Last Call For Oil's Well That Ends Well, Con't

The Saudis are terrified of the economic slowdown from a global COVID-19 recession, and they are flooding the market to put the Russians and the US out of business in an all out oil price war.

Saudi Arabia slashed its export oil prices over the weekend in what is likely to be the start of a price war aimed at Russia but with potentially devastating repercussions for Russia’s ally Venezuela, Saudi Arabia’s enemy Iran and even American oil companies.

The Saudi decision to cut prices by nearly 10 percent on Saturday was a dramatic move in retaliation for Russia’s refusal on Friday to join the Organization of the Petroleum Exporting Countries in a large production cut as the coronavirus continues to slow the global economy and, with it, demand for oil.
The break in a three-year alliance between the Saudi-led oil cartel and Russia to support prices may be temporary. The moves over the weekend may well have been part of a negotiating chess game, and the Saudis and Russians can still reach a compromise. But if the collapse is lasting, oil executives say there is nothing to stop oil prices from tumbling to the lowest levels in at least five years.

“If a true price war ensues, there will be plenty of pain in the oil markets,” said Badr Jafar, president of Crescent Petroleum, a United Arab Emirates oil company. “Many will be bracing for the economic and geopolitical shocks of a low-price environment.”

A major drop in oil prices would hurt producers around the world, particularly Venezuela and Iran, whose oil-based economies are already under pressure from American sanctions. Export earnings of both countries have already been reduced to a trickle, and a further decline would stretch their abilities to pay for vital services and security.

The one bright spot may be at the gas pump. The average price of a gallon of regular gasoline in the United States, according to the AAA Motor Club, has already fallen five cents in the last week, to $2.40 from $2.45, and prices could easily drop below $2 a gallon in some states in the coming weeks. Lower-income drivers, who typically own older, less fuel-efficient vehicles and spend a higher percentage of their wages on energy, stand to gain the most.

But a prolonged price collapse would add to financial pressure on highly indebted American oil companies, dozens of which have gone out of business in recent years, with a decline in American oil production likely to follow. Oil companies have been laying off workers in Texas and other oil producing states.
Canadian oil sands development, already lagging because of environmental concerns and costs, stands to be hit hard by a price war. And developing countries that depend on oil, like Nigeria, Angola and Brazil, may suffer significant economic slowdowns.

US West Texas Intermediate crude was at $53 a barrel back on February 20 and $63 a barrel at the start of the year.

As of Sunday night, WTI was trading at half that.  $32-$34 a barrel. Brent Sea Crude, the international benchmark, was at $36 a barrel or so.

The oil market has collapsed.

Russia cannot be happy.  Trump cannot be happy.  It's going to be a goddamn insane week on the markets and we're already into correction territory, headed into bear market and the end of the 12-year stock market rally.

It's gonna get nuts.  Fast.  Dow futures are trading limit down right now, over 1,000 points.  10-year tresuries are not only below 15, they are below 0.5%.  It is a *complete meltdown* of the markets.

Monday is going to be a slaughter.

The Blue Wave Rises, Con't

Political scientist Rachel Bitecofer nailed her 2018 midterm predictions by challenging a fundamental theory of voting: it's not who people decide to vote for, it's who decides to vote at all.

What if everything you think you know about politics is wrong? What if there aren’t really American swing voters—or not enough, anyway, to pick the next president? What if it doesn’t matter much who the Democratic nominee is? What if there is no such thing as “the center,” and the party in power can govern however it wants for two years, because the results of that first midterm are going to be bad regardless? What if the Democrats' big 41-seat midterm victory in 2018 didn’t happen because candidates focused on health care and kitchen-table issues, but simply because they were running against the party in the White House? What if the outcome in 2020 is pretty much foreordained, too?
To the political scientist Rachel Bitecofer, all of that is almost certainly true, and that has made her one of the most intriguing new figures in political forecasting this year.

Bitecofer, a 42-year-old professor at Christopher Newport University in the Hampton Roads area of Virginia, was little known in the extremely online, extremely male-dominated world of political forecasting until November 2018. That’s when she nailed almost to the number the nature and size of the Democrats’ win in the House, even as other forecasters went wobbly in the race’s final days. Not only that, but she put out her forecast back in July, and then stuck by it while polling shifted throughout the summer and fall.

And today her model tells her the Democrats are a near lock for the presidency in 2020, and are likely to gain House seats and have a decent shot at retaking the Senate. If she’s right, we are now in a post-economy, post-incumbency, post record-while-in-office era of politics. Her analysis, as Bitecofer puts it with characteristic immodesty, amounts to nothing less than “flipping giant paradigms of electoral theory upside down.”

Her analysis, as Bitecofer puts it with characteristic immodesty, amounts to nothing less than “flipping giant paradigms of electoral theory upside down.”

Bitecofer’s theory, when you boil it down, is that modern American elections are rarely shaped by voters changing their minds, but rather by shifts in who decides to vote in the first place. To her critics, she’s an extreme apostle of the old saw that “turnout explains everything,” taking a long victory lap after getting lucky one time. She sees things slightly differently: That the last few elections show that American politics really has changed, and other experts have been slow to process what it means.

If she’s right, it wouldn’t just blow up the conventional wisdom; it would mean that much of the lucrative cottage industry of political experts—the consultants and pollsters and (ahem) the reporters—is superfluous, an army of bit players with little influence over the outcome. Actually, worse than superfluous: That whole industry of experts is generally wrong.

The classic view is that the pool of American voters is basically fixed: About 55 percent of eligible voters are likely to go to the polls, and the winner is determined by the 15 percent or so of “swing voters” who flit between the parties. So a general election campaign amounts to a long effort to pull those voters in to your side.

Bitecofer has a nickname for this view. She calls it, with disdain, the “Chuck Todd theory of American politics”: “The idea that there is this informed, engaged American population that is watching these political events and watching their elected leaders and assessing their behavior and making a judgment.”

“And it is just not true.”

In other words, Nate Silver dominated the last decade or so of political prognostication because the assumptions his models made of the electorate were the most accurate.  What Bitecofer is proposing is that the electorate itself changes depending on the situation and the models of the electorate must change too.

You know who absolutely believes in Bitecofer's theory that it's all about the people you can get to the polls who want to vote for your side when they would otherwise stay home?  Republicans.  Specifically the Republicans of the last 12 years, the ones that saw Obama activate people who had never voted before, or who hadn't voted in 20 years, and said "We need to do this."

This is why they are so hellbent on voter suppression and putting up barriers to voting.  The old school tells you it's the "Obama-Trump" voters who matter, a tiny slice of the electorate (less than on-half of one percent!) in an era where fewer than 500,000 votes in 3 states decided the entire presidency.

The new school says you'll win if you get the far higher number of people in battleground states who sat out 2016 altogether back into the race.  That's what Bitecofer predicted in 2018 and the Democrats did very, very well.

Still, in red states, Democrats lost Senate seats and the model shows that Republicans will be activated too.  But Bitecofer's model says far more of us will turn out for the Democrats in response.

It's the "vote blue no matter who" theory.  If she's right, we're gonna win.

If she's wrong, it's McGovern, Dukakis, Mondale, Kerry all over again.

Sunday Long Read: Kickstart My Heart

Crowdfunding can be a good thing.  It's gotten products I've bought off the ground.  But when done badly, it's a disaster, and done badly enough, it leads to lawsuits and worse as it's nothing but a giant scam, as the Verge's Ashley Carman recounts the sordid tale of Doug Monahan and his magical backpack.

Lots of people want a word with Doug Monahan — government lawyers, crowdfunding backers, people from his past, and me.

I’d been trying to find him for over a year. As a reporter interested in crowdfunding disasters, I thought Monahan’s failed iBackpack project was one of the ultimate gadget pipe dreams gone bad. The beats were familiar: an idea that raised more than half a million dollars, only to never ship and leave behind thousands of angry backers. The difference in this story, however, is that for only the second time, the Federal Trade Commission is coming for the creator.

The agency claims Monahan took his backpack funds and spent them on “personal expenses,” including bitcoin purchases, ATM withdrawals, and credit card debt. The agency says he threatened backers who pursued him for their bags. The state of Texas is suing him, too. A lot of people want a piece of Monahan, but he’s not going down without a fight. He’s serving as his own lawyer to dispute the claims in court, and he invited me down to Texas to clear his name and reputation.

We meet at a Tex-Mex restaurant chain called Pappasito’s in Houston. It opened at 11AM, when we planned to meet, and by the time Monahan hobbles in a half-hour late, the restaurant is already closing because of tropical storm Imelda’s rain and flooding. The staff lets us stay. Monahan calls the place, which has a similar vibe to Chevys or Chili’s, the “best Tex-Mex restaurant in the world,” even though there are 16 locations in the Houston area alone.

Monahan is frailer and older than I imagined. In the few online photos I’d ever seen, he looks young with brown, spunky hair and wears a sweater layered over a collared shirt with a tie. Professional, a bit conservative. When Monahan shows up to our Tex-Mex meeting, he’s in light brown pants with an elastic waistband. His hair is overgrown, graying, and scraggly. To complement the pants, he wears an Andy Warhol-esque shirt with black-and-white flowers. The petals are blurred, as if being viewed through a kaleidoscope. The shirt has a stronger Austin energy than a Houston one, which makes some sense. Monahan spent years in Austin before moving back to Houston to handle this court case and be near his 92-year-old mother.

I ask why he thinks the FTC is going after him. “I am the poster child for fraud and crowdfunding,” he says sarcastically. “You’re looking at the Jesse James, the John Dillinger.”

He sold iBackpack as a high-tech wonder that would “revolutionize” backpacks and improve people’s lives, whether they’re eight or 80. On Indiegogo in 2015 and again on Kickstarter in 2016, Monahan advertised the backpack as the bag of people’s dreams: it’d feature more than 50 pockets, include multiple external battery packs, RFID-blocking pouches, a precipitation hood, a USB hub, charging cables, a Bluetooth speaker, and a mobile hotspot for a portable Wi-Fi connection. That’s a lot of stuff in one bag that you could seemingly be talked into believing is useful. Yes, it does rain by me sometimes. Occasionally, I do wish I had a Bluetooth speaker in my bag. What IF I had a constant Wi-Fi connection? But the reality is that most of these things could be bought on their own and crammed into any old backpack. Monahan doesn’t see it that way; the iBackpack needed to exist. “The whole backpack is built for power,” he tells me.

Thousands of people bought into Monahan’s project, netting him nearly $800,000 to bring the bag to life. He shipped a few beta units, but the vast majority of people never received anything. They haven’t seen the backpack in person. They don’t believe it’s real, and they started a Facebook group to organize ways to recoup their money and get the FTC’s attention. As far as they’re concerned, Monahan’s a grifter, and the FTC lawsuit was long-awaited and necessary. They track the case in the group, too. “Clearly Doug is a snake in the grass and hopefully the Federal Trade Commission hammers him,” one member of the group wrote.

Meanwhile, Monahan says they just don’t understand him or crowdfunding, in general. He’s not a bad guy, he says. It’s just that businesses fail sometimes, which is what he invited me to Texas to prove. Poking at Monahan’s past, however, suggests this isn’t a man with a one-time flub, but rather someone with a trail of failures. Is he a con-artist? An irresponsible businessman? Does the difference even matter?

Doug Monahan crowdfunded a backpack.  The people who never got their product or their money back crowdfunded a lawsuit against him in return.

I'd say that's fair.

Trump Goes Viral, Con't

Trump voters simply don't believe coronavirus is a problem, so they don't care about it, won't change their behavior, and they certainly won't blame Donald Trump when it spreads.

Americans who now find themselves politically divided over seemingly everything are now forming two very different views of another major issue: the dangers of the new coronavirus.

Democrats are about twice as likely as Republicans to say the coronavirus poses an imminent threat to the United States, according to a Reuters/Ipsos poll conducted this week.

And more Democrats than Republicans say they are taking steps to be prepared, including washing their hands more often or limiting their travel plans.

Poll respondents who described themselves as Republicans and did not see the coronavirus as a threat said it still felt remote because cases had not been detected close to home and their friends and neighbors did not seem to be worried, either.

“I haven’t changed a single thing,” Cindi Hogue, who lives outside Little Rock, Arkansas, told Reuters. “It’s not a reality to me yet. It hasn’t become a threat enough yet in my world.”

Many of the U.S. cases that have been reported so far have been in Washington state and California, more than 1,000 miles away from Arkansas.

COVID-19 is something those filthy blue states and their immigrants have to worry about, not Real Americans In The Heartland™.   Steve M. explains the theory:

Here's what I wrote late last month:

Most Americans never travel. Trumpism is popular among the untraveled; they're suspicious of people who gad about the planet rather than settling into a small town or gated retirement village. They'll regard this as a disease of rootless cosmopolitanism -- or, rather, as a disease rootless cosmopolitans have spread to simple, decent, travel-averse Volk.  

And if they never get real numbers from the federal government, they'll learn to mistrust the numbers from state and local governments, from "the fake news," and from private organizations. If they don't have real numbers from the one source they trust -- Trump and his government -- they'll experience a combination of denial and (if the virus shows up where they live) scapegoat-blaming.

Trump might not be able to avoid coronavirus accountability forever -- but with some lucky breaks and careful misdirection, he might avoid it until November, the way Bush avoided accountability on Iraq in November 2004. Avoiding accountability is all that matters to Trump.

The rush to blame Democrats, specifically immigrants and those people for COVID-19 is going to be the name of the game. Trump voters believe it's a Chinese bioweapon that Beijing lost control of.

Conspiracy theories infect us faster than the virus itself, it seems. This time, the basic idea behind all of them is that the origins of COVID-19 in Wuhan, home to the Wuhan Institute of Virology, is suspicious. From there, some claim that it escaped the lab accidentally after being used in a regular, if risky, experiment, or a bioweapons program. Others suggest it was released intentionally, though it gets convoluted when you try to determine who, exactly, was being attacked: As the podcast Knowledge Fight has documented, Alex Jones has said that COVID-19 is both a false-flag style attack by the Chinese government against its own people and a “ChiCom” (that is, Chinese communist) plot to attack the West, a conspiracy repeated by Rush Limbaugh.

Responsible outlets have covered the conspiracy theories, attempting to debunk them. But even some experts don’t seem immune here. One rejected the idea of the virus being a biological weapon and praised the Wuhan Institute of Virology as a “world-class research institution that does world-class research” to the Washington Post at the end of January. Less than a month later, he was tweeting sympathetically about a New York Post opinion piece claiming the SARS-CoV-2 virus, the virus that causes COVID-19, had escaped from the same lab. 

So no, Trump voters will never blame Trump for COVID-19 even as the illness ravages both red and blue states.  They will be mobilized to vote against those people who "brought the virus into America".

If you think racism and anti-immigrant fervor was bad before, it will absolutely get much, much worse.

Meanwhile in Italy, the government there is quarantining the entire Lombardy region of 16 million.

Italy's prime minister has said at least 16 million people are in mandatory quarantine in Lombardy region and also in 14 provinces.

The lock-down will last until early April.

The dramatic escalation in the country's efforts to contain the new coronavirus will close gyms, pools, museums and ski resorts.

Italy is Europe's worst-hit country and reported a steep rise in virus infections on Saturday.

The new measures, which also apply to financial centre Milan and tourist hotspot Venice will last until 3 April.

The death toll in Italy has passed 230, with officials reporting more than 50 deaths in 24 hours. The number of confirmed cases jumped by more than 1,200 to 5,883 on Saturday.

Imagine all of the mid-Atlantic and New England locked down from Philly to Maine, a quarter of the US population, and you have an idea of what Italy is going through.  Here in the states, the White House refuses to quarantine anyone, or even recommend safety procedures of any sort.

The White House overruled health officials who wanted to recommend that elderly and physically fragile Americans be advised not to fly on commercial airlines because of the new coronavirus, a federal official told The Associated Press.

The Centers for Disease Control and Prevention submitted the plan this week as a way of trying to control the virus, but White House officials ordered the air travel recommendation be removed, said the official who had direct knowledge of the plan. Trump administration officials have since suggested certain people should consider not traveling, but they have stopped short of the stronger guidance sought by the CDC.

The person who spoke to the AP on condition of anonymity did not have authorization to talk about the matter. The person did not have direct knowledge about why the decision to kill the language was made.

On Friday, the CDC quietly updated its website to tell older adults and people with severe medical conditions such as heart, lung or kidney disease to “stay home as much as possible” and avoid crowds. It urges those people to “take actions to reduce your risk of exposure,” but it doesn’t specifically address flying.

Vice President Mike Pence, speaking Saturday after meeting with cruise ship industry leaders in Florida, targeted his travel advice to a narrower group: older people with serious health problems.

“If you’re a senior citizen with a serious underlying health condition, this would be a good time to practice common sense and to avoid activities including traveling on a cruise line,” Pence said, adding they were looking to cruise line officials for action, guidance and flexibility with those passengers.

Health and Human Services Secretary Alex Azar suggested older Americans and those with health problems should avoid crowds “especially in poorly ventilated spaces.”

What does the White House want to do?

Give tax cuts to airlines and cruise lines.

We've known for years that a pandemic scenario of a flu-like disease with a higher contagion and mortality rate was always likely.  It was just a matter of when. 

"When" is now.