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European leaders gathered in Sofia on Thursday to hash out a plan for shielding Iran from the brunt of US economic sanctions as they try to convince Iranian President Hassan Rouhani to continue abiding by the terms of the deal, while proposing levying tariffs on US goods in response to Trump decision to impose sanctionson Iran.

Shortly after President Trump announced that the US would pull out of the deal, Rouhani promised that his country would continue abiding by its terms only if Iranian businesses could continue operating normally.

In an interview with Germany’s Deutschlandfunk radio, European Union budget commissioner, Guenther Oettinger discussed several options for preserving the deal, including using the European Investment Bank to offset the impact of sanctions by extending loans to firms with financing problems. In an example of one more-extreme measure under discussion, the EU has also considered “imposing its own tariffs” on the US that would make it much harder for US firms to sell their goods and services in the trade bloc.

Of course, the US has important goods and services in the industrial sector that it would like to offload in Europe, Oettinger said.

While sanctions weren’t the EU’s first choice for preserving the deal, few other actions would be strident enough to get President Trump’s attention, as Oettinger made clear:

“We want to resist that. We have limited possibilities,” he said.

“Trump despises weaklings. If we back down step by step, if we acquiesce, if we become a kind of junior partner of the US then we are lost.”

And while the EU would like to protect its largest companies from US sanctions, French President Emmanuel Macron said on Thursday that companies would be responsible for deciding whether they will still do business with Iran.

Macron was referencing French oil firm Total, which said on Wednesday that it would end work on a large gas field project in Iran unless it receives an exemption from US sanctions against Tehran, according to Reuters. Tehran had hailed that project as a symbol of the deal’s efficacy.

Meanwhile, A.P. Moller-Maersk, the world’s largest container shipping company, also said it would cease business operations in Iran.

CEO Soren Skou told Reuters on Thursday that A.P. Moller-Maersk was following suit.

“With the sanctions the Americans are to impose, you can’t do business in Iran if you also have business in the U.S., and we have that on a large scale,” Skou told Reuters in an interview following the firm’s first-quarter report.

“I don’t know the exact timing details, but I am certain that we’re also going to shut down (in Iran),” Skou said.

Finnish mining technology company Outotec said US sanctions would complicate its business with Iran, though it added that it’s too early to make a final decision on whether it would leave the Iranian market.

Macron said France backed proposals by the European Commission to protect and compensate European companies that might be hit by US sanctions for trading with Iran.

“International companies with interests in many countries make their own choices according to their own interests. They should continue to have this freedom,” Macron said after arriving for a second day of EU leaders’ talks in the Bulgarian capital.

“But what is important is that companies, and especially medium-sized companies which are perhaps less exposed to other markets, American or others, can make this choice freely.”

That said, there’s no easy or quick way to protect companies from US sanctions, and that it will take time before the bloc can decide on a strategy. And even when they do, the plan will likely fall short of the types of firm guarantees that the Iranian authorities are seeking.

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With Walmart unofficially set to close Q1 earnings season, which despite being the strongest in 7 years failed to boost the S&P500, all attention will remain glued on the interplay of the rates-dollar-oil trio, and judging by the somber overnight market action, traders are not too excited with the ongoing meltup in all three. 

U.S. stock index-futures inched lower driven by contracts on the Nasdaq 100 as Cisco’s forecasts fell short of Wall Street’s most optimistic projections. European stocks are mixed although concerns about Italy’s new government are rising again, while Asia was modestly in the red.

In the early session, U.S. 10-year TSY yields extended their advance to over 3.1%, rising as high as 3.12%. The 5s30s curve pared an earlier steepening move to flatten slightly.

Focus remains on 3.22% level in 30-year bond, which is this year’s highest closing level and has also has been highlighted by market commentators. Rising just shy of 3.25%, the 30Y rose to its highest level since 2015, showing that this year’s selloff has spread to the most-resilient part of the world’s biggest bond market.

The other main driver of risk, the Dollar index (in this case the BBDXY), slipped initially as talk on the probability of U.S. yield-inversion prompted some profit-taking, but it then quickly erased the drop as the yield on 30-year notes hit fresh cycle highs after the London open.

Sterling provided intraday traders with the volatility they were looking for amid conflicting reports over the U.K.’s intentions to stay in the EU customs union, while the euro stayed in a lower-highs pattern as leveraged names fade rallies given Italy risks remain. Buoyed by the sinking Euro, European stocks edged higher.

As Bloomberg notes, there were three moving parts within European session;

• Firstly, U.K. markets react to Telegraph story of extended customs union, despite further reports tempering impact. Short Sterling curve bear steepens, gilts gap lower at the open and GBP outperforms other G-10 FX.
• Secondly, BTP/bund spread tightens marginally as debt write-off fears from Italy subside, however BTP futures still weak as damage to sentiment from eurosceptic/fiscally loose govt. is already done.
• Finally, USTs curve snaps steeper in early trading, 10y yield hits 312bps before fading back slightly; overall leading to underpinning of USD, USD/JPY accelerates higher after breaking above 110.50. UST/bund spread tightens as block trades print, large German 5s30s steepener also blocked.

The energy sector will also be in focus after oil rose to $80 a barrel in London for the first time since November 2014 as U.S. crude inventories fell and traders braced for the impact of renewed sanctions on OPEC member Iran. Money managers who are reducing their bullish bets on oil are following a “dangerous” strategy, according to Goldman Sachs which today released its latest bullish note on oil, suggesting that just like in the summer of 2008 Goldman is selling the hell out of crude. Demand will remain strong and concerns over economic growth will probably prove temporary, analysts including Jeffrey Currie wrote in a May 16 note

In Europe, all eyes are on Italy, and especially its bond and stock market, and where the early rebound in the benchmark FTSE MIB fizzled out, with the index now falling as much as 0.5% amid volatile trading as investors await news on a potential final deal between Five Star and League to form government. Italia stocks initially rose at the open after newspaper Corriere della Sera reported populists had dropped a request for a €250BN writeoff by the ECB. Overnight, the two anti-establishment parties said they have virtually completed a government program.

Ahead of today’s announcement, analysts remain largely sanguine: Italian concerns at the current juncture will likely not “prove sufficient enough to trigger sustained selling pressure on the euro in the near-term, although they could contribute to more volatility,” Lee Hardman, a currency analyst at MUFG, told Bloomberg.

Traders will focus on jobless-claims data and the Philadelphia Fed Business Outlook. Walmart, Applied Materials, and Nordstrom are among companies reporting earnings

Market Snapshot

• S&P 500 futures down 0.2% to 2,718.25
• STOXX Europe 600 up 0.08% to 393.53
• MXAP down 0.1% to 174.42
• MXAPJ down 0.3% to 568.49
• Nikkei up 0.5% to 22,838.37
• Topix up 0.5% to 1,808.37
• Hang Seng Index down 0.5% to 30,942.15
• Shanghai Composite down 0.5% to 3,154.28
• Sensex down 0.3% to 35,279.96
• Australia S&P/ASX 200 down 0.2% to 6,094.26
• Kospi down 0.5% to 2,448.45
• German 10Y yield rose 2.8 bps to 0.634%
• Euro up 0.05% to $1.1814
• Italian 10Y yield rose 16.0 bps to 1.858%
• Spanish 10Y yield fell 0.7 bps to 1.405%
• Brent futures up 0.7% to $79.80/bbl, highest since 2014
• Gold spot down 0.1% to $1,289.39
• U.S. Dollar Index down 0.1% to 93.26

Top Overnight News from Bloomberg

• Italy is still waiting for its next government after talks between two populist leaders dragged on Wednesday night. More than two months after an inconclusive election, the two sides have repeatedly blown deadlines set by President Sergio Mattarella as they try to find a deal
• U.K. PM Theresa May’s inner Cabinet has drawn up a plan to fix the intractable Irish border problem: keeping some EU customs rules for years after Brexit. It’s an idea that still faces obstacles but the proposal is to keep the U.K. aligned with tariff and customs rules for longer as a last resort, according to people familiar with the matter
• Key Fed staff members are pushing back against the idea of asking U.S. banks to institute countercyclical capital buffers, according to people familiar
• Fed’s Bullard: if rates rise too aggressively and yield curve inverts, would be taken as a very negative signal and risk of recession would go up
• EU Budget Commissioner: Tariffs on U.S. goods one option EU is considering in response to U.S. decision to reimpose sanctions on Iran
• EU leaders presented a determined front to stand up to U.S. President Donald Trump’s threats to penalize EU businesses and scupper the Iran nuclear deal. The bloc made a rare demonstration of unity in the face of what EU President Donald Tusk called the “capricious assertiveness” of the Trump administration
• The White House distanced itself from the hard- line North Korea stance of President Trump’s top security adviser, indicating his administration is committed to keeping next month’s summit with Kim Jong Un on track
• Cable rises back above 1.35 handle in Asia and toward 200-DMA on the customs union report. New Zealand dollar’s advance of as much 0.6% is also elevating the Aussie as cross-related bids come into play, according to a trader. Euro gains against greenback after weakening Wednesday amid concern about a potential proposal to write off some Italian debt
• U.S. treasuries are slightly higher changed in Asia; had weakened in New York trading, with 10Y yields rising as much as 3bps to just above 3.10%; the 5s30s curve pared an earlier steepening move to flatten slightly; Focus remains on 3.22% level in 30-year bond, which is this year’s highest closing level and has also has been highlighted by market commentators

Top Asian News

• Emerging Markets Under Pressure to Boost Borrowing Costs
• Malaysia Police Seize Items From Ex-Premier Najib’s House
• Santos Sinks as $10.4 Billion Harbour Bid Ignores Oil Rally
• Kakao to Merge With Music Streaming Unit Kakao M Via Stock Swap

Discounting the SMI (-0.3%) being weighed on by major component underperformance all major European bourses are trading in positive territory for the day with the Euro Stoxx 50 up 0.2%. In an earnings heavy morning, Altice (+10.5%) Lagardere (+2.3%) and National Grid (+1.6%) posted positive results and are currently trading positive for the day, with AP Moeller-Maersk (-9.4%) Investec (-4.5%) and Royal Mail (-5.4%) coming in under expectations and trading in negative territory. Pervasive news for the UK gambling sector with the UK cutting the maximum stake in FOBTs to GBP 2.00 has led to gambling names such as William Hill (-3.0%) and Paddy Power (-0.7%) being down for the day on the announcements that revenues will be impacted negatively.

Top European News

• Italy’s Populists Drop Debt Writeoff in Almost-Final Policy Plan
• Euro Bearish Sentiment Climbs to Two-Month High on Italy Risk
• U.K. Sees Extended EU Customs Ties as Irish Border Fix
• EU Hardens Against Trump With United Stand on Trade and Iran
• William Hill, Paddy Power See Sales Hit From U.K. Betting Limit

In FX, the dollar has seen volatile trade on conflicting drivers as the ongoing rally in US Treasury yields underpins the Greenback and offers protection against global tariff headwinds. The index is meandering between circa 93.100-450, vs yesterday’s marginal new high for the year around 93.640, and also subject to choppy moves on the back of fluctuating fortunes in basket currencies. GBP/EUR: The Pound has been buffeted by latest Brexit reports suggesting a customs union back-stop in some shape or form, with an initial boost on paper talk that the UK may stay in the current EU fold until 20121 or longer and then a downturn on denials via a spokesperson for PM May. However, Cable has recovered to 1.3500+ and Eur/Gbp is back below 0.8750 after subsequent headlines essentially pointing to a halfway house, while Eur/Usd remains leggy above 1.1800 after weakening to a fresh ytd low on Wednesday around 1.1761. CAD/AUD/NZD: Both holding a firmer line vs their US counterpart, the Loonie still getting some support from elevated oil prices and not giving up on a NAFTA deal before the day is out even though the prospects are waning – Usd/Cad currently nearer the bottom of a 1.2795-50 range, above hefty option expiries at 1.2700 (running off today and more for Friday’s NY cut) and well within barriers from 1.2925-1.2625. The Aud saw 2-way price action after a mixed Aussie jobs report overnight and has settled towards the middle of a 0.7505-45 band as some elements of the labour data were encouraging, while cross flows were also bullish as Aud/Nzd rebounded over 1.0900 again. Note, the Kiwi has also struggled above 0.6900 vs the Usd even though the NZ budget balance and forecasts improved overnight.

In commodities, oil is trading marginally higher today with WTI (+0.3%) and Brent (0.2%), the latter rising above $80 for the first time since Nov. 2014. There has been little oil news flow following the larger than expected DoE crude inventory drawdown. Barclays raised their Brent oil assumptions to USD 73/bbl in 2018 and USD 70/bbl in 2019, following suit from other analysts. Yesterday, Iran Oil Minister Zanganeh stated Iran will be doing its best to maintain production and continue exports, while he also commented that oil prices at USD 60-65/bbl are ‘logical’ and the US wants to see high prices to boost shale production. Elsewhere, gold and copper trade lower on the day as the yellow and red metal track the current risk tone.

Looking at the day ahead, we’ve got the latest weekly initial jobless claims print (215k expected) along with the May Philly Fed PMI (expected to soften slightly to +21.0 from +23.2) and April leading index (+0.4% mom expected). Away from the data the ECB Vice-President Constancio is scheduled to speak at two separate events in Frankfurt at 11.30pm BST and 1.00pm BST, while the BoE’s Haldane speaks at 5pm BST. Over at the Fed, Kashkari is due to speak at 3.45pm BST and Kaplan is scheduled to speak at 6.30pm BST

US Event Calendar

• 8:30am: Initial Jobless Claims, est. 215,000, prior 211,000; Continuing Claims, est. 1.78m, prior 1.79m
• 8:30am: Philadelphia Fed Business Outlook, est. 21, prior 23.2
• 9:45am: Bloomberg Economic Expectations, prior 52.5; Consumer Comfort, prior 55.8
• 10:45am: Fed’s Kashkari Speaks at Moderated Q&A in Minneapolis
• 1:30pm: Fed’s Kaplan Speaks in Moderated Q&A

DB’s Craig Nicol concludes the overnight wrap

While the rout across bonds may have slowed slightly, or in some cases reversed, over the last 24 hours for most markets, no one appeared to pass on the invite to Italy with the main story in markets being the surge for BTP yields yesterday following leaks of some of the details of a draft coalition agreement between the 5SM and League. Indeed, 10y BTPs touched a high of 2.112% intraday yesterday (+16.4bps) before eventually finishing just off that at 2.107% and +16.2.bps on the day for the biggest one-day selloff since June last year. The yield is the highest now since October last year and up 40bps from the April lows. The spread to Bunds also reached 151bps and the widest post-election after an eye opening +20.2bps move. That’s the biggest one-day spread move between BTPs and Bunds since the Brexit-impacted widening on 24th June 2016.

So, some impressive price action. What really grabbed the market’s attention was the comment in the leaked draft which came through early yesterday morning that the new government planned to ask the ECB to write-off €250bn in Italian debt. Subsequent comments throughout the day appeared to downplay the statement with League economic advisor Claudio Borghi saying that there was no such proposal to cancel part of Italy’s debt, but that instead there is “simply the request for a change in accounting rules” which appeared sufficiently vague to keep the market guessing. Other snippets of the draft proposal included a mechanism to move away from the single currency (which has also since been downplayed) and also to reassess the country’s EU budget contributions. A separate statement from the two parties which was picked up by the FT also revealed that the nation’s desire “must be to return to the pre-Maastricht setting”. According to Bloomberg the two leaders of the 5SM and League are said to still be putting finishing touches to their program after talks dragged on late into last night.

Despite the emergence of the two populist parties as the front runners in Italy, markets had become accustomed to a softer stance from the 5SM and League in recent weeks and months so it wasn’t a great surprise to see markets react as they did. Indeed the whole BTP curve was sharply higher with 2y BTPs in fact rising back into positive territory (+14.8bps to 0.064%) for the first time in over a year. Cyprus is the only other Eurozone country to have positive 2y yields. The rest of the periphery seemed to get dragged along with Italy yesterday with Greece in particular finishing +22.6bps higher, while Spain and Portugal were +5.5bps and +6.3bps higher respectively. In contrast, the rest of Europe was a few basis points lower with Bunds actually rallying -4.0bps. Treasuries finished last night +2.4bps at 3.097% with decent industrial data again helping, and is trading around that level this morning. EM currencies and bonds were also generally a bit more resilient with the recently hammered Turkish Lira amongst the top FX performers.

Those Italy developments also resulted in the Euro falling -0.25% and temporarily below 1.180 for the first time this year. The FTSE MIB also tumbled -2.32% and the most since early March with Banks down around 4%. By contrast the Stoxx 600 and DAX finished +0.22% and +0.20% respectively. Weakness spread over into Italian credit too with sub bonds in the Italian Banks between 10bps and 12bps wider.

The weakness was by and large contained in Italy and to a lesser extent the periphery however as across the pond the S&P 500 nudged up +0.41% last night helped by results out of the retail sector of all places with Macy’s posting a second straight quarter of sales gains and also raising full year guidance. That solid industrial production print also appeared to help (more on that below) while the White House appeared little concerned about North Korea’s comments threatening to pull out of talks with President Trump next month. Last night we also got the news that White House Trade Adviser Peter Navarro was to be excluded from trade discussions with China this week, which was taken positively in the sense of it making more likely that an amicable outcome would be met.

Overnight, markets are a bit more mixed in Asia with the Nikkei (+0.63%) and Hang Seng (+0.05%) flat to slightly higher, but the Shanghai Comp (-0.23%) and ASX (-0.27%) in the red. US equity futures are flat while Gold and the rest of the commodity complex is slightly firmer. A headline from the Telegraph newspaper saying that the UK will tell the EU it is prepared to stay in the customs union post 2021 has helped Sterling bounce +0.50% in the early hours.

Moving on. Other news really played second fiddle to the Italy headlines yesterday in markets. Over at the Fed we heard from Atlanta Fed President Bostic with the biggest takeaway perhaps being that he is in the camp of those Fed officials who have some concern about a possible inversion of the yield curve. Indeed he said that it is his job to make sure that it doesn’t happen. After a relatively big move on Tuesday, the 2s10s curve was less than 1bp wider yesterday at 50bps. Later on, San Francisco Fed President Williams said interestingly that he thought forward guidance would at some point be “past its shelf life”. Our US economists have previously hinted that forward guidance is something that could be phased out in the future, with the first part of this being removing the “for some time” phrase from the FOMC statement.

Away from this, the economic data barely played a role yesterday in Europe after CPI reports in Germany and the Euro area failed to throw up any surprises. Indeed the core April CPI reading for the Euro area was confirmed at +0.7% yoy which matched the flash reading, while Germany’s April headline reading was confirmed at -0.1% mom. Staying with Europe, it perhaps wasn’t a surprise to see German Chancellor Merkel’s comments overshadowed by the Italy headlines with the Chancellor reiterating a need for EU states to push for European reform including providing a “common backstop” through the European monetary fund.

Meanwhile, there was a small positive data surprise in the US where April industrial production rose +0.7% mom and the March print was revised up two-tenths. Capacity utilization was also confirmed as rising four-tenths to 78.0%. Prior to that, data in the housing market was more mixed with starts much softer than expected in April (-3.7% mom vs. -0.7% expected) but permits less than soft than the consensus expected (-1.8% mom vs. -2.1% expected).

Looking at the day ahead now, the diary is fairly sparse this morning with the March trade balance reading in Italy and March construction output data for the Euro area the only releases of note. This afternoon in the US we’ve got the latest weekly initial jobless claims print (215k expected) along with the May Philly Fed PMI (expected to soften slightly to +21.0 from +23.2) and April leading index (+0.4% mom expected). Away from the data the ECB Vice-President Constancio is scheduled to speak at two separate events in Frankfurt at 11.30pm BST and 1.00pm BST, while the BoE’s Haldane speaks at 5pm BST. Over at the Fed, Kashkari is due to speak at 3.45pm BST and Kaplan is scheduled to speak at 6.30pm BST

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Following the latest barrage of opinions from Wall Street pros on the “magic number” – i.e., the level of 10Y Treasury yields which would cause traders to rotate from equities into bonds…

… here is Bloomberg’s markets commentator, Garfield Reynolds, who in his latest Macro View takes a slightly more fatalistic approach, predicting that no matter what the threshold is, yields are now set to overshoot to the top, noting that “the Treasury yield eruption so many have feared looks likely to come soon” and predicting that the concern is that “other markets aren’t prepared for the sort of sustained and substantial sell-off in Treasuries that hasn’t been since for decades.“

His full note is below:

Treasury Yields Set to Overshoot to the Top for Once: Macro View

The Treasury yield eruption so many have feared looks likely to come soon. The concern is that other markets aren’t prepared for the sort of sustained and substantial sell-off in Treasuries that hasn’t been since for decades.

Much of the latest move that sent 10s above 3% has been seen as driven by technicals after being initially triggered by a jump in European yields.

That’s a worry because the market has now gone past a series of strong resistance points without significant reliance on a scary set of economic fundamentals — rising Fed rates, ballooning U.S. deficits, fiscal stimulus, accelerating gains in CPI and crude oil.

Even with the Fed’s implicit confidence that the deflation dragon has been slain, the bond market is in danger of underpricing CPI gains. Five-year breakevens are rising but they have been overtaken by both headline and core inflation figures.

That’s come as crude oil ratchets up in price, overwhelming such long-term bear factors as changing energy-usage profiles and U.S. shale oil production. While recent rallies benefited from unhealthy geopolitics, crude has stayed buoyant even as global tensions eased. That keeps bond traders edgy for signs of fresh inflation acceleration.

It also helps explain why the term premium is back on the move — on pace for the steepest monthly jump since Trump’s November 2016 election.

There’s plenty of scope for the term premium to keep going as the Fed moves to lessen its repressive sway over the market — ongoing balance sheet reduction, a Fed benchmark rate getting closer to inflation, and the growing chorus calling for an end to the dot plot.

That all removes certainty, boosting the term premium and volatility.

That rising Fed rate is also creating what may be the single biggest upward driver for Treasury yields — the jump in money-market rates. They’re on the verge of offering real returns, and beating stock dividend yields, at a time when the Bloomberg Barclays index of T-notes due in 10 years or less is heading for the first 3-quarter losing streak in its 45-year history.

That helps explain why some of the brakes that slowed or stopped previous sell-offs aren’t working — despite some of the biggest yield premiums on record, foreign holdings have stalled and demand is soggy at auctions. The surge in the dollar seems not to be feeding into bonds and is only intermittently driving stocks, while flows into cash and money market funds have been strong.

It all adds up to a reduction in the haven allure of Treasuries and increases the odds for an unusual overshoot to the top side for yields, one that can devastate a whole range of other assets.

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Two weeks after Saudi Arabia said it was targeting $80/bbl oil, this morning Riyadh got its wishes early when Brent hit the Saudi target, jumping as much as 1% to $80.18, following the latest drop in U.S. crude inventories and as traders continued to fret about the consequences of renewed sanctions on Iran.

This was the highest price since November 2014.

Today’s jump followed a reported from Goldman titled simply “The case for commodities strengthens ” according to which America’s surging shale output won’t be able to replace the potential drop in Iranian oil shipments after the U.S. reimposed sanctions on OPEC’s third-largest producer.

US shale cannot solve the current oil supply problems. Even if only 200-300 kb/d of Iran exports are at risk by year-end, OPEC is not likely to preempt this loss, only react to it. Further, any response will reduce spare capacity in an increasingly tighter market. The erosion in Venezuela and Angola oil output is accelerating at the same time ex-US growth is stalling. Only the US has seen supply surprises, but is facing growing pains with filled pipeline capacity, constraining US growth into 2019.

Goldman also noted that physical markets continued to ignore growth concerns – just yesterday the IEA warned that the surge in prices will kill demand – rising rates and USD.

Only financial markets care, which is why only gold has traded substantially lower with the risk-off sentiment. Growth concerns will likely prove temporary, realized demand remains robust and OPEC has never been able to catch late-cycle demand growth to replenish inventories before a recession occurs. And even if growth were to decelerate further, it would take global GDP growth collapsing to 2.5% yoy to simply balance the oil market! We recommend not ‘riding this one out.’

And confirming that Jeff Gundlach was right in December to go long commodities, Goldman’s Jeff Currie said that oil is the “Best performing asset class now posts the best ytd returns in a decade. The rally likely has room to run, particularly from a returns perspective. Oil fundamentals are now more bullish as robust demand faces supply disappointments. We are raising our 12m S&P GSCI returns forecast to 8% from 5% yet markets remain complacent. Specs have declined since $73/bbl under the mantra, ‘we will ride this one out’ — dangerous words from a risk management perspective.”

The paradox, of course, is that rising oil prices crush the benefit tot he middle class of Trump’s tax cuts; crude has rallied this month to the highest level in more than three years after U.S. President Donald Trump withdrew from a 2015 pact between Iran and world powers that had eased sanctions on the Islamic Republic in exchange for curbs on its nuclear program. As we noted yesterday, while the International Energy Agency said a global glut’s been eliminated thanks to output curbs by OPEC, it warned high prices may hurt consumption and cut forecasts for demand growth.

So far, however, demand appears to be doing fine.

On Wednesday, the EIA reported that U.S. crude inventories fell 1.4 million barrels last week, while domestic production rose to 10.7 million barrels a day. Despite surging American output, which has topped 10 million barrels a day every week since early February, traders continue to push the price of Brent higher, unconcerned about the torrent of shale production this will unleash.

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Authored by Mac Slavo via SHTFplan.com,

The dollar’s collapse is nearing.  The European Union is planning to switch it’s payments to the Euro for its oil purchases from Iran, eliminating United States dollar transactions.

Just one more nail to the US dollar’s coffin.  Its collapse is all but imminent at this point. The EU has successfully found a way to scoff at potential future sanctions on Iran by openly defying the US; and as an “added bonus,” they’ve helped seal the dollar’s fate.  According to RT, a diplomatic source with the EU has told a news outlet of the decision. 

 “I’m privy to the information that the EU is going to shift from dollar to euro to pay for crude from Iran,” said the diplomatic source. 

Brussels has been at odds with Washington over the US’s decision to withdrawal from the Iran nuclear deal, which was reached during the administration of Barack Obama. President Donald Trump has pledged to re-impose sanctions against the Islamic Republic as soon as he is able to do so. The Trump administration also has had plans to topple the current regime in Iran, according to leaked documents, and it looks like they’ve just given themselves the go-ahead:

The Washington Free Beacon has obtained a three-page white paper being circulated among National Security Council officials with drafted plans tospark regime change in Iran, following the US exit from the Obama-era nuclear deal and the re-imposition of tough sanctions aimed at toppling the Iranian regime.

The plan, authored by the Security Studies Group, or SSG, a national security think-tank that has close ties to senior White House national security officials, including – who else – National Security Adviser John Bolton, seeks to reshape longstanding American foreign policy toward Iran by emphasizing an explicit policy of regime change, something the Obama administration opposed when popular protests gripped Iran in 2009, writes the Free Beacon, which obtained a leaked copy of the circulating plans. –Zerohedge

However, it in the process, it is highly likely that the US dollar will collapse as nations distance themselves from the United States’ often disastrous foreign policies.  As RTreported, dozens of contracts signed between European businesses and the Islamic Republic could be at risk of cancellation if Brussels obeys Washington’s sanctions. This would damage Iran’s economy and European firms would lose a huge market in the Middle East. Switching to alternative settlement currencies allows both sides to continue trading despite US sanctions and will damage the dollar in the process. 

Earlier this week, EU foreign policy chief Federica Mogherini said that the foreign ministers of the UK, France, Germany, and Iran had agreed to work out practical solutions in response to Washington’s move in the next few weeks. The bloc is reportedly planning to maintain and deepen economic ties with Iran, including in the area of oil and gas supplies.

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As if The Bank of England does not have enough on its plate – at first scaremongering Brexit and now doing its best to defend against its potential impact -a new report by research group Positive Money says the central bank must do more to combat climate change, including overt monetary financing of investment in a low-carbon economy.

As The Independent reports, the report argues that the bank’s mandate to secure financial stability “looks incoherent over time unless it considers the long-term viability of the economy”. That viability will be undermined unless the threat of climate change is tackled soon, the researchers say.

“The nature of climate change is such that either physical damage from weather or radical changes in technology and policy will occur in some combination, so action is needed now,” the report says.

In an interesting twist, the report begins by blaming The Bank of England (and other profiligate central banks) for printing too much money and worsening global climate change.

The bank’s record on climate change and says its programme of, in effect, printing billions of pounds to prop up the economy has disproportionately helped carbon-intensive companies that are choking the planet.

Under quantitative easing (QE), the bank has bought billions of pounds of debt from companies and the government.

This is supposed to increase demand for debt, which in turn lowers interest rates. Cheaper borrowing means more borrowing which is supposed to be used to fund economic activity.

But the researchers argue that QE has been actively harmful to efforts to combat climate change because the bank’s own criteria have been skewed towards buying debt from high-carbon sectors like manufacturing and utilities.

It also argues that the purchase of hundreds of billions of pounds worth of government bonds (debt) via QE has poured cash into the financial system, pumping up prices of assets such as stocks, but has had little impact on the “real economy”.

Which is true.

But then Positive Money say more money-printing is needed to solve global climate change…

To have a genuinely powerful, positive impact central banks should instead instigate “green QE”, which prioritises buying sustainable investments, the report suggests. This would directly stimulate activity in green sectors which have the potential to grow rapidly

A recent attempt to map the chains of direct and indirect financial exposure across the economy finds that feedback loops can make the effect of policy changes substantial.

Positive Money also calls for the Bank to look into effectively print money for the government to spend directly on green projects.

This method, known as “overt monetary financing”, is controversial but has been advocated in a variety of forms by respected figures including Lord Adair Turner, former head of the UK’s financial regulator.

Supporters argue that it simply dispenses with the artificial step of the government issuing debt to the markets in the form of bonds which are then bought up by the central bank.

The primary aspect of the BoE’s mandate is to maintain stable prices but it must also “support the economic policy of Her Majesty’s government”. That policy already includes sustainability as an aim.

Author of the report, Positive Money economist Rob Macquarie, concludes:

“The Bank of England’s mandate must be hardwired for sustainability and climate change.”

How long until The Fed is pressed to stop focusing on maintaining the S&P 500’s price change and instead buy Tesla’s direct from Musk and fund a solar panel of every new home… oh wait!

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Authored by Judith Bergman via The Gatestone Institute,

• If it is considered ‘objectionable’ in the West to talk about the factual consequences of migration, in Sweden it is now viewed as a crime.

• The kind of ‘integration’ that the mosque in Växjö is reportedly spreading to the local Muslim inhabitants is that Muslims are urged not to participate in the Christmas celebration of “kuffars” [a derogatory term for ‘disbelievers’], and Jews are, of course, mentioned as the enemies of Allah. The mosque’s school uses Saudi Arabian school curricula, and encourages women not to dress in ‘Western clothes’.

• “Silence has become an established norm in certain groups of inhabitants” in these areas…. there is pressure from relatives and religious communities, not to contact authorities, but to use the local alternative systems, such as the mosque, instead. Sometimes, the local criminal gangs even tell the residents to call them, instead of the police, to minimize the presence of police in the area. — BRÅ, the Swedish Crime Prevention Council

• It increasingly appears that it will be Sweden that integrates into Islamic culture.

In 2017, a Swedish police report, “Utsatta områden 2017“, (“Vulnerable Areas 2017”, commonly known as “no-go zones” or lawless areas) showed that there are 61 such areas in Sweden. They encompass 200 criminal networks, consisting of an estimated 5,000 criminals. Twenty-three of those areas were especially critical: children as young as 10 had been involved in serious crimes there, including ones involving weapons and drugs. Most of the inhabitants were non-Western, mainly Muslim, immigrants.

A new report “The Relationship with the Judiciary in Socially Vulnerable Areas” from BRÅ (Brottsförebyggande Rådet), the Swedish Crime Prevention Council, shows that more than half of the inhabitants of these areas — around 500,000 people — think that criminals affect people in the areas by scaring people from appearing as witnesses, from calling the police, from moving freely, and from intervening when witnessing vandalism. Residents fear repercussions from the local criminals, not only against themselves but also against family members.

Cars burn during a riot in suburb of Stockholm, on February 20, 2017. (Image source: YouTube/gladbecker82 video screenshot)

According to BRÅ, “Silence has become an established norm in certain groups of inhabitants” in these areas. The new report also notes the existence of parallel legal systems. 12% of the people living in these areas said that there is pressure from relatives and religious communities not to contact authorities, but to use instead local alternative systems, such as the mosque. Sometimes, the local criminal gangs even tell the residents to call them, instead of the police, to minimize the presence of police in the area. These alternative systems appear to handle all crimes that have to do with “reputation” and “honor” but also deal with other crimes, such as blackmail and theft. Relationship issues, including divorce and child custody, are also often handled by the local mosque. BRÅ points out that these alternative systems are often “markedly patriarchal”, disadvantaging the rights of women and children.

Since 2005, when the last such document was published, BRÅ, which is responsible for crime statistics in Sweden, has refused to release data about the ethnic identity of criminals. Nonetheless, Swedish newspaper Expressen recently published a report that out of 32 gang rape cases adjudicated in 2016 and 2017, 42 of the 43 of the rapists were migrants or descendants of migrants; 32 had been born abroad. 10 were born in Sweden, with one or both parents born abroad. The men were on average 21 years old at the time of the crime, and 13 of them under 18.

According to Stina Holmberg, the investigative and research counsel at BRÅ, there is no urgent need for a new study on migrant crime, although the last such study that BRÅ did was in 2005. What is needed now, according to Holmberg, is the “integration” of migrants, which she believes will end the crimes. According to her, the 42 migrants guilty of gang rape are a negligible part of all migrants, in relation to the 163,000 migrants who applied for asylum in 2015.

In February, Peter Springare, a Swedish police officer, said that gang rapes were a new cultural phenomenon in Sweden — a consequence of the last 10 to 15 years of immigration policy.

“There are also ethnic Swedes engaged in gang rape , but not in the same numbers as foreign-born offenders,” Springare said. For those comments, Springare was reported to the police, who announced that they would conduct an internal investigation into his remarks. The Secretary General of Sweden’s Law Society, Anne Ramberg, said that Springare’s comments were “almost racist”. If it is considered ‘objectionable’ in the West to talk about about the factual consequences of migration, in Sweden it is now viewed as a crime.

The Swedish government, however, seems undeterred by the risks of more potential gang rapes and migrant crimes. It has proposed legislation that will allow 9,000 unaccompanied and mainly male minors — approximately 7,000 of whom have reportedly turned out to be older than 18 and are thus not minors at all — who have had their asylum applications rejected, and who should have been deported, to get temporary residence permits in Sweden, if they plan to attend high school or are already enrolled in one. Notably, even those among the 9,000 whose identities are unverified — presumably because they have no papers — will be allowed to stay.

Both the police and the Swedish migration courts have heavily criticized the legislation, especially as it breaks with Swedish law, which requires people who want to stay in the country to be able clearly to identify themselves. Lowering this requirement reduces the ability of the Swedish authorities to know who is living in the country.

In response, the government has argued that the proposal is about allowing the 9,000 migrants to finish or apply for a high school education and not about asylum. So, it suddenly turns out that the 9,000 male migrants did not come to seek asylum, but to acquire a Swedish high school education. Who knew? Why grown men of unverifiable identity and from foreign countries should be allowed into Swedish high schools remains unanswered. Allowing the 9,000 ‘minors’ to stay is expected to cost the Swedish state nearly two billion kroner [$238 million; almost 200 million euros] in 2019 alone.

Bishop Fredrik Modeus of the city of Växjö has argued that Sweden should “reintroduce the possibility of residence permits in special and particularly devastating circumstances”, and that Sweden should view itself as a “humanitarian superpower”: “Allow the unaccompanied youth to stay. Not temporarily but permanently,” he said.

The mosque in Bishop Modeus’s city recently applied for permission publicly to broadcast its calls to prayer from a loudspeaker for three minutes, twice on Fridays. There are already two mosques in Sweden that publicly broadcast their prayers on Fridays, one in Botkyrka — where permission was granted in 2013 — and one in Karlskrona. The local Muslim leader, Imam Ismail Abu Helal, has said the call to prayer would enable Muslims to integrate better into Swedish society. “I welcome the application and look forward to hearing both church bells and prayer announcements in our city”, Bishop Modeus said.

Prime Minister Stefan Löfven refused to state an opinion on the matter of the Muslim call to prayer. He said that it “depends on the location of the mosque” and that it is up to the local municipality. In May, Växjö police decided that the mosque will be allowed to call to prayer every Friday for three minutes. In its decision, the police stated that the assessment had been based on traffic considerations, public order and safety. “No other aspects had been taken into account, such as the content of the call for prayer. Bishop Modeus said that the police’s decision was wise and would benefit integration”.

The kind of ‘integration’ that the mosque in Växjö is reportedly spreading to the local Muslim inhabitants is that Muslims are urged not to participate in the Christmas celebration of “kuffars” [a derogatory term for ‘disbelievers’], and Jews are, of course, mentioned as the enemies of Allah. The mosque’s school uses Saudi Arabian school curricula, and encourages women not to dress in ‘Western clothes’ but to teach their daughters to ‘dress decently from childhood’.

It increasingly appears, therefore, that it will be Sweden that integrates into Islamic culture. Recently, a Swedish court ruled in accordance with principles aligned with sharia law, when the jury — which had two Muslim members — found that a woman who had been violently abused by her husband could not be trusted because she came from a ‘lesser family’ than her husband and that it was “common” for women to lie about abuse. The jury also berated her for having involved the police, instead of solving the issue by consulting her abusive husband’s family. The case caused a scandal in Sweden and the two jury members were subsequently dismissed.

In another recent case, a 12-year-old Swedish Muslim girl was forcibly taken to Iraq and forced to marry her 22-year-old cousin, who reportedly raped her; after she returned to Sweden, she gave birth to twins. Her family forced her to return to Iraq to live with her ‘husband.’ His family then forcibly took her children away after finally agreeing to let her have a divorce. The children are still in Iraq. The Swedish court gave this man, an Iraqi citizen, custody of their now 10-year old twins.

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Russian President Vladimir Putin unveiled the auto section of a $3.6 billion (223 billion rouble) road-and-rail bridge over the Kersch Strait on Tuesday linking Russia to the Crimean peninsula – much to the consternation of Ukrainian officials who said the bridge showed “disregard for international law.” 

The bridge will be the longest dual-purpose span bridge in Europe, with the rail section expected to be completed at the end of 2019. 

The road stretch of the bridge was due to be completed by the end of 2018, but the opening was moved up at Putin’s request. He inspected the bridge in March ahead of the presidential election he won, saying it was important to have the link to the Black Sea peninsula open for the summer tourist season. –CBC

“Putin initiated this project himself. Many didn’t believe these plans were possible,” Kremlin spokesperson Dmitry Peskov told reporters on Tuesday before the ceremony, adding “This is an extremely important day from this point of view and in a practical sense and in symbolic terms.”

Drone footage captures opening day of Kerch Strait Bridge pic.twitter.com/cPSFZkuYKm

— Ruptly (@Ruptly) May 15, 2018

Putin drove the Russian-made KAMAZ dump truck in a convoy of vehicles across the 19-kilometre [11.8 mile] bridge over the Kerch Strait. Some Russians are calling it “Putin’s bridge,” designed to link Crimea into Russia’s transport network. –CBC

Putin, dressed in blue jeans, was met by cheering workers on the Crimean side who he told “At last, thanks to your talent, this project, this miracle, has happened.”  

[insert: 0917_Ukraine_Russia_infra_kerch_bridge Crimea Cropped.jpg , DdP3YlMX4AIxpCr.jpg ]

The Kerch Strait is a notoriously difficult place to build, with undersea mud volcanoes and seismic activity. pic.twitter.com/8X02gWSnpX

— RFE/RL (@RFERL) May 15, 2018

Ukrainian President Petro Poroshenko slammed Putin’s actions from Kiev.

“The illegal construction of the Kerch bridge is the latest evidence of the Kremlin’s disregard for international law,” Poroshenko said, adding “It is particularly cynical that its opening is happening on the eve of the latest anniversary of the deportation of the Crimean-Tatar people by the Stalin regime.”

Meanwhile, US State Department spokeswoman Heather Nauert says the United States condemns the construction and partial opening of the bridge, which it says was done “without the permission of the government of #Ukraine. Crimea is Ukraine.” 

The United States condemns #Russia’s construction and partial opening of the Kerch Strait Bridge between Russia and occupied #Crimea, which was done without the permission of the government of #Ukraine. Crimea is Ukraine. https://t.co/YjR4nserzN

— Heather Nauert (@statedeptspox) May 15, 2018

The United States condemns Russia’s construction and partial opening of the Kerch Strait Bridge between Russia and occupied Crimea, which was done without the permission of the government of Ukraine. Crimea is part of Ukraine. Russia’s construction of the bridge serves as a reminder of Russia’s ongoing willingness to flout international law.

The bridge represents not only an attempt by Russia to solidify its unlawful seizure and its occupation of Crimea, but also impedes navigation by limiting the size of ships that can transit the Kerch Strait, the only path to reach Ukraine’s territorial waters in the Sea of Azov. We call on Russia not to impede this shipping. -US Department of State

The bridge also drew criticism from Europe, after the French foreign ministry said “France condemns the construction by Russia of the Kerch Bridge, which deprives Ukraine of full access and the use of its internationally recognized territorial waters.” Meanwhile, a spokesperson for the European External Action Service said on Tuesday that the bridge was “another violation of Ukraine’s sovereignty and territorial integrity.” 

“The European Union continues to condemn the illegal annexation of Crimea and Sevastopol by Russia and will not recognize this violation of international law,” the spokesperson said.

Crimea broke away from Ukraine following a bloody US-sponsored coup, when in a March 2014 Crimean referendum 95% of participating voters were in favor of secession of the ethnically Russian region. Ukrainian officials disputed the vote, with then-acting President Oleksander Turchinov stating that “The authorities in Crimea are totally illegitimate, both the parliament and the government.” 

The State Department-backed fiasco led to the Obama administration imposing harsh sanctions on the Russian Federation, after Obama told Putin during a phone call that “Russia’s actions were in violation of Ukraine’s sovereignty and territorial integrity.” 

Putin pushed back, likening Crimea’s self-determined referendum to Kosovo’s breakaway from Serbia in 2008. 

“Regarding the March 16 referendum in Crimea, Mr Putin said that the decision to hold the referendum was in line with international law and the U.N. Charter, and was also in line with the precedent set by Kosovo,” the Kremlin said.

While the reaction on Twitter was mostly tepid, there were a few tweets of support for the bridge: 

1.000s of people have already used the Kerch bridge in the first few hours after its opening. A dream came true for all the Russian people.
Thanks @KremlinRussia_E#Crimea pic.twitter.com/d1Q2AJ6r4d

— Enrico Ivanov ☦ (@Russ_Warrior) May 16, 2018

#КрымскийМост https://t.co/mkFIT8nOzs – The Presidents full 16 minute drive across the Kerch Strait! Great achievement.🇷🇺 pic.twitter.com/a9AtqjFaQR

— Stephen Fenton (@StephenFenton88) May 15, 2018

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Authored by Alexander Mercouris via The Duran,

Russian President Vladimir Putin and Armenian Prime Minister Nikol Pashinyan – the latter recently installed as Armenia’s leader following nationwide protests – had their first bilateral meeting in Sochi on Monday on the sidelines of the Eurasian Economic Union summit.

The summary of the exchanges between the two leaders provided by the Kremlin’s website shows that Putin took the opportunity to remind Pashinyan of Russia’s economic importance to Armenia, whilst Pashinyan for his part thanked Putin for Russia’s neutral position during the protests, and reaffirmed Armenia’s continued friendship with Russia.

Pashinyan specifically reaffirmed Armenia’s continued membership of the Russian led Eurasian Economic Union, and spoke of deepening Armenia’s military ties with Russia.

President of Russia Vladimir Putin: Mr Prime Minister, colleagues,

I would like to welcome you to Russia and to congratulate you once again, this time in person, on your election to the high position of Prime Minister of Armenia.

First of all, I would like to say that we view Armenia, as everyone knows, as our closest partner and ally in the region. I am referring to both economic and security cooperation.

As you know, Russia is a leading trade and economic partner of Armenia. Its share is estimated at over 25 percent. Russia’s investment accounts for approximately 35 percent of all foreign investment in Armenia. Our trade has grown recently, also by some 25 percent. Armenian agricultural deliveries to Russia are growing at a fast pace, or more precisely, by 38 percent over the past few months.

Overall, this is very good progress and I hope that we will not just maintain but also boost it.

I would like to wish you every success on the post of the Prime Minister of Armenia. I hope that our relations will continue to develop consistently, just as they did before, and that we will continue to work together on the international stage as well as at international organisations, starting from the UN, where Armenia and Russia have always supported each other, and ending with regional organisations, both in security and economic development matters.

Prime Minister of Armenia Nikol Pashinyan: Mr President, thank you for your kind words.

It is very gratifying that, just a few days after I was elected Prime Minister of Armenia, I have this opportunity to have a meeting with you, because I think that we have things to discuss.

There is also something that does not need to be discussed: the allied strategic relations between Armenia and Russia. In general, I can assure you that there is consensus on this matter in Armenia, and nobody has ever questioned the strategic importance of Armenian-Russian relations, or ever will.

We are quite set on giving a fresh impetus to our relations – both in the political and trade and economic sense. We hope to develop our relations in the military technical sector as well as in other industries.

Many people from Russia visit Armenia, which is very good. I think Russians like Armenia very much, and Armenians also enjoy having so many tourists in Yerevan.

I would like to say that we highly appreciate the balanced position that Russia held in the course of our domestic political crisis, and I think it was a very constructive position; it is highly appreciated not only by our Government, but also in Armenian society in general.

Once again, please accept my best wishes on Victory Day. It was very interesting to watch the May 9 parade on Red Square. It is popular in Armenia and we are very impressed by the achievements that the Russian defence industry has made.

Thank you once again for this opportunity.

Pashinyan’s pledges of continued friendship to Russia will be judged cynically by many people, including by my colleague in The Duran Frank Sellers, who see them as nothing more than a device by Pashinyan to play for time whilst he sets about cutting back Armenia’s connections to Russia.

Many see hope in the fact that he plans to attend the Eurasian Economic Union summit next month and to meet with the Russian President Vladimir Putin, together with the fact that he admits that Armenia needs Russia as a military ally, but given his life story and participation in the events recorded here, there seems to be little real hope of that.

Is this a Western backed color revolution? It’s actually hard to cast doubt on that fact, given his connections with Soros funded NGOs who have as their purpose the remaking of Armenia into a NATO member state which looks somewhat less than fondly at Russia as the originator of Armenia’s woes.

With a perception that prosperity will surely be the Armenian inheritance of an integration into the Western political and economic bloc, which perception comes from anywhere but reality. It really can’t be doubted that this movement, led by a man with a history of hostility towards Russia and a long history of working in the interests of the US and its NGOs, is something that was hatched in Washington and delivered via the CIA’s vicarious operatives, the Open Society Foundation and its ilk.

The country’s post soviet poverty and Sargsyan’s perceived power grab are the grievances that were immediately capitalized upon in order to carry out this so called ‘velvet revolution’. Pashinyan says that he wants to maintain Armenia’s balancing act between the East and West, preserving ties and agreements with Russia while pursuing the partnership of the West, it should be noted that Saakashvili made a similar such promise upon assuming control of Georgia in a similar such incident.

Of course, he knows that he can’t be so bold as to immediately cut off ties with the Russians this early in the game, as Armenia is simply too dependent on Russia to make any real changes to Armenia’s foreign policy at this time, but that this represents his long term goal remains a matter to be seen.

I take the diametrically opposite view.  I believe that whatever Pashinyan may have said in the past his pledges of continued friendship with Russia and of Armenia’s adhesion to the Eurasian Economic Union are genuine.

After all, as Pashinyan himself said over the course of his meeting with Putin,

…….there is consensus on this matter in Armenia, and nobody has ever questioned the strategic importance of Armenian-Russian relations, or ever will…..

Given Armenia’s economic and geographic realities, and the rapid military build up in Azerbaijan, Armenia has no real choice, even if the Armenian people wanted such a choice, of which there is no real sign that they do.

Armenia’s relations with Russia were not an issue in the recent protests, which at no point took on an anti-Russian character.

As I have pointed out previously, that is in total contrast to the Maidan protests in Ukraine of 2013 and 2014, in which passionate hostility to Russia was the main driving factor.  That in itself is a major point of difference between the two sets of protests: the recent protests in Armenia and the Maidan protests in Ukraine.

I remain of the view that the Armenian protests were a strictly internal affair, provoked by the actions of the previous Sargsyan government, and have no geopolitical significance.

Moreover the very fact that – as Pashinyan says – there is “consensus” within Armenia about the importance of Armenia’s relations with Russia in itself places limits on what Pashinyan can do, even if he genuinely does seek to sever Armenia’s relations with Russia, which of course he denies.

Last but not least, there is the fact that even Western oriented commercially minded Armenians – and all Armenians, at least in their own estimation, are to an extent commercially minded – can see for themselves the huge commercial and economic benefits to them personally and for Armenia of Armenia retaining access to the vast Russian market through its membership of the Eurasian Economic Union.

By contrast it is impossible to see a good economic future for Armenia – or indeed (given the geopolitical realities) any real future for Armenia – if it severs its links to Russia.

For all these reasons, unlike Frank Sellers, I believe that when Pashinyan says he wants to maintain or even enhance Armenia’s relations with Russia, he means what he says.

He would be a fool if he didn’t, and whatever else he is, Pashinyan doesn’t seem to me to be a fool.

Time will show which of us – Frank Sellers or myself – is right.

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