes and gasoline consumption are both likely to turn increasingly negative.

But what is most worrisome, is that the flattening of U.S. gasoline consumption resembles the run up to oil price peaks in 2007/08, 2011/12 and the first half of 2014.

And while it would be difficult to extrapolate broad economic conclusions from these observations, John Kemp points out that in each case, the flattening of U.S. gasoline consumption preceded a sharp downward move in international oil prices after the market overheated.

Considering that many analysts and trader are increasingly open to the idea of a $100/barrel superspike in prices if the bulk of Iran oil exports are taken off the market, a sudden spike in gasoline prices may be just the straw that breaks the camel’s back of the US consumer, who while extremely confident, is increasingly forced to pick between filling up the car and spending money on other discretionary, or staple, purchases.

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