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In a world in which Elon Musk found himself with increasingly fewer friends, one thing was certain: Morgan Stanley analyst Adam Jonas, always eager for that lead left spot in the next Tesla convertible, would stick with Tesla and Musk through thick and thin, no matter what.

Well, that ended this morning when Jonas appears to have had enough, slashing his price target on the car maker from $376 to $291, stating that following 1Q18 results, he is making significant cuts to his near-term and long-term auto margin forecasts, while forecasting greater equity dilution, i.e. another stock offering. Jones now sees “Tesla as trading near fair value with a balanced risk-reward.”

Jonas starts by commenting on the now legendary – and bizarre – Tesla Q1 conference call, saying that “regarding the feedback from the 1Q18 conference call… Elon Musk reserves the right to do very difficult things that could yield great commercial value long term. At the same time, investors reserve the right to understand the costs and the risks near term.”

Nonetheless, Jonas appears ready to brush aside the public outcry following the call saying that “we believe any impact on the investor engagement side is fairly limited and the market will focus on more pertinent and quantifiable debates such as the interplay between cash consumption and capital raising.”

He does, however, focus on the “recent increase in the pace of management departures and an apparent reorganization of the business suggest to us the need to address some of the technical and fundamental hurdles weighing on company margins.”

Going back to the reasons for the earnings forecast cut, Jonas notes that this was “driven by margins” (no punt intended) and adds:

While 1Q18 results were broadly in line with consensus expectations (and slightly above our forecasts), we are making material reductions to our earnings estimates to reflect lingering manufacturing issues with the Model 3 – most recently at Fremont final assembly. While our volume forecasts are largely unchanged, we have reduced our medium and long-term gross margin assumptions for Tesla’s passenger car operations. It is our view that the challenges in ramping up Model 3 production reflect fundamental issues of vehicle design, manufacturing process, and automation levels that can weigh against the profitability of the vehicle. The company has acknowledged that it, to some extent, overautomated the Model 3 production process and is now reengineering accordingly. Movements in raw material prices and FX add further headwinds vs. our prior expectations. Tesla management believes the Model 3’s margin performance below its 25% target level will be temporary, whereas we believe this headwind is more structural.

Ominously, Jonas – who until now was the company’s biggest cheerleader – says that given the execution risk reflected in current results, “an added level of caution is prudent” and explains:

• We lowered our long-term auto gross margin forecast to 27% vs. 34% previously. We have assumed Model S gross margins of 35%, Model X at 31%, Model 3/Y at 24%, Roadster at 40% and ZEV credits at 100%.
• We lowered our long-term operating margin forecast to 9.8% from 14.3% previously. This change takes our long-term view of group OP margins from best in class premium levels to margins in line with that of the German premium names or recent GM N. American margins. Of this reduction in long-term margin forecasts, 200bps is driven by the above concerns regarding automation, 200 bps is driven by FX (given the stronger dollar and Tesla’s US based production), and 100bps is driven by raw mats.
• The changes in our Auto margin forecasts drive nearly 90% of our price target reduction to $291.
• We have delayed our forecast of the launch of Tesla Mobility (or Tesla Network/mobility as a service) by roughly 1 year, to the middle of 2019. This change contributed around $7 to our price target reduction. We now forecast 2k units fleeted in 2019 ramping to over 50k by 2021, 1 million by 2027 and 1.7 million by 2030.
• Additionally, we have increased our estimate for Tesla’s capital raising from $2.5bn to $3.0bn, which we continue to expect in 3Q18. We assume 50% of proceeds are used to pay down debt.
• We continue to value Tesla Energy at $0.
• Lowering our bull case 21% to $441 (vs. $561 previously) and our bear case 45% to $97 (vs. $175 previously). Our bear case moves proportionally more than the bear case reflecting the great amount of financial leverage versus previous periods and the fact that we continue to ascribe zero value for TSLA Energy/SCTY.

Jonas summarizes the major concern facing Tesla as follows:

In our view, the number one issue at the heart of the Tesla investment debate is whether the company is 1) currently operating at a low level of utilization of a very large industrial complex, where incremental revenue can bring large incremental gross margins and improvement of cash consumption, or 2) the next 50-100% of growth in revenue brings forth other calls on cash and does not materially move the company in the direction of a fully self-funding existence.

With all that said, Jonas then cuts the umbilical cord connecting him to Musk and also cuts his price target to $291 from $376, for the following reason:

We see Tesla as trading near fair value with a balanced risk reward, and believe that is subject to extremely high
levels of fundamental execution risk, market/funding risk, and a highly volatile share price. In our view, Tesla does not offer enough upside to justify an OW rating or enough downside to justify an UW rating.

More concerning to Tesla bulls, Morgan Stanley sees the “bear” case price at just $97 now, down from $175, and a level that would trigger a full-blown margin call on Musk’s stock-backed loans.

And here is Jonas’ latest income statement projection, which now sees the company having a net loss in 2020:

An amusing aside: asking a rhetorical question, why he didn’t simply cut TSLA to sell, the formerly fawning analyst gives the following meandering and meaningless explanation (the real reason, of course, is that Morgan Stanley would still like to be an underwriter on the upcoming stock sale):

Why not Underweight? With 3% downside to our revised price target and high levels of volatility, an investor could reasonably ask why we are not downgrading the stock to Underweight today. There are 3 primary reasons why we reiterate our Equal-weight at this time: (1) It is difficult to judge the true underlying profitability of the automotive operations until Model 3 production is ramped to a higher level and until current bottlenecks are surmounted. (2) We want more discovery around Tesla’s potential capital raising execution, including the instruments of capital (debt, equity, ABL facility, etc.), the genre (strategic or financial investor), size and, of course the price. (3) Potential strategic value – our $291 price target is driven by our DCF of the auto business and mobility as a service business. We believe there is significant potential strategic value within Tesla, including its invested capital, design, brand, technology, relationships with key stakeholders (suppliers, governments, commercial partners) and its people.

Still, the message is clear: Tesla has just lost its biggest fan on Wall Street, and as a result the TSLA stock is trading down 2.4% to $285 in the premarket on this “betrayal’ by one of the company’s – formerly – most prominent sellside friends.

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In the latest distress signal from one of the most troubled corners of the emerging markets, this morning the Turkish Lira plunged to fresh all time lows against the dollar after Turkish President Recep Tayyip Erdogan said he intends to tighten his grip on the economy and will take more responsibility for monetary policy if he wins an election next month, which he will.

In an interview with Bloomberg, Erdogan brushed aside the apparent collapse of his economy in a stagflationary vortex, where double digit inflation is racing with daily TRY devaluation, and said that after the vote transforms Turkey into a full presidential system, he expects the central bank will have to heed his calls for lower interest rates… which is bizarre as the last thing investors in Turkey want right now is lower rates. For context, the central bank’s key rate is now 13.5%, compared with 10.9 percent consumer-price inflation.

“When the people fall into difficulties because of monetary policies, who are they going to hold accountable?” the cartoonish president told Bloomberg. “They’ll hold the president accountable. Since they’ll ask the president about it, we have to give off the image of a president who’s influential on monetary policies.”

In other words, in addition to having recently been granted quasi-despotic, “emergency” powers, Erdogan now wants to also take over the central bank.

Erdogan has routinely criticized the central bank for setting interest rates that he says have helped stoke rising prices, an argument that contradicts conventional economic theory. Central bank governor Murat Cetinkaya has said higher borrowing costs would help anchor the currency, a view in line with orthodoxy.

Bizarrely, expounding on his own unique brand of macroeconomics, Erdogan said that cutting rates would bring lower inflation because borrowing costs would decline.

“Of course our central bank is independent,” Erdogan said. “But the central bank can’t take this independence and set aside the signals given by the president, who’s the head of the executive. It will make its evaluations according to this, take its steps according to this. And I believe this will result in very beneficial steps in the future.”

Someone should perhaps explain to Erdogan just what “independent” means.

Immediately after Erdogan’s comments hit the tape The lira slid to its weakest level ever against the dollar after his remarks were published, losing 0.6 percent to 4.3942 at 7:32 a.m. Istanbul time.

Last month Erdogan called snap sham elections for June 24, in which a victory (which is guaranteed) would consolidate his one-man rule of a country he’s governed since 2003. A 2017 referendum saw the role of parliament weakened drastically and gave the president sweeping authority in the most radical constitutional overhaul since the republic was founded 95 years ago; next month’s election will seal Erdogan’s full conversion to despot.

“From the moment we move to a presidential governing system, our effectiveness there will be very different,” he said. “We’re going to do this so we can be held accountable for the responsibility we’ve taken.”

* * *

Erdogan is visiting London, where he is meeting with executives, bankers and investors even as a financial and economic crisis in Turkey grows. Erdogan will also meet U.K. Prime Minister Theresa May and Queen Elizabeth II later on Tuesday.

The outreach comes as Turkey’s relations with its NATO allies fray and its diplomatic focus shifts toward Russia and Iran. The country faces the unprecedented risk of sanctions from the U.S., a risk that Erdogan downplayed.

Asked if he was prepared for U.S. sanctions should he consummate the purchase of a missile defense system from Vladimir Putin’s government, Erdogan responded that he “can’t cut off our ties with Russia” adding that “If we’re allies with the U.S., we need solidarity, not sanctions.”

Meanwhile, the apparent collapse of the Turkish economy has shaken investor confidence, which is critical because Turkey’s current-account deficit demands steady inflows from abroad. The Q1 shortfall reported on Monday was more than $16 billion, almost double the same period last year.

* * *

Commenting on the interview, Ziad Daoud, chief Middle East economist for Bloomberg Economics said that sentiment has been the main reason behind the decline of the lira this year, and Mr Erdogan’s comments won’t improve that.

“Investors have been concerned about government intervention in monetary policy, which is compromising the independence of the central bank. The President’s latest remarks will indeed make some uncomfortable – unfortunately, unnerving investors is the last thing he needs to do if he wants to stabilize the lira.”

Full interview below.

 

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Authored by Txvetana Paraskova via OilPrice.com,

The Eastern Mediterranean will face a security threat should Cyprus continue its unilateral operations of offshore oil and gas exploration in the region, Turkey’s President Recep Tayyip Erdogan said in a speech at think tank Chatham House in London on Monday.

Turkey, which recognizes the northern Turkish Cypriot government and doesn’t have diplomatic relations with the internationally recognized government of Cyprus, claims that part of the Cyprus offshore area is under the jurisdiction of Turkish Cypriots or Turkey.

Tensions in the area flared up earlier this year, after Turkish Navy vessels threatened in February to sink a drilling ship that oil major Eni had hired to explore for oil and gas offshore Cyprus—the divided island whose northern part is run by Turkish Cypriots and is recognized only by Turkey.

Weeks before that, Turkey’s Navy had blocked the drilling vessel that Eni had hired. Eni’s chief executive Claudio Descalzi had said that the row is a diplomatic one and out of the company’s control. Descalzi said that Eni would probably move the blocked drilling ship, but would not pull out of its project in Cyprus.

While the internationally recognized Republic of Cyprus said that its “goal is to fully explore Cyprus’s hydrocarbon potential,” Turkey claims that the drilling operations are ‘unilateral’ and claims that part of the exclusive economic zone of Cyprus is under Turkish jurisdiction.

Meanwhile, just last week, Turkish Energy and Natural Resources Minister Berat Albayrak said that Turkey would begin its first solo oil and gas deepwater drilling in the Mediterranean before the end of this summer.

Turkey has strongly opposed what it describes as “unilateral” drilling offshore the internationally recognized Republic of Cyprus, and Turkish Cypriots argue that the offshore oil and gas resources of the island should be exploited jointly to ensure equal rights for both parties.

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‘Reaching for yield’ just got a lot easier…

For the first time since February 2008, three-month Treasury bills now have a yield advantage over the S&P 500 dividend yield (and dramatically lower risk).

Investors can earn a guaranteed 1.90% by holding the 3-month bills or a risky 1.89% holding the S&P 500…

The longest period of financial repression in history is coming to an end…

And it would appear TINA is dead as there is now an alternative.

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Authored by Tony Parton via NewRightNetwork.com,

Watching the acorn raise up on New Year’s Eve 2016, I was a man filled with anticipation for the future. Raleigh, North Carolina was filled with people, and there was a genuine sense of celebration that interlaced the throngs of people. It was cold and I do not like the cold, but there was a sense of electrified victory in the crisp air and hope for a bright future.

The Celebration Was Short-Lived

A few weeks later, I was in Nash County Jail waiting to be picked up by immigration police. I was taken to Wake County Jail and then to Atlanta City Detention Center, or as I politely call it-hell on earth. Seriously, if you are planning to commit a crime in Atlanta, please think again. I lost 40lbs in three months of incarceration waiting to be deported and banished from the nation that I love.

I could blame circumstance. I could blame President Trump’s tough stance on immigration. I could blame myself, or I could blame what happened to the United States Citizenship and Immigration Services under the Obama administration. I am going to choose the last two. I had ample time to apply for my Green Card, and as a man married to an American citizen, while it was expensive, we could have gotten it done.

The USCIS helpline, under Obama, told me that I did not really need to worry about a green card, that I could work in the USA as long as I had a tax code, which I had. They also told me that as a man married to an American Citizen, I had the right to abode. My wife had four children from a previous marriage, and I did all that I could to keep them while working low-level manual jobs.

On The Very Cusp

Under Obama, the USCIS became a watered down government department of limited means and authority. There seemed to be no threat, and I was about to apply for my Green Card. I had finally made enough to pay a lawyer the funds necessary to start the application. I wanted nothing more than to be able to work, take care of my family and pledge my allegiance to the most relaxed country in the world to call home because America is wonderful.

Sadly, it was not to be. President Trump changed nothing on immigration with the exception that it was finally given its teeth back, having been all but neutered under the Obama administration. He did everything that he said that he would, and he did it at a speed that I have never seen a politician move unless it was the queue to file illegal expense reports in the British Government.

Now, I am here in London, watching history happen, and I have come to the conclusion that I have no one to blame but myself. Uncle Sam gave me the opportunity to do it right, and I failed to act in time.

Loving From Afar

I have since seen a President of the United States end the second war that my grandfather fought in alongside American forces in the Korean War. I have seen a President reduce the tax burden on his entire country. I filed my taxes, and I am proud of that. I read an article that informed us of a late night phone call from the Kremlin to the White House where an overjoyed Vladimir Putin thanked Donald Trump for permitting the CIA to share intelligence with the FSB that enabled them to thwart a planned terrorist attack on the Cathedral in St Petersburg on Christmas Day 2017.

I have seen a president watch as North Korea fired an Intercontinental Ballistic Missile over the Bow of Japan, an act of war that would have seen a lesser man invade North Korea, risking the lives of hundreds of thousands of American military personnel. What a cold way to describe them; They are sons, daughters, mothers, fathers; brave men and women who also believe in America.

I have seen a president wisely hold back from leading the world into an all-out war that could have only ended with Nuclear weapons being used. I am not angry at the president of the United States. I love him, and I owe the man my life and the lives of the people that I love. In this politically charged world, Europe seems desperate for a war with Russia.

Iran seems to have a fully funded nuclear weapons program, whose funding has come directly from the Obama administration on your tax dollars and mine, and seeks to destroy Israel. In this world where Britain will blame Russia for just about anything, I am truly in awe of President Trump. He is a president who can not only manage all of these threats but calmly (Twitter feed notwithstanding) take control in a way that leads the entire world to a place of peace summits, trade negotiations and rebuilding of relationships with former enemies. I am referring to the relationships that America has with China, Russia, and North Korea.

What, Exactly, Are You Protesting?

If you are a Democrat, perhaps you protested against the Trump election. I cannot blame you, having had to look at this grumpy old man who will say anything he wants and seems like he could do anything. I understand your fears and I applaud them. I always encourage caution. Are you able to see how your life is better under his presidency? The tax cuts have added more money in your pockets, and there are more jobs than there are people to fill them. Your nation is stepping back from embroiling itself in wars it would have jumped on in the past [ZH: maybe not].

Nobody likes to be associated with the right wing. The very mention of the word conjures up images of skinhead barbarism, lynchings, and separatism. This is the New Right, we hold out open arms of welcome to all people. We want to continue a pursuit of peace in the entire world and want to bring everyone in with us.

Bernie Sanders has gone out of his way to show hatred to Christianity, Hillary Clinton has done nothing but throw temper tantrums over how she feels she has been ill-treated, and Joe Biden continues to fondle little girls in public and on YouTube videos. I urge you to do a YouTube search to see for yourselves.

Open Your Eyes, America

This world is in a real state of decay. Donald Trump, love him or despise him, has brought a new order to the world and has raised the standards for the entire planet. I implore you to give him a chance. I honestly do not think he is going to let any of us down. You may be wondering who am I to say this to you.

My wife has filed for divorce. Those people that I love have been taken from me. I am currently hunting for work in a nation that persecutes Christians and employs foreign labor at will because they are cheaper. I am one of the people who has more reasons to bitterly resent Donald Trump than most.

Instead, I choose to support him because he has quite literally saved the life of every man, woman, and child on this planet. It is time for you to see your good fortune in this man, and to support him in all that he does.

*  *  *

I am the first British citizen to be deported under Donald Trump and have become a Pro-Trump voice from here in the U.K.

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In the week since we first noted the new outbreak of Ebola in the Democratic Republic of Congo, the number of cases has risen by 50%, and The World Health Organization has now said it is preparing for “the worst case scenario.”

The WHO has tallied 32 suspected or confirmed cases in the northwestern area of Bikoro, on the shores of Lake Tumbathe near the border with the Republic of Congo, including 18 deaths, between April 4 and May 9.

The outbreak, declared by the DRC health ministry on Tuesday, is the DRC’s ninth known outbreak of Ebola since 1976, when the deadly viral disease was first identified in then-Zaire by a Belgian-led team.

Scientists are greatly concerned that this outbreak in the remote Bikoro region will travel 175 miles to the city of Mbandaka – the capital of Equateur province and home to around 1.2 million residents.

We’ve updated this map. Turns out that the provincial capital of Equateur, Mbandaka, is home to roughly 1M people. It’s less than 300 km or 175 miles from Bikoro and reachable by water. pic.twitter.com/3Q3PwAAdsh

— Helen Branswell (@HelenBranswell) May 11, 2018

What’s worrisome is that the most recent WHO update says that there are two probably cases at Wangata – which is very close to Mbandaka.

#EbolaDRC: This news gives me pause. @WHO‘s latest update says there are 2 probable cases at Wangata, which is adjacent to the provincial capital, Mbandaka. Population of Mbandaka = 1.2 million. https://t.co/LwlMGcAL7J pic.twitter.com/RVVO15m2F9

— Helen Branswell (@HelenBranswell) May 14, 2018

Peter Salma, head of emergency response at the World Health Organization (WHO) said last week: “If we see a town of that size infected with Ebola, then we are going to have a major urban outbreak,” adding “We are very concerned, and we are planning for all scenarios, including the worst-case scenario.”

Today I had the chance to see first-hand the #Ebola response in #DRC. Teams are motivated and working hard. I visited the hospital in Bikoro where patients are being treated, and lab technicians are testing samples. We’re working with our partners 24/7 to stop this outbreak. pic.twitter.com/JzYH3snmjM

— Tedros Adhanom Ghebreyesus (@DrTedros) May 13, 2018

The WHO is planning to send up to 40 specialists to the affected area over the next week or so, while Salma adds that the UN hopes to have a mobile lab up and running this weekend, similar to the one set up by the WHO. 

The WHO and World Food Programme are also working to set up an ‘air-bridge’ to help bring in supplies, however, only helicopters can be used until an airfield is cleared to allow larger planes to land, Mr Salama added.

The health body has released £738,000 ($1m) from its Contingency Fund for Emergencies to support response activities for the next three months. –Daily Mail

Mobile lab materials being shipped to strength rapid analysis of the samples from Bikoro, the #Ebola affected area in the Democratic Republic of the Congo, #DRC 🇨🇩 pic.twitter.com/vgmyqWhLFV

— WHO African Region (@WHOAFRO) May 12, 2018

Over 100 Red Cross volunteers in #Equateur province (50 in #Mbandaka, 60 in #Bikoro) now mobilized to fight the spread of #Ebola in #DRCongo.

Community volunteers and groups are critical to stopping the spread of diseases, especially in isolated areas. pic.twitter.com/oJ33Dn1CFB

— IFRC Africa (@IFRCAfrica) May 13, 2018

This marks the country’s ninth epidemic since the ebola virus was identified in 1976. When a small outbreak hit the DRC last year, eight people were infected and four died. In 2014, 66 were infected out of which 49 died – a 74% fatality rate. In the 2002-2003 outbreak, 90% of those infected died. That said, on average the disease kills around half of those who contract it. 

Ebola, a haemorrhagic fever, killed at least 11,000 across the world after it decimated West Africa and spread rapidly over the space of two years.

The pandemic was officially declared over back in January 2016, when Liberia was announced to be Ebola-free by the WHO.

The country, rocked by back-to-back civil wars that ended in 2003, was hit the hardest by the fever, with 40 per cent of the deaths having occurred there.

Sierra Leone reported the highest number of Ebola cases, with nearly of all those infected having been residents of the nation. -Daily Mail

Experts say the DRC’s vast, remote terrain provides an advantage, as outbreaks often remain localized and easy to isolate. Bikoro, however, is not far from the Congo river – an essential waterway used for transport and commerce. Downstream lies Kinshasa and Brazzaville – the DRC’s capital. The two cities are home to a combined 12 million people.

As such, neighboring countries are on high alert. Officials in Nigeria, Guinea and Gambia have incresaed screening measures along their airports and borders, measures which helped contain the virus during the West African epidemic that began in 2013. 

Angola, Zambia, Tanzania, Uganda, South Sudan, Central African Republic, Rwanda, Burundi and the Republic of Congo – which border the DRC – have all been alerted.

While Kenya, which does not border the country, has issued warnings over the possible spread of Ebola.

Thermal guns to detect anyone with a fever have been put in place along its border with Uganda and at the Jomo Kenyatta International Airport. 

Concerned health officials in Nigeria, which also does not border the DRC, have put similar measures in place to keep its population safe. -Daily Mail

Scientists believe Ebola is most often passed to humans by fruit bats, however porcupines, gorillas, antelope and chimpanzees could also be carriers. It is transmitted between humans through blood, secretions and other bodily fluids (and surfaces) of those infected. 

There is currently no “proven” treatment for Ebola, however dozens of experimental drugs exist – including a vaccine called rVSV-ZEBOV, which has reportedly protected nearly 6,000 people. 

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Authored by Alex Gorka via The Strategic Culture Foundation,

The US, Swedish, and Finnish defense ministers signed a trilateral Statement of Intent (SOI) to expand defense cooperation on all fronts. The signing ceremony took place in Washington on May 8. In 2016, the two Scandinavian nations finalized separate defense SOIs with America. Now they have signed a joint document to unify those previous agreements and enhance their interoperability.

The Scandinavian visitors claimed this was just a starting point for a more mature relationship. The agreement emphasizes the countries’ combined joint exercises and streamlines the procedures that have been established to manage them.

Other issues covered by the SOI include regular trilateral meetings at all levels, the exchange of information (including about weapons systems), increased practical interaction, cooperation in multinational operations, improved communications, and the promotion of the EU-NATO strategic partnership. The latter issue will transform the Scandinavians into a connecting link that will eliminate the chance of any European deterrent that could operate with any real independence from its North American “big brother.”  Washington wants to make sure that the PESCO agreement will not protect Europe’s defense industry from US companies.

Sweden hosted the Aurora military exercise in September 2017, the largest such event on its soil. The US supplied most of the visiting troops. The American military has also taken part in a number of drills in Finland recently. That country will host a large-scale NATO exercise as early as 2020 or 2021. The US has already been invited. The militarization of the Scandinavian Peninsula is moving full speed ahead.

The recently signed SOI actually transforms the bilateral agreements into enhanced trilateral cooperation.  For Stockholm and Helsinki, joining NATO is not an option for domestic political reasons. At least not for now. Instead, a new US-led defense alliance has emerged. 

The increased tempo of exercises anticipates a larger US presence. It has far-reaching implications. With American military personnel rotating in and out of Sweden and Finland, any offensive action against one of those states would officially be an attack on a NATO member.  It would trigger a response as envisaged by Article 5 of the Washington Treaty. Russia considers any American military presence there as provocative. The US is not a Scandinavian country. If an incident took place that resulted in a clash between Russian and US forces, the two Scandinavian nations would be pulled against their will into a conflict they may have nothing to do with. The American soldiers on their soil will never be under the control of their national commands. More US presence means less sovereignty and more risk.

Actually, since they are EU members they don’t even need Article 5, because Article 42.7 of the EU treaty also contains a binding mutual-assistance clause. France invoked it after the 2015 Paris terror attacks.

Last year Sweden and Finland joined the UK-led Joint Expeditionary Force (JEF).  All other participants in the nine-nation formation are NATO members. It means that in an emergency their armed forces will operate under NATO command, becoming parties to a conflict they could avoid if they were really neutral.   The two also cooperate with Washington through the Northern Group (NG), which consists of 12 countries, although Sweden and Finland are the only non-NATO participants. That organization holds its own dialog with the US. Another venue is the five-nation Nordic Countries group, that includes these two non-aligned members.

In reality, Sweden and Finland have already joined NATO through other groups and agreements.   They did so informally, avoiding referendums and the relevant parliamentary procedures at home. This should be viewed as part of a broader picture. In early April, the first-ever US-Baltic States summit took place in Washington. It was an unprecedented event that somehow was kept out of the media spotlight. 

The leaders of NATO’s “frontline states” called for a permanent US military presence in the region. They want that to be much larger than just American participation in multinational battalions. They are asking for a permanent presence on a much wider scale.  Washington, which already has forces deployed in Norway and Poland, is considering rotating American troops through the Baltic nations as well. Poland and the Baltic states are a focus of NATO’S bellicose preparations. One might as well forget about the 1997 Russia-NATO Founding Act (1997), which states that no substantial forces should be deployed in the proximity of the borders. That document has already been breached by NATO.

The US guests have provided advice on how to promote American influence (they call it “democracy”) in Georgia, Moldova, and Ukraine, the members of a newly formed anti-Russian alliance. and it’s not just the defense sector. Last year, Lithuania began importing liquefied natural gas (LNG) from America. Poland has also built an LNG terminal to expand the shipments of American gas to Europe, which compete with Russia’s energy supplies.

The withdrawal from the Iran deal is not the only time a US position on an issue has been opposed by the leading European nations. There are many more points of disagreement. Old Europe is gradually creating an independent deterrent.  A rift between the EU and the US is deepening. But as one can see, Washington is building another pro-American alliance on the continent. It does not mean it will replace the North Atlantic alliance. Certainly not. On the contrary, it will strengthen the US position in the bloc.

But aside from NATO, Washington also leads an informal alliance of “frontline states” that are intimidated by a nonexistent threat. The idea of the Russia bogeyman is being exploited by the US in order to reach its foreign-policy goals. Northern Europe is being turned into a hornet’s nest, with its good-neighbor policy gradually being replaced with confrontation that benefits the US but makes the region less secure. 

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While there has been no official government explanation to the MH370 flight mystery that dominated the news for months after it occurred, experts on Australia’s 60 Minutes have put together what seems to be the most sensible re-creation of events that could explain the mystery of the missing plane.

Stunningly, experts agree that flight MH370 may have come down as an intentional act of mass suicide. The report was picked up by the Washington Post on Monday, who explained that “the plane’s 2014 disappearance and apparent crash were a suicide by the 53-year-old [pilot] Zaharie — and a premeditated act of mass murder.”

“The thing that gets discussed the most is that at the point where the pilot turned the transponder off, that he depressurized the airplane, which would disable the passengers,” said Larry Vance, a veteran aircraft investigator from Canada. “He was killing himself. Unfortunately, he was killing everyone else onboard. And he did it deliberately.”

Two of the most prominent mysteries of the flight were the lack of communication from the plane and a mysterious left turn that had yet to be explained. As the Washington Post describes, the plane’s communication was likely turned off on purpose…

But the “60 Minutes” experts tried to answer one of the biggest questions surrounding the flight: How could a modern aircraft tracked by radar and satellites simply disappear?

Because, they say, Zaharie wanted it to. And the veteran pilot, who had nearly 20,000 hours of flight experience and had built a flight simulator in his home, knew exactly how to do it.

For example, at one point, he flew near the border of Malaysia and Thailand, crisscrossing into the airspace of both, Hardy said. But neither country was likely to see the plane as a threat because it was on the edge of their airspace.

…and the “unexplained” left turn could have been the pilot looking to take one last glance of his hometown:

Zaharie’s suspected suicide might explain an oddity about the plane’s final flight path: that unexpected turn to the left.

“Captain Zaharie dipped his wing to see Penang, his home town,” Simon Hardy, a Boeing 777 senior pilot and instructor, said on “60 Minutes.”

“If you look very carefully, you can see it’s actually a turn to the left, and then start a long turn to the right. And then [he does] another left turn. So I spent a long time thinking about what this could be, what technical reason is there for this, and, after two months, three months thinking about this, I finally got the answer: Someone was looking out the window.”

“It might be a long, emotional goodbye,” Hardy added. “Or a short, emotional goodbye to his home town.”

As for the silence on board, experts believe that the pilot depressurized the cabin on purpose, knocking everybody on board unconscious (who was not wearing an oxygen mask, which it is assumed the pilot would have been wearing). As the report put it, “that would explain the silence from the plane as it veered wildly off course: no mayday from the craft’s radio, no final goodbye texts, no attempted emergency calls that failed to connect.”

The entire 60 Minutes piece can be viewed here.

If this re-creation of events is accurate, the explanation for MH370 bears a striking resemblance to Germanwings Flight 9525, which crashed in 2015 as a result of the co-pilot deliberately bringing the plane down. French prosecutors noted that the co-pilot had locked the pilot out of the cockpit and deliberately crashed the plane just days after the incident took place in March 2015. The incident spawned outcries for better mental health screening and requirements for pilots:

Aviation agencies around the world should draw up new rules requiring medical workers to warn authorities when a pilot’s mental health could threaten public safety, French investigators recommended Sunday after a yearlong probe into the Germanwings plane crash.

The French investigation found that Germanwings co-pilot Andreas Lubitz, who had been treated for depression in the past, had consulted with dozens of doctors in the weeks before he deliberately crashed a jet into the French Alps on March 24, 2015, killing all 150 people on board.

Again, this re-creation of MH370’s events were put together by aviation experts and not by any governmental agency, but the postulations seem to be one of the only plausible stories that, frankly, makes any sense. 

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