SAVE OUR DOMESTIC ENERGY PRODUCERS

I view it as critical to U.S. national security to preserve North American oil production.

Therefore, I propose a $20 per barrel tariff on all crude originating outside of the U.S., Canada or Mexico, effective immediately.

We must not allow North American producers to fail. They are now and will be our lifeline in the future.

US AGAINST THEM

So, was it really a Saudi hissy fit that led to a raft of supertankers loaded up and headed for the Gulf Coast?

If you listen to the "experts" and the pundits, you will not hear anyone speak honestly about why the West Texas Intermediate contract has tanked (and gone temporarily negative for the first time ever).

Of course, there is viral demand destruction with no end in sight.

Then, there is the "official line", which goes something like this: "The Saudis were pushing OPEC+ for big production cuts to stabilize prices against possible demand destruction, but the Russians wouldn't 'play along'. "Oh, no?" the Saudis proclaimed. "Well then, I'LL SHOW YOU!" At which point Aramco (the publicly traded Saudi national oil company) decided that they would open the taps to the fullest and would contract every available supertanker at 5x the going rate, fill them up, and send them steaming toward the U.S. Gulf Coast refineries.

Of course, the "official line" isn't worthy of repeating because it is patently false. The "spat" that is alleged between the Saudis and the Russians is pure theater to provide political cover for the horrible thing that they have done: they have driven a knife into the heart of the U.S. shale oil boom and into the U.S. financial system at a time when our sole focus is on containing a lethal viral pandemic that has curiously expanded in the U.S. far faster and wider than in any other nation.

Last year, the U.S., through pure grit, innovation and determination, took over the #1 spot in oil and gas production, in spite of having no easily accessible reserves. This achievement cannot be understated, as it played a big role in the U.S. economic resurgence on the heels of the financial crisis and "Great Recession". The Saudis and Russians have huge oil reserves, but unlike in the U.S., these reserves are easily accessible and very low cost. It is estimated that the Saudis can pull a barrel of oil out of the ground for about $12 and the Russians for about $18, compared to about $28 per barrel for the majority of U.S. producers.

What essentially happened here is pure Machiavellian strategy: the #2 and #3 producers joined forces at the cusp of the greatest energy demand destruction the world has ever seen to INCREASE PRODUCTION for the purpose of rapidly and decisively driving the #1 U.S. shale producers out of business based on the logic that at $12 and $18 they could outlast any producer at $28.

The global oil business is not a game for the faint of heart, and I recognize that. But, if you are in a fight with someone and they fall down for no fault of their own, you typically allow them to regain their footing before resuming the fisticuffs.

Of course, that would be far too gentlemanly for the Saudis or the Russians. I guess I can understand the Russian animus toward the U.S. as decades of sanctions have hurt those close to Putin deeply. But, et tu MBS? We all assumed that Saudi Arabia was an American ally. I mean, we have taken the most strident of hard lines against their sworn enemy, the Iranians. We have not put any restrictions on their arms purchases or strategic support during their (genocidal) war in Yemen. We have generally avoided conflict with Saudi Arabia and the U.S. presence in the Middle East is a bulwark that generally protects the Saudi Royal Family.

So, why did the Saudi leadership decide to take this action when it was patently obvious that dramatic supply increases would be catastrophic for U.S. producers and for the U.S. economy?

In 2007 - 2008 the U.S. convulsed as a huge number of mortgage-backed securities went tits up, leading to a severe banking crisis as most banks quickly found themselves to be severely under-capitalized. To put things in perspective, the tidal wave of defaults that are likely to result from the combination of the pandemic and the oil war could make the mortgage-back security fiasco look like an appetizer. Surely, the Russians and Saudis knew this.

What is in the process of occurring is that U.S. shale producers are shutting in as much production as they can, laying off anyone and everyone, and sitting down with their lenders to chart a path forward. Most of those lenders and going to take a bath on this, and the destruction of wealth will take decades to recover. Which means that when oil is back above $45 a barrel it is unlikely to see the same vigorous U.S. response. The U.S. #1 position is effectively finished, and this is bad for America.

Thank you very much, MBS!

P.S.

I have a theory as to why MBS wants so badly to fuck America, and it has a name: Jared Kushner.

Jared Kushner put forth such an bad faith effort toward an Israeli/Palestinian peace that the Arab world was deeply angered. The idea that the U.S. Administration would green light and rubber stamp such as ridiculous plan made all Arabs realize that the current government is not their friend or ally.

We Must Make Sure This Never Happens Again

WHAT THE ACTUAL F@CK!!

The economic and social impact of the ongoing SARS-COV2/COVID-19 pandemic will be huge and long-lasting, but it did not have to be that way.

Post 9/11 the U.S. began strategically monitoring to defend against acts of terrorism with radiation monitors at all our ports, increased screening at our airports, and extensive monitoring of electronic communications for the purpose of preventing the next 9/11.

Well, the next 9/11 is upon us and, in spite of trillions of dollars of spending on defense in the intervening years, we were catastrophically unprepared. It is completely conceivable that COVID-19 is a disease that emerged from a lab. It is perfectly conceivable that it was induced to propagate globally for the purpose of weakening U.S. and NATO resolve and ability to respond to acts of aggression. Whether that is the case or not, that is what seems to be happening: China has brought their domestic contagion under control at a very low and manageable 0.006% of the overall population, while the U.S. and the U.K. could see up to a 60% infection rate before this is over. The shift of power that will result from this disproportionate impact will be profound. Already, just weeks into the pandemic, Chinese companies, with backing of the Communist Party of China (CPC), are looking to take control of European companies at fire-sale prices, with warnings coming from the Germans and others. The Chinese Navy rammed and sank a Vietnamese fishing trawler in international waters and sailed an aircraft carrier too close to Taiwan. These provocative acts will continue and will lead to a new era of Chinese colonialism in Asia, Africa and elsewhere.

Sadly, we could and should have seen this coming. Recent innovations in gene editing have made it literally child's play to manipulate the genome of any organism for whatever purpose. That same technology can be used to manipulate the relatively simple genome of existing lethal viruses to make them even more lethal or more transmissible. We do not know that the SARS virus wasn't genetically modified in this way, leading to the SARS-COV2 virus.

Western democracies are uniquely vulnerable to biological warfare because of the ability of their citizens to move freely and the resistance of those citizens to government supervision and control. At the same time the CPC has been conditioning its citizenry to the very sorts of controls and monitoring that are absolutely critical to prevent transmission of a virus in an epidemic. For example, the CPC already has routine access to the GPS location functionality of all cell phones connected to their cellular networks (virtually each and every Chinese citizen has their own cell phone and cell phone number which they need to access a myriad of goverment programs and services or to do simple things like buy a train ticket). During the quarantine period they used this functionality to "geo-fence" its citizenry and the police were automatically alerted to unusual movements. They also have blanketed the country with video surveillance which was utilized to great effect to detect quarantine violators. Finally, they have implemented a "social credit score" system to condition its citizens to always follow all official instructions and mandates. In other words, the CPC has invested billions of dollars in preparing themselves for what the U.S. and Europe are only just now trying to come to grips with.

We may or may not ever know if this pandemic was unleashed on the world as part of a Machiavellian plan for world domination, whether it accidentally escaped from a virology research lab, or whether if it passed from animal to human like so many viruses do. At the end of the day, that is not the most important consideration. Most important are the lessons that we learn from this experience and how we prepare for the next threat, because there will be future threats.

OK, SO WHAT NOW?

As is the case of any transmissible human pathogen, keeping the pathogen as far away as possible from the population you are trying to protect is obviously the primary objective. Therefore, I recommend a fast and draconian response to reports of outbreaks outside of the U.S. of any novel virus with the potential to grow and spread. The response should include:

• Immediately send U.S. specialists to the region of the outbreak to take samples and assess the virulence and to provide assistance in containment efforts. Experience has shown that we cannot trust the information provided by the infected country or by the World Health Organization and we can only trust our own experts to make proper assessments on the ground.
• Immediate freeze all non-essential travel to the United States from all countries, including Canada and Mexico, until such a time as the outbreak is brought under control, even if there are zero known cases in the U.S. or any of the other countries from which travelers originate. This means no shopping trips, no tourism, no family visits, no business trips to the U.S., no international connections through U.S. airports to other destinations, no foreign students, no immigration, legal or otherwise, until the danger has passed.
• U.S. citizens wishing to return to the United States from other countries must be subject to screening and be obligated to respect a legally-binding and verifiable quarantine period. U.S. citizens arriving from or having passed through viral hotspots must be placed in government confinement to ride out their quarantine period, away from family and friends.
• As soon as a reliable test is available begin random testing of anyone coming into the United States and of testing anyone already in the United States who exhibits symptoms consistent with a novel virus.
• Apply biohazard containment protocols at all ports of entry to the United States to prevent border personnel from becoming infected. Close those ports of entry that cannot comply with protocols. Biohazard protocols should include, but not be limited to, safe distancing of travelers, the use of N95 respirator masks, face shields, and Tyvek suits with special training on how to safely utilize this equipment.
• Implement special screening procedures at hospitals, clinics and doctors offices and consider all suspect cases as positive to prevent cases of novel viral infection from being spread in the healthcare setting. In many cases, the first known cases of community spread were between primary care physicians and their patients because the doctors did not realize that the patients might be carrying a lethal virus until it was too late.

Clearly, implementing such austere and draconian measures when the outbreak is small, of unknown danger and even geographically far away will be unpopular and disruptive, but these impacts must be weighed against the costs associated with allowing the virus to take root here in the U.S. We should work closely with Canada and Mexico during this period to make sure that they have all the support that they may need, and to make sure that they are taking their own precautions.

In spite of these measures being implemented early, there is still a high likelihood that a certain number of infections will get through. What should we do once "the barbarians are inside the gate", so to speak?

• Immediately restrict movement of the population to and from the area where an outbreak has been detected, to include the closure of tunnels, bridges, and highways to all non-essential traffic (this will require a martial law declaration).
• Close schools, non-essential businesses and ban public gatherings in the target area.
• Implement stay-at-home regulations in the target area.
• Provide immediate emergency financial support to the affected citizens and businesses to encourage compliance and mitigate harm.
• Immediately implement contact tracing and testing of suspected cases of infection.
• Continue these restrictive measures until such as time as there is no detectable spread, and not before.

Hopefully, the combination of swift border restrictions and fast containment measures will limit the number and size of outbreak and prevent wider infection, enabling the large majority of the population to continue life as usual and limit impacts on the domestic economy at large.

In the case of the current pandemic, a shortage of personal protective equipment such as N95 masks has fueled the spread of the virus. Not only did the U.S. have inadequate stockpiles, we lacked the manufacturing capacity to remedy the deficiency. It is critically important that all essential goods and materials be sourced right here in North America, even if it is at higher cost, to insure adequate supplies in the event of emergency.

We should imagine a scenario in which all transoceanic trade has been disrupted and then extrapolate the impacts to all sectors of the economy. Domestic or regional sources of supply must be developed for affected goods and materials. We can count on Canada and Mexico to be our trusted partners and manufacturing capacity in these countries should count toward the total.

Helping other countries to control the pandemic ultimately makes the U.S. safer by reducing the risk that it will reach our shores, so every effort should be made to help affected countries managed the outbreaks.

SAFE ON OUR OWN ISLAND?

Due to our geographic isolation and wealth of natural resources, the United States, Canada and Mexico are in a unique position to ride out any global pandemic or other shock while avoiding shortages of food or important supplies SO LONG AS WE CULTIVATE LOCAL SOURCES OF SUPPLY OF ALL NECESSARY GOODS AND MATERIALS AND CAN KEEP OURSELVES FREE OF INFECTION. Therefore, in the aftermath of the SARS-COV2/COVID-19 pandemic we must necessarily look inward for strength and sustenance and to insure that when the next pandemic hits we can respond quickly and decisively to keep North Americans safe.

GOD BLESS AMERICA!

Bernie Sanders is a Bad Salesman

Body language speaks volumes and Bernie's body language is not welcoming or inclusive.

Too bad that Bernie won't be around to see it happen -- that is how badly he has hurt his own cause.

The real shame is that if he had been a better salesman the outcome might have been different. Bernie Sanders is like the dog who chases cars. You know that if he finally catches a car he won't know what to do and he won't be able to form a coalition to figure it out, either. Because angry dogs who chase cars don't form coalitions.

It is time for a new personality to carry the flag from here. And I use the word flag deliberately, because Bernie Sanders has failed to invoke patriotism in support of his agenda. He does not sell it as our patriotic duty, he sells it like, "Just listen -- we are the only western democracy who doesn't have universal health coverage and if you idiots weren't so stupid you would see that."

I'm sorry, but that is not a sales approach.

When the industrial military complex wants a new aircraft carrier they invoke the flag and patriotism. When active duty military members want better pay and benefits they invoke the flag and patriotism. Now that is a sales approach.

WHAT IS MORE PATRIOTIC THAN DEFENDING THE HEALTH OF AMERICANS HERE AT HOME?

Somehow, this simple and obvious truth has evaded Bernie Sanders and he is pitching his plan on moral grounds, not on patriotic grounds.

Instead he should be drumming home this equivalency:

UNIVERSAL HEALTH CARE = NATIONAL DEFENSE

Most Americans would agree with this statement:

"What good is a shiny new aircraft carrier if a member of your family member cannot get access to the insulin needed to control their diabetes?"

Unfortunately, I have never heard Bernie Sanders use this equivalency as an argument. He keeps talking about universal health coverage as a moral imperative, the evidence of which is that every other OECD country already has it.

Sorry, Bernie, you've spent so long as an outsider, griping and sniping, that you are unable to sell this to the public. Time for a new messenger.

And, hopefully they can drop the mantle of "democratic socialism" which is non-starter in America. Universal health coverage is 100% compatible with capitalism, patriotism and nationalism. Presenting it as a "socialist" agenda is wrong and damaging to the effort.

Protect Domestic Oil and Gas Producers from the Oil Price War

Saudi Arabia is a strategic ally but their actions threaten our security.

The Saudis and the Russians have joined forces in yet another effort to knock the United States out of the #1 position as petroleum producer. To do this, they are taking advantage of the inevitable weakening of demand because of the COVID-19 pandemic to magnify the impact of their supply increases.

What the world markets need in a time of crisis is stability, yet the Russians and Saudis seem hell-bent on kicking us while we are down.

What can we do about this?

• Maximize diplomatic efforts to convince the Saudis and Russians that price stability is what is most important right now.
• Leverage the strategic relationship to put pressure on the Saudi leadership.
• Ban the import of any foreign crude until the crisis has resolved, except for Canadian crude.
• Use a portion of the federal excise tax to create a subsidy for domestic producers to help them weather the storm. For example, a $5 per barrel subsidy would only cost $1.9B per month and would be more than sufficient to keep domestic producers afloat.
• Add to the U.S. Strategic Petroleum Reserves, to include the addition of new storage capacity if needed.

The world is at risk of shifting into a deflationary spiral which could be very destructive to wealth and to the debt that this wealth back-stops. Therefore, efforts must be made to stabilize markets while we work our way through the curent health crisis.

Don't Let The Response to COVID-19 Be Worse Than The Disease

No, COVID-19 is NOT the zombie virus

UPDATE 3/17/2020:

So I just came across correspondence published in The Lancet on 3/11/2020 and it is some scary stuff.

Here is what the Lancet has to say about these results:

"Estimates will increase if a longer delay between onset of illness and death is considered. A recent time-delay adjusted estimation indicates that mortality rate of COVID-19 could be as high as 20% in Wuhan, the epicentre of the outbreak. These findings show that the current figures might underestimate the potential threat of COVID-19 in symptomatic patients."

(https://www.thelancet.com/journals/laninf/article/PIIS1473-3099(20)30195-X/fulltext)

So, yikes, this certainly got my attention. However (and, this is why random testing is so important and failing to test randomly so dangerous), people who got infected but were not reported as infected to the authorities because they experienced mild symptoms and recovered at home were NOT considered in this study. Therefore the true mortality rate could be MUCH LOWER.

Here is what the authors had to say on that point:

"Notably, the full denominator remains unknown because asymptomatic cases or patients with very mild symptoms might not be tested and will not be identified. Such cases therefore cannot be included in the estimation of actual mortality rates, since actual estimates pertain to clinically apparent COVID-19 cases."

 Nonetheless, this article is going to scare people way more than they might otherwise be scared, which will lead to an increased risk of panic, chaos and a more draconian government response.

IT IS PAST TIME FOR RANDOM TESTING TO GET A HANDLE ON HOW MANY CASES ARE PRESENT IN THE GENERAL POPULATION -- IS ANYONE LISTENING?

UPDATE 3/16/2020:

Only through random testing can the CDC determine how prevalent the COVID-19 virus is, but for some reason the United States doesn't have enough test kits to engage in random testing, and the test kits we do have take several days to produce a result, while the rest of the world has ample test kits that can produce a result in 4 hours.

For unknown reasons the CDC refused to adopt the WHO test kit in favor of a homegrown option that we are still waiting for.

By the time the test kits arrive the virus will be everywhere and it will be too late, so nice work killing people.

UPDATE 3/15/2020:

If COVID-19 is mainly a threat to those over 60 years old, pregnant women, and anyone else who is immuno-deficient (such as people receiving cancer treatment), doesn’t it make more sense to isolate that sub-group and let the rest of the population go about their business as usual in order to develop herd immunity?

Herd immunity can be highly effective in stopping viral flare-ups when more than half of the population are immune and cannot spread the virus.

Until a vaccine is available, letting people fight the virus naturally might help us control future outbreaks.

Because the economic impact of weeks and weeks of closures brings with it greater costs and risks to society, including permanent wealth destruction and dangerous deterioration of the social order.

ORIGINAL POST 3/11/2020:

I think it is important to remember that while the novel coronavirus that is currently racing around the globe is new and is highly contagious it is only lethal to those who are already immuno-comprised, such as is the case in the elderly or the infirm. In fact, some estimates indicate that at least 80% of those infected suffer only very mild symptoms.

In that regard COVID-19 is better than the regular influenza strains that circulate each year.

Which is not to say that COVID-19 isn't a virus that is worth protecting ourselves from.

The questions is this: how far is too far to go in efforts to prevent the spread of the virus?

Epidemiologists current estimate that it is virtually impossible to prevent COVID-19 from infecting up to 60% of the world's population and that current efforts at control are doomed to fail. However, these efforts could easily bankrupt us, leaving us in a financially weak position and unable to deal with the treatment of the infected.

So, what is the appropriate response? Basically, to resign ourselves that this thing is coming and there is no stopping it, and that we should prepare emergency treatment facilities to deal with the approximately 10% of infected who will require life-saving measures.

We should NOT attempt to quarantine the population at large (such as what Italy is doing currently) or take any other measures that deviate in any significant way from the routine.

Yes, this means that the virus will rage for a while and many people will die, but that is all but inevitable in any event. We should be focused at this time on keeping our powder dry and preparing to do our best to save the infected who present with severe symptoms.

And, above all, DO NOT PANIC.

Reference

https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)30567-5/fulltext

Are We At War with Iran Already?

This molten heap of metal is the SUV in which Iran's top general was traveling,
after it was hit by U.S. missiles.

For a moment let's imagine a scenario: U.S. General Mark A. Milley, Acting Chairman of the Joint Chiefs of Staff, is killed when his motorcade is attacked with missiles launched from an aircraft flying the flag of the Islamic Republic of Iran. Now, in what universe would the U.S. not take this as a blatant act of war?

Therefore, we must be clear that the assassination of Iranian General Qasem Soleimani, who, by all accounts, was the ranking member of the Iranian military, was an act of war.

However, we have not openly declared war on Iran and we try to deny that our actions amount to an act of war. Why is that? Does it not make more sense to be clear about what it is we are doing, in order to rally support at home and abroad and in order to expedite a resolution to the conflict?

Make no mistake: actions on both sides of this conflict are part of a clear march toward war and the same questions could be asked of Iran; is Iran in open conflict with the U.S.? Were the attack on the U.S. Embassy in Baghdad, the multiple missile attacks on U.S. bases in Iraq and Syria and the downing of a U.S. drone in the Persian Gulf not overt acts of war? When non-state actors like ISIS take similar actions we do not hesitate to declare ourselves at war with them -- why not with Iran?

This conflict should be called what it is and decisive action should be taken, or we should step back and let our allies carry water for us. I am not a fan of leaders who incite to war but claim to not seek war.

If Iran wants war with the U.S. then let them have it and stop all this pussy-footing around.