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CHART OF THE WEEK: The Surprising Drop In U.S. Crude Oil Production

CHART OF THE WEEK: The Surprising Drop In U.S. Crude Oil Production

U.S. crude oil production experienced a surprising drop last week, even though domestic demand for oil and petroleum products increased.  This came as a surprise to some energy analysts.  Furthermore, the IEA, International Energy Agency came out with a forecast for global oil demand to fall 8.1 million barrels per day in 2020.

I have to say, this is terrible news coming from the IEA.  Just last month, the IEA stated that global oil demand could fall to 7.1 mbd (million barrels per day), but only recently updated their forecast for an 8.1 mbd decline in 2020 due to “gloomy airline travel.”

Actually, we don’t really know what global oil demand will look like by the end of the year.  There are way too many variables.  Even though the Fed and central banks are planning to pump in more stimulus plans over the next few months, the negative SNOWBALL EFFECT of all the closed stores, unemployment, commercial real estate armageddon, collapse in airline travel, supply chain disruptions, and so forth, will likely impact oil demand to a greater degree by the end of 2020 and into 2021.

Another CURVEBALL to hit the United States is the coming collapse in U.S. Shale oil production.  While some companies have curtailed production, and are now bringing some of it back online, total U.S. crude oil production surprisingly declined to 10.7 mbd last week.

U.S. crude oil production reached a peak of 13.1 mbd in late February, right before the global contagion and shutdown of economies.  It fell to a low of 10.5 mbd in mid-June, then rebounded to 11.0 mbd for the next two months.  However, in the lasted EIA, U.S. Energy Information Agency weekly report, U.S. oil production fell from 11.0 mbd to 10.7 mbd last week.

…click on the above link to read the rest of the article…

Today’s Contemplation: Collapse Cometh II

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Monte Alban, Mexico (1988) Photo by author.

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Today’s Contemplation: Collapse Cometh

Today’s Contemplation: Collapse Cometh

As I approach my 7th decade on this planet, I have reached the conclusion that we all interpret the world through mythical narratives; some of our own creation, many (most?) others ‘imposed’ upon us. The ruling class of society conditions us in numerous ways to accept stories that, for the most part, support and prolong their position of power and control.

From hereditary chieftains/monarchs to ‘democratic’ leadership, the ‘elite’ of society maintain a hold over the ‘tribe’ so as to ensure their revenue streams and wealth (some would argue this is a parasitic arrangement since this class returns little in the way of productive value to the system). They use the various tools at their disposal (e.g., education system, media, etc.) to inculcate/predispose us to accepting this arrangement and continuing to control and expand the wealth-generating/extraction systems that arise from everyday human economic interactions.

Power and wealth is concentrated significantly at the top of the pyramid; yet we are constantly exposed to narratives that we not only have agency, but that the ‘elite’ put our needs at the forefront of their policies and decision-making. I strongly believe these are false and propagated to influence/manipulate our thinking and beliefs.

Just like our financial institutions (especially the big banks) who knowingly engage in criminal activity and then receive raps on the wrist with minimal fines when caught (making their brazen thievery well worth it), the ruling class is more than willing to break ‘rules/laws’ (in fact, I would argue they are constantly doing so) because the ‘price’ for doing so is negligible (with the occasional sacrifice made to appease the masses).

I don’t believe there is a ‘solution’ to any of this (unlike most who do because, you know, hope–and reduction of cognitive dissonance) aside from complete sociopolitical collapse–which I would argue will eventually happen as it has for every complex society that has preceded ours. My response to this has been to accept it, and try and remove myself from the Matrix as much as is possible and prepare accordingly.

The world is not as we have been conditioned to believe by the narrative managers who weave the various storylines (read Edward Bernays book Propaganda for interesting insight on this). Awareness of this is a first step towards a better understanding of how messed up this world truly is and, possibly, doing something for your family/community to make it more resilient as the system inevitably declines/collapses.

The COVID-19 “Lockdowns” Are What Twenty-First-Century Mob Rule Looks Like

The COVID-19 “Lockdowns” Are What Twenty-First-Century Mob Rule Looks Like

mob

As of April 6, forty-one states have statewide “stay-at-home” decrees in place. These orders vary widely from place to place. In some states, there are long lists of exempted industries including marijuana dispensaries, liquor stores, hardware stores, and of course, grocery stores. In some states with these edicts, public lands, state parks, and beaches remain open. In some states, city parks are more crowded than ever as local residents, with little else to do, attempt to recreate. In other places—such as California—one can be arrested for paddleboarding all alone in the ocean.

Yet in all of these places, the current regime of rule by decree will have—and already has had—a devastating effect on many small and medium-sized businesses and their employees. As governments have created new arbitrary definitions of what constitutes an “essential” business, some businesses find themselves forced to close. Employees have lost these jobs. The owners of these enterprises will likely lose far more as debts mount and business investments are destroyed. As unemployment and poverty increase, the usual pathologies will arise as well: suicides, child abuse, and stress-induced death.

Yet the politicians—mostly state governors, mayors, and unelected bureaucrats—remain popular. In New York State, where the lockdown orders are among the most draconian in the nation, it is now claimed that 87 percent of those polled approve of Governor Andrew Cuomo’s handling of the situation. As Donald Trump’s administration has recommended ever harsher government limits on the freedom of Americans, his poll numbers have only improved. 

Meanwhile, among critics there appears to be a misconception of these lockdowns (which are very often only partially imposed or enforced) as being imposed over the howls of the local population, which is being silenced and cowed by jackbooted local police.

…click on the above link to read the rest of the article…

Gold Soars Along With Everything Else As Fed Ends Capital Markets As We Know Them

Gold Soars Along With Everything Else As Fed Ends Capital Markets As We Know Them

As we noted earlier,  The Fed’s actions this morning mean “free markets are dead.

Guggenheim’s Scott Minerd summed up exactly what The Fed has done with its actions today:

“The Fed has made it clear that it will not tolerate prudent and responsible investing.”

The Fed just went full Leeroy Jenkins…

And gold is starting to signal fears over fiat…

Something is brewing…

And the spot-futures markets are decoupling as physical (geographic) shortages rear their ugly heads again…

Source: Bloomberg

As Bloomberg notes, the internal mechanics of the gold market are again showing strains under this rally. Gold futures are trading more than $50 above the spot price in London.

Until recently, that was unheard of in a metal that’s so utterly fungible, so easy to transport and where trade channels are so deeply established. But with planes grounded and refining capacity severely restricted, don’t expect the arbitrage to break down immediately.

Bloomberg’s Garfield Reynolds was quick to note, the global business environment is being transformed – we are all socialists now.

…click on the above link to read the rest of the article…

Japan & Russia Report Worrisome Surge In New Cases, Britons Warned Lockdown To Be Extended: Live Updates

Japan & Russia Report Worrisome Surge In New Cases, Britons Warned Lockdown To Be Extended: Live Updates

As Holy Week draws to a close and the long Holiday Weekend begins, the optimism that helped inspire the biggest bounce since the ‘rona rout appears to have faded, and Dow futs are back to being three figures in the red Thursday morning, pointing to a lower open as traders realize the ‘plateaus’ supposedly reached in Italy, Spain and New York didn’t really mean anything. And while the Germans truly do seem to be on top of things, other hotspots in Europe are already cropping up, as China tightens its borders as experts warn about a ‘second wave’.

Over the past 24 hours, the US reported 32,176 new cases of coronavirus and 1,901 new deaths, raising its totals to 432,727 cases and 14,768 dead, with the most widely followed projections suggesting that the US will pass half a million confirmed cases before Easter Sunday. Yesterday, NY reported its biggest one-day jump in deaths yet, and the pace of spread appeared to accelerate across Europe.

Now, we wake of Thursday morning to find that officials in Tokyo and Moscow have reported record numbers of new cases (that, and Russia recorded its biggest daily jump in deaths).

Meanwhile, as the US moves to try and stop the IMF from approving Iran’s request for a $5 billion bailout, the Ayatollah has once again chosen to retaliate in the only venue Trump truly understands: Twitter.


#CoronaVirus is a major problem for mankind. But we won’t forget that in Vietnam, Iraq, etc. hundreds of thousands of ppl were killed by the US. Even now, millions suffer from the tyranny of the US & its allies in Yemen, Palestine, etc.
Mankind has worse problems than Corona.


…click on the above link to read the rest of the article…

“No Hope”: Canada’s Nursing Homes Prepare For Mass Death

“No Hope”: Canada’s Nursing Homes Prepare For Mass Death

Nursing homes in Canada have been instructed by health officials to ‘keep seniors comfortable’ if they contract COVID-19 and not take them to the hospital due to their high mortality rate, according to Canada’s Global News.

They’re treating it like a hospice, like there’s no hope like they have stage four brain cancer and they just have to keep them comfortable because there’s nothing they can do,” said Tanya Bartley, whose grandmother died last month at Pinecrest Nursing Home in Bobcaygeon, Ontario – where 22 residents have died and 1/3 of the staff are in isolation due to coronavirus.

“They don’t play god. Everybody is the same. I don’t care if it’s a two-year-old, a 10-year-old, a 20-year-old, middle-aged, elderly. I don’t care,” Bartley added.

One dementia-stricken resident, Edna Bowers, was one such coronavirus victim who was treated at the home and not transferred to the hospital.

In a March 23 letter seen by Global News, Dr. Allan Bell – medical director and chief of emergency medicine at Quinte Health Care (QHC) in Belleville, Ontario, outlines suggestions on how long-term care administrators should prepare for potential COVID-19 outbreaks in their facilities.

“Having this conversation pre-emptively is very important. It gives families time to digest the information when they are not in a crisis situation and, should an outbreak happen, it is difficult to manage all of the conversations at once,” reads the letter in part, while also recommending against hospital visits – citing a shortage of medical options for frail patients.

Our critical care colleagues are of the strong opinion that ventilator treatment will not make a survival difference to patients who are frail and ventilator support is very unlikely to be offered,” the letter continues “for those residents who go on to develop respiratory failure, care needs to focus on the provision of comfort to ease suffering at the end of life.”

…click on the above link to read the rest of the article…

CDC To Recommend ALL Americans Wear Masks?

CDC To Recommend ALL Americans Wear Masks?

Dr. Matt McCarthy – Assistant Professor of Medicine at Weill Cornell,staff physician at New York-Presbyterian Hospital, and author of Superbugs: The Race to Stop an Epidemic– claims that the CDC is about to do a 180 degree change, and to recommend that everyone wear masks.

If true, such a change would be very helpful.  Specifically, numerous studies show that “facemasks play a pivotal role in the prevention and control of infectious respiratory disease transmission“. 

Indeed, a study last year by scientists at the Departments of Chemical & Biomolecular Engineering, University of Maryland, and the FDA’s Division of Applied Mechanics, showed that – if 80% of a population wears masks – it will stop a flu epidemic (it “essentially eliminated the influenza outbreak”).   They found that if half of a population wore masks, it “resulted in a significant … reduction in risk” (the typical flu virus is between 80 and 120 nanometers in diameter. The Wuhan Coronavirus is 120 nanometers).

Many other studies and metastudies show that masks are effective in combatting respiratory virus pandemics:

And the Czechs claim that they’re succeeding while many other countries have failed because of a widespead use of home-made masks.

The New York Times notes:

As the coronavirus pandemic rages on, experts have started to question official guidance about whether ordinary, healthy people should protect themselves with a regular surgical mask, or even a scarf.

***

When researchers conducted systematic review of a variety of interventions used during the SARS outbreak in 2003, they found that washing hands more than 10 times daily was 55 percent effective in stopping virus transmission, while wearing a mask was actually more effective — at about 68 percent. Wearing gloves offered about the same amount of protection as frequent hand-washing, and combining all measures — hand-washing, masks, gloves and a protective gown — increased the intervention effectiveness to 91 percent.

…click on the above link to read the rest of the article…

The Unthinkable Is Happening: Oil Storage Space Is About To Run Out

The Unthinkable Is Happening: Oil Storage Space Is About To Run Out

In the past three weeks, oil plunged and has continued to plunge even more in the aftermath of the oil price war declared between Saudi Arabia and Russia, and where US shale (and its junk bonds) has been caught in the crossfire. However, as we reported last week, we may get to the absurd point when the price of a barrel of oil not only hits $0 but goes negative.

The reason: according to Mizuho’s Paul Sankey, at a whopping 15MM b/d in oversupply, crude prices could go negative as Saudi and Russian barrels enter the market. According to Sankey, much of the US 4MM bpd in crude exports will be curtailed as prices fall and tanker rates soar. And with US storage roughly 50% full, and able to take another 135MM bbl more, assuming a build rate of 2MM b/d, the US can add 14MM bbl/week for 10 weeks until full.

As a result, there is a now race between filling storage and negative pricing “unless U.S. decline rates can outpace inventory builds, which we very much doubt.” Said otherwise, absent dramatic changes, in roughly 3 months, energy merchants will be paying you if you generously take a couple million barrels of crude off their hands.

It went from bad to an outright disaster earlier this week when Goldman, Vitol, and the IEA all raised their estimate for daily oil oversupply to an unthinkable 20 million barrels per day, as a result of the collapse in oil demand as the global economy grinds to a halt coupled with Saudi Arabia’s determination to put all of its higher-cost OPEC peers out of business.

…click on the above link to read the rest of the article…

“We’re Pulling Out All The Stops”: Trudeau Promises To Help Canadians With Their Bills As He Leads Nation From Home

“We’re Pulling Out All The Stops”: Trudeau Promises To Help Canadians With Their Bills As He Leads Nation From Home

After his wife, Sophie Gregoire, revealed last night that she had been diagnosed with Covid-19 following a trip to London, Canadian Prime Minister Justin Trudeau – who apparently hasn’t been infected – said during a noon press conference on Friday that he is feeling fine, and will continue running the country from the comfort of his home office until he’s officially cleared to return to the office.

During a news conference held outside his home


Trudeau says Canada is “pulling out all the stops” to respond to COVID-19.

“I know that you’re worried. You’re worried about your health, about your family’s health. About your job, your savings. About paying rent. About the kids not being in school.” https://abcn.ws/2TYW18W 


Trudeau also said he’s spoken with world leaders including Trump, UK PM Boris Johnson and French President Emmanuel Macron, and assured Canadians that the G7 would deliver a “coordinated response” to the crisis. The leaders of the organization’s nation-state members will join a conference call on Monday to decide (or not) exactly what the nature of that response will be.

He said he’d be keeping in touch to provincial governors and indigenous leaders during his stay at home, and added that he’d be speaking with several of them later in the day.

In keeping with his liberal beliefs in open borders, Trudeau said Canada would continue to monitor foreign travelers and decide on “further measures that will be based on science.” In the mean time, the administration will be restricting international flights to fewer airports, to improve monitoring and screening, while asking some travelers to “consider” self-quarantine. He also advised Canadians against all “non-essential” traveling abroad, especially to areas impacted by the virus, at this time.

…click on the above link to read the rest of the article…

Coronavirus – The Catalyst For System Failure?

Coronavirus – The Catalyst For System Failure?

Overview 

Today’s global economic system is more intertwined than at any point in history. For the past 30 years in particular, globalization and the Theory of Comparative Advantage have been alive and well. Technological advancements and transportation improvements have truly ‘shrunk the world’, allowing more countries to participate and benefit from international trade.

The globalized world economy has become a vast network of complex supply chains, interconnectedness and co-dependence. The benefits have been wide-spread and done more to lift the human condition, and more people out of poverty, than any development in history. However, this increase in economic complexity has magnified global vulnerabilities, opening up the risk of rapid and large-scale failure and contagion: a period of anti-globalization. COVID-19 is the catalyst that is triggering a supply-side crisis; one that is further exacerbated by a simultaneous demand-side shock.

Consensus View 

The consensus view seems to be that the COVID-19 will die out with warmer weather; after all this is what typically happens with the common flu. In terms of markets, most believe that governments and central banks will come to the rescue with proactive stimulus which will be exceptionally good for markets, because the economy is viewed to be on solid footing already.  The stimulus will come to be viewed as an over-reaction that merely serves to provide more economic fuel, particularly once the Coronavirus sputters away. This scenario is logical and possible, but not a view that I share.

US Coronavirus Response

The US has a relatively low number of confirmed cases, but it is in direct proportion to the low number people tested. There is a shortage of testing kits and slow distribution to provide more. This is likely intentional. Trump is on Twitter bragging about the low number of positive cases in the United States as being a result of his administration’s actions.

…click on the above link to read the rest of the article…

Japan Confirms 10 nCoV Cases Aboard Quarantined Cruise Ship; Officials Warn Virus Could “Spread Widely Through Hong Kong”

Japan Confirms 10 nCoV Cases Aboard Quarantined Cruise Ship; Officials Warn Virus Could “Spread Widely Through Hong Kong”

Summary:

  • Confirmed deaths: 490
  • Confirmed cases on mainland: 24,324; additional 172 in ROW
  • Chinese authorities have enforced full community lockdown in Nanjing Province
  • American Airlines, Cathay Pacific and Jetstar close routes to China
  • Taiwan tightens travel restrictions
  • WHO infectious hazard chief says outbreak ‘not a pandemic’
  • Japan confirms at least 10 cases of coronavirus aboard “Diamond Princess”
  • Kudlow says impact on US economy from outbreak will be ‘limited’

*  *  *

Update (1845ET): At least 10 cases of coronavirus have been discovered aboard the Carnival Japan cruise ship “the Diamond Princess”, which has been quarantined at Japan’s Yokohama port since yesterday after officials learned that a passenger who recently disembarked tested positive for the virus in Hong Kong.


JUST IN: More than 10 people aboard a Japanese cruise liner have tested positive for #coronavirus, Japan’s @tbs_news reported, after all 3,000+ passengers were quarantined earlier Tuesday


As we reported earlier, 3,000+ passengers aboard the cruise ship are under quarantine. It’s unclear when they’ll be allowed to leave the ship. All individuals who were found to be infected with the virus were taken to a local hospital for treatment.

Meanwhile, after unveiling the city’s first virus-related death, Hong Kong health officials warned Tuesday that the coronavirus outbreak could “spread widely through Hong Kong.” Three newly diagnosed cases raised the total number diagnosed in the city to 18, with at least four of those cases being confirmed human-to-human transmissions, according to SCMP.

“It is highly probable the four were infected locally, so there could be invisible chains of infection happening within communities,” Chuang said. “We are not ruling out a large spread [of the virus] in the future.”

And for the second time in as many hours, health officials on the mainland updated the tally of confirmed cases.

…click on the above link to read the rest of the article…

China Curbs Travel To Hong Kong As Projections Show 300,000 Might Already Be Infected

China Curbs Travel To Hong Kong As Projections Show 300,000 Might Already Be Infected

Update (0700ET): Minutes ago, CNBC reported that the White House has held multiple meetings about the coronavirus led by Deputy National Security Advisor Matt Pottinger.


NEW: The White House has been convening multiple meetings on #coronavirus in recent days, convened by deputy national security adviser Matt Pottinger.

Readout from an admin official: Consensus that the issue is worsening but the extent to which is unclear.


The consensus: The problem is getting worse, though the true extent is unclear.

Are we about to learn about a new rash of infections inside the US? Considering that more than 100 people were under observation as recently as yesterday, we wouldn’t be surprised.

* * *

On Tuesday morning, China’s top health officials shared some grim statistics essentially confirming that the novel coronavirus believed to have emerged from a shady food market in Wuhan is on track to confirm some of the more dire projections shared by epidemiologists.

As we reported late yesterday, the death toll in China has soared past 100 while the number of confirmed cases doubled overnight. Health officials around the world have confirmed more than 4,500 cases, more than triple the number from Friday. All but a few of the deaths recorded so far have been in Wuhan or the surrounding Hubei province, per the SCMP.

Panic has swept across the region as border closures appear to be the overarching theme of Tuesday’s sessions. Even North Korea, which relies on China for 90% of its foreign trade, has closed the border with its patron. More than 50 million remain on lockdown in Hubei, and transit restrictions have been imposed by cities and regions around the country. An ‘extension’ of the Lunar New Year holiday is threatening GDP growth, as economists try to size up the knock-on potential impact on the global economy. The virus has now spread across China and another 17 countries/autonomous territories globally, according to BBG.

…click on the above link to read the rest of the article…

Trans Mountain Deal Was Structured to Bleed Billions, Finds Economist

Trans Mountain Deal Was Structured to Bleed Billions, Finds Economist

Robyn Allan dug into the megaproject’s economics and says it’s already losing money

Burnaby Terminal
Aerial view of Kinder Morgan’s Trans Mountain marine terminal, in Burnaby, B.C. Photo by Jonathan Hayward, The Canadian Press.

When Finance Minister Bill Morneau paid $4.5 billion for the 66-year-old Trans Mountain pipeline in 2018, he vowed the deal would bring cash and smiles to taxpayers.

Almost 18 months after the purchase, economist Robyn Allan started looking for evidence of the promised benefits. She didn’t find any.

What she did find should disturb any fiscal conservative, if such a species still exists in Canada.

The existing pipeline is losing money, concluded Allan, the former CEO of the Insurance Corporation of BC and chief economist for BC Central Credit Union.

The proposed expansion to triple the pipeline’s capacity will add to the losses as taxpayers subsidize both construction and the fees companies pay to ship oil.The Tyee is supported by readers like you Join us and grow independent media in Canada

And, Allan noted, Ottawa has no idea how much the expansion will cost.

“Trans Mountain was a profitable pipeline system when Ottawa bought it,” she writes, “but it is not generating earnings now — it is booking losses and has been since the government took over.”

Allan’s independent assessment is worth your attention.

First, you need to know that you own something called the Canada Development Investment Corp. The Crown corporation, with the unlovely acronym CDEV, was established in 1982 and manages federal investments, including in the Hibernia offshore oil field — and now the Trans Mountain pipeline.

Among CDEV’s responsibilities are two Crown corporations created as part of the deal to buy the Trans Mountain pipeline. Canada TMP Finance Ltd. borrows the money and pays the interest. And it actually owns Trans Mountain Corporation, which operates the pipeline. (Yes, it takes two Crown corporations to own one pipeline.)

…click on the above link to read the rest of the article…

Personal Politics, Public Impeachment, Persuasion and Post-Apocalyptic Planning

Personal Politics, Public Impeachment, Persuasion and Post-Apocalyptic Planning

One of my primary concerns regarding the forthcoming economic chaos and societal breakdown is that there will be nowhere to run and nowhere to hide. As normalcy bias evaporates like tears on dehydrated sunken cheeks, hungry neighbors and pre-collapse friends and acquaintances will soon assimilate into zombie hoards and come knocking like its Halloween.

What are you going to do? Shoot them?

Regardless, saying “I told you so” or “I tried to warn you, but you didn’t listen” will not be an effective deterrent. Furthermore, the resultant chaos will also deliver local strongmen and gangs ready to thieve and plunder amidst widespread violence and starvation.

In such a scenario, any lone bananas are sure to be skinned.

Are you ready?

Because very few will have the opportunity to bug out to a remote location and surprisingly, an isolated cabin in the woods, or a fenced-off hidden homestead in a rural area may not be best after all.  Take it from Fernando Ferfal Aguirre, who survived the economic collapse in Argentina.  In his book, “Surviving the Economic Collapse”, he described geographic areas as like organisms dying; where the extremities perish first. Aguirre identifies the urban areas as the safer places to work, trade, and live; with the rural areas as targets for roving gangs to raid and set up camp out of the reach of city services, police, and fire departments.

Therefore, since we know the endgame, what if we could parlay that into building trust with others now?   Perhaps entire regions could be fortified in a balkanized America, simply by reorganizing current civil administrations.  All that would be required would be for the heads of select institutions and agencies to work in coordination, quickly, and decisively as the proverbial excrement collides into the whirling flabellum. Roving bands, gangs, cartels, and feral feds, might then decide to move on to easier targets.

 …click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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