Month: May 2024

US cash markets may be closed for holiday, but index futures continue trading; even so, however, they have barely budged as futures kept to a very narrow range on Monday, as investors weighed the recent blowout results from Nvidia and overall solid earnings season against the outlook for higher-for-longer interest rates.

As of 9:30am, S&P 500 futures were unchanged at 5,320 as the VIX Index held well below its 12-month average, and fast approaching its record lows set in 2017.  The market rallied on Friday, with the tech-heavy Nasdaq 100 jumping 1% to a fresh record.

With global liquidity dumping late last week as the latest must-read Goldman weekly note showed…

… and significantly restrained by holidays on both sides of the Atlantic, the US derivatives market is taking a breather as traders assess whether the recent gains are sustainable. So far, investors have focused on the hype around artificial intelligence, while disregarding risks that the Fed will further delay its pivot to monetary easing.

Meanwhile, as Bloomberg writes this morning, the concentration on the Magnificent 7 technology stocks, already at a record high, “is expected to remain sticky” because of their strong balance sheets, faster earnings growth, and extraordinary shareholder remuneration, according to Chiara Robba, head of LDI Equity at Generali Asset Management. Still, investors are now beginning to differentiate between the big tech names, she said in a note.

“If we have seen some catch up of performance of other stock, the market is still concentrated on the seven for their superior EPS growth expected,” she wrote. “The Magnificent 7 will continue to outperform the rest of the market growth, but with a possible three speed: Nvidia continuing to be on the podium, a big chunk of companies in the middle, and Tesla possibly lagging behind.”

Unlike the US, European stocks were open, but were largely flat on a light trading day with markets in the UK and US closed for holidays. The Stoxx 600 Index traded 0.1% higher as of 1:10 p.m. in London, with auto and energy stocks faring best, while banks and technology shares were the biggest decliners.

Among individual movers, EFG International AG rallied 4.6% following a Bloomberg news report after the market close Friday that Julius Baer Group Ltd. is exploring a potential acquisition of its rival Swiss private bank. Julius Baer slipped 0.8%.

Europe’s better-than-feared earnings season has provided support for an historic stock rally, but investors’ focus may now shift to a still-uncertain macro picture. The advance in equities also slowed as questions over the pace and extent of interest rate cuts mounted.

“Given the recent positive economic surprises in Europe and China, we remain positive on European equities, with relatively low positioning in Europe from international investors,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg.

Meanwhile, investors are keeping a close eye on comments from European Central Bank officials as they assess the prospects for monetary policy after a widely telegraphed start to easing at the next ECB meeting in June.

The ECB shouldn’t rule out lowering borrowing costs at both its June and July meetings, Governing Council member Francois Villeroy de Galhau said Monday — pushing back against other monetary officials who are uncomfortable with the idea of consecutive cuts.

In Germany, the business outlook rose for a fourth month as confidence builds that the country’s economic rebound will strengthen over the rest of the year.

Earlier in the session,  Asian shipping stocks including China’s Cosco Shipping and South Korea’s HMM rise as rates increase amid market tightness due to factors including Red Sea disruptions.

“Red Sea disruptions have delayed the arrival of the downcycle,” Morgan Stanley analysts including Qianlei Fan and Tenny Song write in a note. “Supply-side risks are accumulating but in the short term are digested by re-routing and strong demand”
Upgrades Cosco Shipping and Orient Overseas to equal-weight from underweight on upside risks to earnings and cash dividends.

In FX, the dollar edges lower amid low trading volumes, with the Treasury market in Japan closed for a US public holiday.  USD/JPY falls to remain below 157 while EUR/USD hovers near mid 1.08-1.09. GBP/USD is steady to hold under last week’s high of 1.2761. AUD/USD edges up toward mid 0.66-0.67.

Treasury futures are little changed amid muted trading volumes with cash markets in Japan closed for a US public holiday. In Friday’s US trading session, 2-year yields rose 1bp to 4.95% while 10-year ended down 1bp to 4.67%

The biggest mover overnight is ethereum which is up more than 2% as excitement builds over last week’s “shock” approval of the spot ETF.

The push for public acceptance of trans athletes has been relentless for the past few years.  The agenda has been forced to the forefront of western social discourse despite the fact that the majority of people polled believe trans athletes should not be allowed to compete outside of their biological sex.  In other words, men pretending to be women should not be allowed to compete with real women because of their inherent physical advantages.  

It seems like common sense, but today we live in a world where common sense is under attack.  The International Olympic Committee has joined in the program to promote trans propaganda, first with their removal of testing restrictions on trans competitors.  For the 2024 Olympic Games trans athletes will no longer be required to undergo testing to prove they are using hormone treatments or procedures to transition.  This means any man can simply claim he is a “trans woman” and compete in most women’s categories.  Only 10 out of 48 sports categories at the Paris Summer Olympics will have rules against trans competitors. 

Numerous sports associations worldwide have begun to tighten rules regulating trans participation, but the Olympics seems to be going in the opposite direction.

Women athletes and many critics argue that these policies will destroy female sports by flooding the arena with biological men.  We have already seen an array of women’s competitions dominated by male participants over the years and many female athletes losing out on scholarships.  Over 70% of Americans want trans athletes to be restricted to their biological sex.  Over 70% of female athletes in the UK want the same.  Polling in Europe is more difficult, at least 14 countries have strict hate speech laws which could be used against anyone criticizing the trans movement.     

To further alienate the public, the Paris Olympics featured three drag queens carrying the Olympic torch this year.  The torchbearers are chosen by the Olympic sponsors and organizers, usually because they have made a significant contribution to their community and because they personify the theme of that Olympics.  The theme of the Paris Olympics is:  “Games Wide Open”

One drag queen going by the moniker “Miss Martini” was even sponsored by Coca Cola.

For now it appears that the pendulum is swinging against the trans agenda in sports and it’s hard to say if any organization, even one with massive global reach like the Olympics, is going to convince the populace that men pretending to be women and crushing women’s sports is a normal thing.

Despite the criticism, Paris Mayor Anne Hidalgo has reaffirmed her full support for the drag torch bearers, stating: “I’ll say it again: I am proud and, yes, Paris is proud that a drag queen will carry the torch and the values of peace and humanity.”

But pride is a weakness, not a virtue.

Sports are supposed to be the most refined representation of meritocracy on am even playing field.  Accomplishment is not supposed to be won through identity, nepotism or fraud.  There is the arena, there is the competition, and only one group or person can be at the top based on fair play.  The invasion of woke politics into the sporting world symbolizes more than just a LGBT propaganda campaign, it’s a subversive war on merit and the realities of biology.    

By Garfield Reynolds, Bloomberg Markets Live reporter and strategist

Surging commodity prices are threatening to bring inflation back through a door that investors thought central banks had slammed shut. That’s bringing yields higher, but the structural boost to fiscal spending that is helping drive demand for raw materials threatens to create a vicious circle for bond investors assuming that 2023 marked the start of a fresh bull run.

USDJPY spikes with rising yields as market realizes that surging commodities are, in fact, inflationary https://t.co/gVYq914z0i

— zerohedge (@zerohedge) May 20, 2024

Commodities this year already erased much of 2023’s declines, perhaps the most obvious sign that the steepest global interest-rate hikes in a generation failed to substantially slow down the world economy. Little wonder that’s accompanied a serious reversal in bets on rapid monetary easing, but investors should be facing up to the potential that any rate cuts that do come will be late and shallow.

Economists are again being forced to boost growth forecasts. I looked at the evolution of forecasts for developed-world GDP going back to 2016, in each case looking at projections for the then-current year and running through to late May. Both 2023 and 2024 saw the most rapid upgrades in developed-world GDP estimates over the past decade, outside 2021’s pandemic-stimulus-inspired surge. The shift in forecasting by May for each of those years sustained through to the end, except for 2018, when analysts’ initial optimism unwound in the face of Fed hikes plus trade wars.

The regularity with which a range of raw materials has spiked higher this year underscores the way that markets underestimated demand across the global economy.

Onshoring, the green transition and increased defense spending all require more raw materials, and they are all also price-inelastic to at least some degree. China’s demand for such things has held up surprisingly well even as its imploding real estate sector hamstrings economic growth — but then it is engaged in a truly massive effort to switch to renewables for power generation.

It is also among the many that are boosting military spending, after the post-Covid world fully fractured the ever-closer globalization that first started to crack with Trump-era tariffs. The switch back toward a multipolar world also adds to commodities-driven inflation via supply shocks, like the reduction from Russia and Ukraine of various classes of raw materials and tensions in the Middle East.

The reflationary impact of commodities driven by these trends helps explain the pivot toward hawkish holds across key central banks this month. And increased government spending — actual and potential — underscores the upside skew for yields.

The continuing supply shock for bond markets is the bulging pipeline of issuance. Even if demand from aging savers is able to absorb the extra debt — and there are those who are turning toward stocks, gold or even crypto instead — more bonds will mean a higher floor for yields absent savage recessions.

While there are signs of soft patches across most economies, central banks are mostly insistent they can achieve something close to the soft landing they are aiming for. Add in all that fiscal largess, and the best bonds can hope for is to avoid outcomes that lead to fresh rate hikes.

Authored by Tristan Greene via CoinTelegraph.com,

Billionaire mogul Elon Musk’s xAI has plans to build a supercomputer in partnership with Oracle to power the next version of its “Grok” artificial intelligence (AI) large language model. 

According to a report from The Information, citing a presentation shown to xAI stakeholders, the project has been framed as a “Gigafactory of Compute” for training and developing the next generation of the company’s Grok AI system.

As Cointelegraph reported in April, Musk previously sought to raise $4 billion at a valuation of $15 billion for the company with follow-on commentary indicating that the funds would be used to raise its GPU count from around 10,000 to 100,000.

Shortly thereafter, it was reported that Musk raised the goal to raise $6 billion at a valuation of $18 billion due to high investor interest.

If The Information’s information is correct, and if xAI intends to build a supercomputer, it’s likely the funds will be used to turn the 100,000 GPU cluster into a unified supercomputer architecture — or a “Gigafactory of Compute,” as xAI puts it, a reference to certain Tesla factories dubbed “Gigafactories.”

These moves come as Musk has begun raising expectations around the company’s capabilities and progress towards its ultimate goal of building an AI capable of surpassing human cognitive abilities.

Speaking to event goers at the VivaTech 2024 conference in Paris, Musk said that he believed xAI would catch up to industry leaders OpenAI and DeepMind Google by the end of 2024.

He went on to say that he believed an AI system would be capable of doing everything better than humans by the end of 2025.

According to Musk, the world’s richest person, such a system would be capable of supplanting all human employment, leaving us to question our purpose. As he put it, “if the computer and robots can do everything better than you, does your life have meaning?”

Musk did concede that, perhaps, our role in the future will be to “give AI meaning.”

Over the weekend NATO Secretary-General Jens Stoltenberg backed growing calls within the alliance to allow Ukraine to strike inside Russian territory using Western-supplied weapons.

While this has without doubt already happened, especially in Crimea and utilizing UK missiles in particular, the Biden administration has on a public level at least maintained its prohibition against Kiev launching such attacks using US-made missile systems.

But the NATO chief in an interview with The Economist said “The time has come for allies to consider whether they should lift some of the restrictions they have imposed on weapons donated to Ukraine.”

“To deny Ukraine the possibility of using these weapons against legitimate military targets on Russian territory makes it very hard for them to defend themselves,” Stoltenberg added.

He did not mention the United States by name, but the provocative statements came days after US House Speaker Mike Johnson spoke out against the White House’s current prohibition. As things get more desperate for Ukrainian forces along collapsing front line positions, the hawks are urging a more muscular approach.

Speaker Johnson told Voice of America Wednesday that Washington attempting to “micromanage” Ukraine’s defense “is not good policy for us.”

He then said, “I think we need to allow Ukraine to prosecute the war the way they see fit,” emphasizing “They need to be able to fight back.”

In Kharkiv oblast, for example, where Russia is in the midst of a major new offensive to push the border back, Russian artillery is pummeling Ukraine forces from across the border.

I remember this magazine being overly excited about the prospect of this war https://t.co/5s4zR0PDji

— Leonid ХВ Ragozin (@leonidragozin) May 25, 2024

While Ukraine has been launching drone and mortar attacks on the Belgorod region for months, it wants to more openly use long-range missile like the US ATACMS, with a 190-mile maximum range, to hit back harder.

The Kremlin has continued to threaten to attack any Western supplied weaponry or even NATO personnel wherever they might appear on the battlefield. Estonia has been the latest to openly call for placing Western troops in “rear” positions in Ukraine, following French President Macron’s urging the alliance to be open to sending troops.

Authored by Alex Kimani via OilPrice.com,

• The London School of Hygiene and Tropical Medicine has found that pedestrians are twice as likely to be hit by an electric or hybrid car than by a gasoline- or diesel-powered vehicle.

• The scientists have hypothesized that the relatively quiet operations of an electric vehicle as well as high pedestrian density in noisy urban areas could be major reasons.

• The study uncovered a pedestrian casualty rate of 5.16 per 100 million miles driven for electric and hybrid vehicles, more than double the 2.4 per 100 million miles recorded for traditional gasoline-powered cars.

For years, the transition from ICE vehicles to EVs has been viewed as a critical element of reducing the more than seven billion metric tons of carbon dioxide (GtCO?) the global transport sector emits each year. The Biden-Harris administration has set an ambitious goal to have up to half of all new vehicle sales in the country electric by the year 2030 as part of the government’s mission to achieve a net-zero emissions economy by 2050. 

This gargantuan effort might be worth it:  A 2021 study conducted by the International Council on Clean Transportation (ICCT) comparing lifecycle emissions of ICE vs. EVs concluded that “emissions over the lifetime of average medium-size [BEVs] registered today are already lower than comparable gasoline cars by 66%–69% in Europe, 60-80% in the United States, 37%–45% in China, and 19%–34% in India.’’ 

However, as is usually the case with every technology, EVs have their drawbacks, too. 

Not only does your average EV come with a higher sticker price than a comparable gasoline car but also an EV can lose as much as 12% of its range when temperatures drop to 20 degrees, a figure that shoots up to 40% if you turn on the cabin heater.

And now researchers have come up with yet another reason why you might want to rethink trading in your gas-guzzler for a shiny new EV: electric vehicles are more accident-prone. To wit, a study conducted by lead researcher Dr. Phil J. Edwards at the London School of Hygiene and Tropical Medicine has found that pedestrians are twice as likely to be hit by an electric or hybrid car than by a gasoline- or diesel-powered vehicle.

The study uncovered a pedestrian casualty rate of 5.16 per 100 million miles driven for electric and hybrid vehicles, more than double the 2.4 per 100 million miles recorded for traditional gasoline-powered cars. Insisting that the study is not meant to bash EVs, Dr. Edwards notes that “Electric cars are definitely a thing for the future. They are a wonderful way to reduce air pollution. But we must mitigate the danger” to pedestrians. EV drivers need to be extra cautious of pedestrians,’’ he added.

The researchers have conceded that current crash statistics aren’t yet robust enough to reach scientific conclusions. However, they have hypothesized that the relatively quiet operations of an electric vehicle as well as high pedestrian density in noisy urban areas could be major reasons, with pedestrians almost three times as likely to be hit by an electric or hybrid car in these areas. Dr. Edwards suspects that demographics could also play a role, noting that “Younger, less experienced drivers are more likely to be involved in a road traffic collision and are also more likely to own an electric car.”

Driverless Cars Safer Than Human Drivers

EVs currently account for less than 1% of vehicles on U.S. roads, implying human casualties associated with the industry are still much lower compared to those attributable to the fossil fuel industry. But with bold predictions that EVs could make up 60-70% of the U.S. fleet by 2050, the significantly higher propensity of electric propulsion to cause accidents could prove highly problematic.

Luckily, there’s a handy solution: driverless cars. For years, autonomous driving buffs and experts claimed that driverless vehicles have the potential to be safer than humans. Unfortunately, those claims have remained unverified for the simple fact that there’s not enough data available. That is, until now. 

Last year, Google’s Waymo analyzed 7.13 million fully driverless miles in Phoenix, Los Angeles and San Francisco cities. Waymo touts itself as the world’s first autonomous ride-hailing service, and its cars are fully electric.  Waymo then compared the data to human driving benchmarks, marking the first time the company studied miles from fully driverless operations only, rather than a mix of autonomous and human-monitored driving.

The conclusion is very encouraging. Waymo’s driverless cars were 6.7 times less likely than human drivers to be involved in a crash resulting in an injury, good for a respectable 85% reduction over the human benchmark. These vehicles are also 2.3 times less likely to be in a police-reported crash, or a 57% reduction. Overall, this translates to ~17 fewer injuries and 20 fewer police-reported crashes compared to if a human driver would have driven the same distance in the cities where Waymo operates.

There seems to be little consensus regarding the time when autonomous vehicles will finally become an everyday reality on U.S. roads, with public distrust of autonomous driving technology a major hurdle. A Forbes Advisor report found that as many as 93% of U.S. citizens have concerns about some aspect of self-driving cars. However, the ongoing AI boom might help accelerate this technology and lower adoption timelines from decades to maybe less than a decade. 

According to Micron Technology, “AI is a critical technology required to realize autonomous driving. The extreme compute performance required for an autonomous vehicle based on AI requires an innovative memory and storage system to process and hold the vast amount of data necessary for a computer to make decisions like a human.”

Even baby steps might help make EVs safer, with one McKinsey study showing that the growing adoption of advanced driver-assistance systems (ADAS) in Europe could reduce the number of accidents by about 15% by 2030.

Authored by Mike Shedlock via MishTalk.com,

School systems complain about the rising costs of handling illegal immigrants. Here’s a spotlight on two cities, one in Massachusetts, the other Colorado.

In Stoughton, Mass., students arrive with traumatic pasts and little English. The same is happening in Denver.

The Wall Street Journal comments on The Massive Immigration Wave Hitting America’s Classrooms

Millions of migrants, most seeking asylum, have crossed the border in recent years and have been allowed to settle in the U.S. until a federal immigration judge decides their fate, a process that can take years. Among the record numbers, federal data suggest, are as many as one million children who have arrived with their families or on their own since 2021.

They are settling in cities and entering public schools around the U.S., adding financial and logistical strains in communities where they have arrived in large numbers. Districts are faced with the need for additional teachers and staff who can teach English and space for new students, often while waiting for promised supplemental federal or state funding.

Denver schools, for example, earlier this year announced a $17.5 million budget shortfall because of new migrant students.

There were recently more than 500 English learners in Stoughton schools, double the number from three years ago. The increase was fueled partly by 90 students, ranging from kindergarten to high school, placed by the state in two nearby hotels serving as homeless shelters. Many are from recently arrived Haitian migrant families.

Haitians have flocked to Massachusetts, which has an established population from the long-troubled Caribbean country.

Increased costs

Adding the 90 shelter students has cost Stoughton, which teaches a total of 3,740 students, at least $500,000 for increased staff and busing costs. The state said it has reimbursed nearly all of that money. But the lag time and uncertainty about how much would be paid back has challenged the district’s ability to plan, said Joseph Baeta, Stoughton’s superintendent.

The most immediate upfront costs this year were hiring five new staff members, including two teachers, and contracting for a bus to shuttle students to and from the hotel shelters, Baeta said. The district has gone from seven to 17 English-as-a-second-language teachers in the past five years.

Massachusetts is legally mandated to offer shelter to any family that seeks it. Migrant families recently comprised about half of the 7,477 homeless families recently living in state shelters, which are at capacity. The state since October 2022 has spent roughly $26 million to reimburse school districts for costs associated with students living in shelters.

The housing search in metro Boston, where apartments are hard to find and very pricey, could mean families who find homes eventually settle outside Stoughton. This already worries Sandla, the eighth-grader, her mother Dianise Archange said.

“She said she loves the school, so she’s asking me to please find housing around here,” Archange, 35, said through an interpreter. Sandla said her favorite subject is science and she hopes to become a pilot.

I was wondering when we would start seeing stories like this. No doubt this is happening all over the country.

In addition to rent competition, we now have crowded schools. I pity any of these kids who end up in hopeless Chicago schools.

Housing Starts

Housing Starts from Census Department, chart by Mish

Since late 2022 multi-family construction has fallen by about 50 percent. Single-family construction is up by about 25 percent. Total construction is flat.

Where Do We Put 8 Million Illegal Immigrants?

On May 23, I asked Where Do We Put 8 Million Illegal Immigrants?

Millions of immigrants keep pouring in. New residential construction has stalled and multi-family construction is in decline. Completions are rising, but is that enough housing?

Inflationary Forces

Biden’s energy policy is inflationary; student loan cancellations are inflationary; the push for union wages are inflationary; the inflation reduction act is inflationary; tariffs (both Trump and Biden are guilty) are inflationary; deficit spending is inflationary; and the need to shelter millions of migrants is inflationary.

Meanwhile, there are signs the economy is slowing. For discussion, please see Discretionary Spending Tumbles at Target, Shares Drop 10 Percent

This is not a pretty mix.

Authored by Andrew Korybko via Substack,

Polish Foreign Minister Radek Sikorski revealed in his latest interview with The Guardian that “The Americans have told the Russians that if you explode a nuke, even if it doesn’t kill anybody, we will hit all your targets [positions] in Ukraine with conventional weapons, we’ll destroy all of them. I think that’s a credible threat.”

If true, and there’s no reason to suspect that he simply made that up, then this amounts to the US playing a dangerous game of nuclear chicken with Russia.

As was explained in this analysis here about why Russia is presently undertaking tactical nuclear weapons exercises, it hopes to deter NATO from a conventional military intervention in Ukraine, barring which it wants to signal that it could resort to these arms if those forces cross the Dnieper.

From Russia’s perspective, the reportedly 100,000-strong force that NATO is preparing to invade Ukraine if its “red lines” are crossed could pose a threat to its territorial integrity if they attack its newly unified regions.

So long as they stay on the western side of the Dnieper, then there’d be no reason for Russia to countenance using tactical nuclear weapons, but they could realistically be employed in the event that they cross the river and credibly appear to be approaching that country’s new borders. In that scenario, Russia would have reason to drop them on the invading forces as a last resort out of self-defense to preemptively neutralize this threat in accordance with its nuclear doctrine.

Having brought the reader up to speed about the context within which Sikorski shared the US’ planned response to Russia potentially exploding nukes in Ukraine, it should now be easier to understand why this amounts to a dangerous game of nuclear chicken.

Essentially, the US wants Russia to stand down from its signaled intent of possibly using tactical nuclear weapons if NATO’s reportedly 100,000-strong invasion force crosses the Dnieper, which could occur if Russia achieves a military breakthrough.

If this sequence of events unfolds – the front lines collapse, NATO conventionally intervenes in Ukraine, its reportedly 100,000-strong invasion force crosses the Dnieper, Russia drops tactical nukes on them, and then the US hits all of its forces in the newly unified regions – then World War III would break out. There’s no way that Russia would sit back and let the US directly attack any target within its borders since it’ll either respond in a tit-for-tat fashion or jump to the chase by launching a nuclear first strike.

The only way to avoid this worst-case scenario is for NATO to eschew its invasion plans under any circumstances, including a potential Russian military breakthrough. If they still go through with them, however, then they should keep their forces on the western side of the Dnieper and ideally rely on a neutral mediator like India to convey to Russia that they don’t intend to cross even if they approach it. Anything less is a dangerous game of nuclear chicken that could literally provoke the apocalypse.

Protein plays a vital role in creating and maintaining every cell in our bodies.

This graphic, via Visual Capitalist’s Marcus Lu, breaks down how people in different regions of the world get their protein intake. The figures come from the UN Food and Agriculture Organization (UN FAO), accessed via Our World in Data.

The figures we present here reflect the distribution of daily protein intake across regions, with each region’s total adding up to 100%. It’s important to note that this is distinct from the actual amount of protein consumed per person, often measured in grams.

Developed Countries Have More Access to Meat and Dairy

Protein has many benefits for our bodies. It is a building block of bones, muscles, cartilage, and skin. Our hair and nails are comprised mostly of protein. It is also used to repair tissue, oxygenate the body, and make enzymes, which aid in digesting food.

People in more developed regions (like North America or Europe) get a larger share of their daily protein from meat and dairy.

When only considering meat, South America, with big producers like Brazil and Argentina, takes the lead as the most important protein source.

Meanwhile, Asia, with top fish producers China and India, leads in protein intake from seafood.

In Africa, where many developing countries in the world are located, plant protein is the most important protein source for the population.

Authored by Grzegorz Adamcczyk via ReMix News,

Norway will halt the entry of Russian citizens traveling for tourism and other “non-essential” purposes from May 29, regardless of the issuing country of their Schengen visa, the government in Oslo announced.

Exceptions may include Russian citizens traveling to visit close relatives or for work and study in Norway or the Schengen Area.

The change implies that the police can refuse entry to Russian citizens covered by the order.

“They will be deported if they attempt to cross the border. This applies both to the Storskog border checkpoint and at Norway’s external border in general,” Minister of Justice Emilie Enger Mehl announced.

The increasing threat from Russia is the reason Norway is closing its borders. European intelligence agencies have alerted their governments that Russia likely plans a series of sabotage actions in Europe, as it settles into a permanent conflict with the West, reported by the Financial Times.

According to analysts from the American Institute for the Study of War, the Russian security services are likely to ramp up sabotage operations in European countries to disrupt the influx of renewed U.S. security aid to Ukraine. They are also expected to continue hybrid operations aimed at fomenting discord in Europe ahead of the European Parliament elections scheduled for next month.

Western officials warn that Russian intelligence services plan to increase sabotage activities and other hybrid operations against NATO member states. The Norwegian Police Security Service (PST) and the Norwegian Intelligence Service (NIS) warned of an increased threat of Russian sabotage against Norwegian arms suppliers and other institutions involved in military supplies to Ukraine.

PST’s counterintelligence chief, Inger Haugland, stated that Russia plans for sabotage activities in western Norway, where there are naval bases and oil and gas infrastructure. Haugland added that, in recent times, Russian security services have used individuals who are not Russian citizens to carry out sabotage activities in Poland, Germany, and the United Kingdom.

Earlier, Torgils Lutro, head of the Norwegian police in western Norway, noted that Russian intelligence agents are operating in the region and may be preparing sabotage against critical infrastructure sites.

Western Norway is home to Haakonsvern, the largest naval base in Northern Europe, as well as key oil and gas facilities, power plants, and other related electrical infrastructure.

Read more here…