Why the heck is there still an automotive chip shortage?

As with most things in this convoluted industry, it's complicated. But the situation should start to improve later this year.

Craig Cole

Feb. 4 2022

Aside from the raw, human toll, COVID-19 has dramatically changed how we live, from travel and education to the way people work. This pandemic has also had an outsized -- and unfortunate -- impact on the automotive industry, snarling global supply chains and limiting vehicle production. But perhaps nothing has hamstrung car companies more than the ongoing semiconductor shortage, which is still a major issue two years after coronavirus went global.

For several important reasons, "The chip shortage is still very much a problem," said Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions.

 "This is not a quickly solvable issue," he added.

Automakers large and small are still being affected by an acute lack of semiconductors, which are absolutely necessary, even in the most basic cars and trucks. Everything from advanced driver-assistance features to infotainment systems to heated steering wheels are powered by some sort of computer chip, and that's only going to accelerate in future.

Chipmakers' manufacturing capacity has been gobbled up, effectively blocking automakers from getting the semiconductors they need.

Taiwan Semiconductor Manufacturing Co.

Toyota continues to face shortages that will affect manufacturing. "Our teams are working diligently to minimize the impact on production … in North America we are projecting a reduction of approximately 25,000 to 30,000 vehicles in February," the automaker told Roadshow. The good news is, Toyota does not anticipate these shortfalls will impact employment.

GM has similar challenges. Late last year, the company confirmed it wasn't able to offer certain features on a range of models due to a lack of chips, though things are getting better. "Fortunately, at the moment we do not have any North American assembly plants that are on downtime due to the global shortage of semiconductors," a spokesperson for the Detroit-based automaker told Roadshow. Second shifts have just resumed at its assembly plants in Fairfax, Kansas, home of the Chevy Malibu and Cadillac XT4, and Ramos Arizpe, Mexico, where the Chevy Blazer and Equinox SUVs are built.

Ford missed out on an estimated 1.25 million sales last year. Volkswagen fell short of planned production by 1.15 million, GM and Toyota missed out on 1.1 million and Stellantis came up short by about 1 million units.

Global ramifications

Overall vehicle production was dramatically reduced in 2021 because of the chip shortage. According to Jeff Schuster, president of the Americas operation and global vehicle forecasting at LMC Automotive,"Ford was hit the hardest and they were hit early." This is because it had several super-high-profile launches, including a redesigned F-150. According to Schuster, the Blue Oval missed out on an estimated 1.25 million units last year.

But Ford wasn't the only automaker to stumble. Volkswagen fell short of planned production by around 1.15 million vehicles, GM and Toyota were both out about 1.1 million and Stellantis came up short by around 1 million units. But not all companies were affected equally. "As a group, I would say the Japanese and Korean OEMs were a little more insulated," noted Schuster. They're closer to China, where many chips are made. This is why Chinese manufacturers felt less impact than their global competition.

According to a study released by the US Department of Commerce, the median inventory of computer chips held by consumers -- like automakers and medical device manufacturers -- fell from 40 days in 2019 to less than 5 in 2021. The implications of this are dire. "If a COVID outbreak, a natural disaster or political instability disrupts a foreign semiconductor facility for even just a few weeks, it has the potential to shut down a manufacturing facility in the US, putting American workers and their families at risk," the report noted, a danger that isn't lost on car companies.

Continental

How could this happen?

The auto sector employs some of the brightest and most prescient people of any industry. They're used to planning things out years in advance and sweating every detail to meet safety and fuel economy standards as well as customer needs. This is what makes the industry's collective semiconductor misstep such a surprise. Schuster said he doesn't think anyone thought this would mushroom into the problem it became, though car companies should have been aware of the potential risks.

"Chips go into virtually everything we buy anymore," Fiorani said. At the beginning of the pandemic, automakers cut their semiconductor orders, anticipating a big downturn in sales. "OEMs stepped out of line and the manufacturers that make chips reallocated that factory space to much more profitable, much more in-demand chips for iPhones and PlayStations and other things," he added. Now that auto sales are red-hot again, chipmakers can't meet demand because their capacity has been spoken for. Unfortunately, it's not as simple as turning the lights back on and ramping production up again.

Profitability is another issue Fiorani pointed out. The automotive industry requires older chips, ones that make semiconductor manufacturers less money. It takes only a fraction of the processing power to run a few parking sensors than it does an iPhone 13 Pro. Additionally, for safety, car companies use proven designs, reliable chips that function for decades in all temperatures, humidity levels and other conditions. Whether it's Nvidia, Texas Instruments, TSMC or any other manufacturer, chipmakers have been incentivized to produce more advanced semiconductors at the expense of their automotive customers.

LMC Automotive projects it will likely take all of 2022 and maybe a portion of 2023 for things to start getting back to normal.

Solutions to a microchip-sized problem

Still, there are a couple options to ensure a reliable supply of automotive-grade chips in the coming years. Foreign companies can increase capacity, or we could make more of them here in the US. Schuster said both strategies are likely key to solving this issue because global chip demand is only going to increase, and not just from the automotive sector. Gaming, smartphones and the burgeoning internet of things are going to consume more and more semiconductors in the coming years.

Making chips domestically is important, but it is not a silver-bullet solution. Fiorani explained, "The biggest problem is, one of these plants can't just pop up overnight." He said it takes months, if not years, to construct a new facility, which has to be located in a place with certain resources. Converting an existing building into a chip factory is not really an option because they're so specialized. And then there's the cost. "The number I've been told is $10 billion," and that's just to get started, he said. This is a hugely capital-intensive business, another hurdle.


Powerful but beautiful.

Taiwan Semiconductor Manufacturing Co.

One additional option, though, is forming some sort of automotive industry chip consortium. Fiorani said this might be the best way to prevent future supply bottlenecks, though he admitted getting cutthroat car companies to work together on something this big is likely a major challenge.

The prognosis: Cautious optimism

If there's any good news in all this, vehicle demand remains strong and companies are able to sell whatever cars and trucks they can build. Schuster said the chip shortage should ease this year, though LMC Automotive projects it will likely take all of 2022 and maybe a portion of '23 for things to start getting back to normal, whatever normal is in a COVID-19 world. Likewise, Fiorani said he estimates everything will start coming together in the second half of the year, when -- fingers crossed -- vehicle production could return to preshortage levels.

"There is some investment in this field and government and industry are stepping up to increase the output of automotive-grade chips," Fiorani said. "We're just hoping it's enough to offset the losses." Obviously, plenty is still up in the air right now, but hopefully the worst of the auto industry's semiconductor shortage is in the rearview mirror.

Ford announces public-private partnership for its Michigan Central campus
By Clyde Hughes

The Ford logo is displayed on the new Focus C-Max at the 2011 North American International Auto Show at the Cobo Center in Detroit, January 11, 2011. Ford on Friday announced a public-private partnership for its Michigan Central Station campus in Detroit. 

File Photo by Mark Cowan/UPI | License Photo

Feb. 4 (UPI) -- Ford Motor Co. said Friday it will sign a public-private partnership with the state of Michigan and the city of Detroit at a 30-acre "innovation district" campus centered on the redeveloped historic Michigan Central Station.

Google won a six-year contract last year to work with Ford and provide the project cloud-computing services. The tech giant, in turn, will become a founding member of the district and also offer computer science classes at Michigan Central for local high school students.

The state will provide $126 million to support the campus and innovation district at Michigan Central. Some of the funds will go to reconstruct some streets and develop new housing.

Ford began redeveloping Michigan Central Station in 2018 and is scheduled to finish the project in 2023. The $950 million project is expected to bring 5,000 workers to the district, including 2,500 Ford employees and 2,500 from other businesses and entrepreneurs.

"By embracing a whole-of-government approach in our collaboration with Michigan Central and the city of Detroit, we are writing the playbook for a new kind of partnership that keeps Michigan at the forefront of mobility for generations to come," Michigan Gov. Gretchen Whitmer said, according to WXYZ-TV.

"Together, we can continue growing Michigan's economy, putting Michiganders first, and win the next century of auto-manufacturing and technology development."

Ruth Porat, Google's senior vice president and chief financial officer, said on Friday its Michigan partnership will allow more people to have access to its products.

"In order for the United States to build the next great technologies, people need access to the latest data and digital tools," Porat said on the company's blog.

"That's why we are bringing Google Cloud technology, including our Cloud infrastructure, artificial intelligence and machine learning capabilities and data and analytics tools, to Michigan Central to be used on projects and research for future mobility solutions."

Hundreds of children killed by toppling TVs, furniture since 2000

By HealthDay News

Between 2018 and 2020, an average of 22,500 Americans a year required emergency department treatment for tip-over injuries, and nearly 44% were under 18, according to the U.S. Consumer Product Safety Commission (CPSC). 

Photo by mojzagrebinfo/Pixabay

Before your eyes become glued to the Super Bowl or the Winter Olympics, make sure your TV and furniture are anchored to the wall to protect little ones from potentially deadly tip-overs.

Between 2018 and 2020, an average of 22,500 Americans a year required emergency department treatment for tip-over injuries, and nearly 44% were under 18, according to the U.S. Consumer Product Safety Commission (CPSC).

Since 2000, there have been nearly 600 tip-over deaths involving furniture, TVs or appliances, and 81% of those victims were children 17 and younger.

"People either don't know about the risks, or they think it can't happen when an adult is nearby," said CPSC Chair Alex Hoehn-Saric.

RELATED Study: Thousands of kids hurt each year in accidents with furniture, TVs

According to the new CPSC report, 71% of all child deaths involved a TV, 62% of deaths in all age groups involved a TV, 55% of deaths involved people being crushed and 66% of deaths resulted from head injuries.

In 2015, CPSC launched a campaign called AnchorIt! to educate Americans about the dangers of tip-overs. Between 2011 and 2020, there was a 55% decrease in tip-over injuries treated in U.S. emergency rooms, largely due to fewer TV tip-overs.

"We're pleased to see the decrease in tip-over injuries over time," Hoehn-Saric said in a commission news release.

HELMET LAWS APPLY ONLY TO CHILDREN

RELATED

Bike-linked head injuries plummet for kids, but not adults

Protection is inexpensive and easy to install, he said.

"Most anti-tip-over kits cost less than $20 and can be installed in fewer than 20 minutes," Hoehn-Saric said. "We urge parents and caregivers to protect their children and families and make the time to secure heavy items in their homes."

The CPSC offers these suggestions:
Anchor TVs and furniture such as bookcases and dressers securely to the wall.
TVs should be on a sturdy, low base and placed back as far as possible, particularly if they can't be anchored.
Don't display or store items such as toys and remotes where kids may be tempted to climb to reach for them.
Store heavier items on lower shelves or in lower drawers.
When you buy a new TV, consider recycling your old one.
If you move the older TV to another room, be sure it is anchored to the wall properly.
Keep TV and cable cords out of children's reach.
Even when TVs and furniture are anchored, children should still be supervised by an adult.

More information

Safe Kids Worldwide has more about preventing tip-over tragedies.

Copyright © 2021 HealthDay. All rights reserved.

Macron’s government seeks to reshape Islam in France

A PLURALIST HUMANIST SECULAR ISLAM
By BARBARA SURK

1 of 8

Imams from the Paris Mosque gather before paying their homage to the victims of the Nov. 13, 2015 attacks, near the Bataclan concert hall in Paris, Friday, Nov.12, 2021. The French government on Saturday, Feb. 5, 2022, forged ahead with efforts to reshape Islam in France and rid it of extremism, introducing a new body made up of clergy and laymen — and women — to help lead the largest Muslim community in western Europe. 

(AP Photo/Adrienne Surprenant, File)

NICE, France (AP) — The French government on Saturday introduced a new body to reshape Islam in France, part of President Emmanuel Macron’s efforts to rid it of extremism.

The Forum of Islam in France leadership will be made up of clergy and lay people to help guide the largest Muslim community in western Europe. All of its members will be hand-picked by the government and women will make up at least a quarter of them.

With France bloodied by past Islamic extremist attacks and having hundreds of citizens who went to fight with jihadists in Syria in past years, few disagree that radicalization is a danger. But critics also see the efforts as a political ploy to lure right-wing voters to Macron’s centrist party ahead of France’s April 10 presidential election.

Supporters say it will keep the country — and its 5 million Muslims — safe and ensure that Muslim practices in France adhere to the country’s cherished value of secularism in public life.

Yet critics, including many Muslims who consider the religion a part of their French identity, say the government’s latest initiative is another step in institutionalized discrimination that holds the whole community responsible for violent attacks of a few and serves as another barrier in their public lives.

It replaces the French Council of Muslim Faith, a group set up in 2003 by former President Nicolas Sarkozy, then interior minister. The Council served as an interlocutor between the government and religious leaders.

“We must turn the page,” Interior Minister Gerald Darmanin said at the forum’s inaugural meeting Saturday at The Economic, Social and Environmental Council in Paris. “We are restarting relations between the state and the faith ... (based on) a new form of dialogue that will be more open, more inclusive and more representative of Islam’s diversity in France.”

Islam is the second religion in France, with no single leader and multiple strains represented, from moderate to Salafist with a rigorous interpretation of the religion to outright radical upstarts.

Macron’s project includes measures like training imams in France instead of bringing them in from Turkey, Morocco or Algeria — a plan many in the Muslim community approve of. It also breaks the centralized leadership of clerics

“A single representative of the Muslim faith, who is a master of all trades, no longer exists,” Darmanin said. Women and men “who draw their legitimacy from their work and expertise in a field” will engage in the dialogue with the state, he explained.

Muslims are divided over the project. Some believers visiting the Grand Mosque of Paris for Friday prayers cautiously welcomed the idea, while others worry it’s going too far in trying to control their faith, or say that the government has singled out Islamic institutions but would not dare suggest such changes to Christian ones.

Hamoud ben Bouzid, a 51-year-old Parisian, was optimistic about Macron’s plan and his effort to include different voices from the Muslim community to show to the wider society its diversity. Members of the clergy “don’t speak for every Muslim citizen” of France, he said.

“We live in a secular country, so why not expand the forum and give voice to many more Muslims in France?” ben Bouzid said. “I would like Muslims to be heard as citizens in this country, not as Muslims. As full citizens.”

Muslims in France have long complained of discrimination in daily life, from being singled out by police for ID checks to discrimination in job searches. Whenever extremist violence hits, by foreign-born attackers or by French-born youth, France’s own Muslims come under suspicion and pressure to denounce violence.

Last year the French parliament approved a law to strengthen oversight of mosques, schools and sports clubs. The government says it was needed to safeguard France from radical Islamists and to promote respect for secularism and women’s rights. The law has been used to shut down multiple mosques and community groups.

___

Nicolas Garriga in Paris contributed.

Judge awards millions to lawyers in Flint water settlement

FILE - This Jan. 13, 2021 file photo shows the Flint Water Plant tower in Flint, Mich. (AP Photo/Paul Sancya, 

Ed White, The Associated Press
Published Friday, February 4, 2022 2:30PM EST

DETROIT (AP) - A judge awarded about $40 million Friday to the lead attorneys in a $626 million settlement for Flint residents and property owners whose water was contaminated with lead, but millions in additional legal fees will also be carved out as claimants get paid.

The decision is one of the last major rulings in a landmark deal to settle lawsuits against Flint and the state of Michigan over the failure to properly treat corrosive water from the Flint River before it flowed through pipes in 2014-15, releasing lead along the way.

Lawyers “achieved an extraordinary settlement in a case that has been intensely litigated for nearly six years,” U.S. District Judge Judith Levy said. “The fees awarded reflect their hard and persistent work.”

Legal fees and at least $7.1 million in expenses will come from the $626 million pool. Michigan is paying $600 million, while Flint, an engineering firm and McLaren Health are covering the rest of the settlement.

“Every dollar awarded to the attorneys is a dollar less for the claimants,” Levy said. “Because of this, the court must balance society's strong interest in paying lawyers for their work and encouraging counsel to accept similar engagements in the future with the important interest in maximizing the claimants' monetary awards.”

Flint residents are likely to net more than $400 million when fees are subtracted.

The settlement covers Flint children who were exposed to the water, adults who can show an injury, certain business owners and anyone who paid water bills. About 80% of the deal is earmarked for kids.

There is no safe level of lead. It can harm a child's brain development and cause attention and behavior problems.

In addition to the $39.6 million awarded to the lead attorneys, Levy set a detailed schedule of what lawyers can receive when claims are paid. There is a cap of 25% in some categories.

“It was fair, it was just, it was thoughtful,” said Michael Pitt, an attorney in the long-running litigation.

John O'Connor, a San Francisco lawyer who has testified as a fee expert in more than 200 cases, said Levy's decision was fair.

“It's a very complicated formula,” he said. “This is a healthy fee award, there's no doubt about it. But the court seemed impressed with the diligence of counsel. ... These guys were taking on a big action. It took a lot of work.”

Lawsuits are pending against the U.S. Environmental Protection Agency, McLaren and engineering firms.

Why is Ukraine’s wheat so important?

Louise Callaghan, Ukraine
Sunday February 06 2022, 

The Sunday Times

Ukraine, known as the breadbasket of Europe, is responsible for 10 per cent of the world’s wheat exports

DMYTRO SMOLIENKO/ UKRINFORM/BARCROFT MEDIA VIA GETTY IMAGES

His lined face squinting into the wind, Sergey Plaksia trudged through the snow towards the barn where he keeps his golden wheat stocks through the winter.

For the past 30 years, he has farmed the endless fields stretching across this part of Ukraine, expanding his smallholding of 250 acres into more than 6,000 acres managed by 110 employees and producing 2,000 tonnes of wheat a year. Now he is beginning to fear that a Russian invasion — or threat of one — could devastate his life’s work.

VIDEO

Putin’s security men: the elite group who ‘fuel his anxieties’

Russia’s growing isolation has strengthened the ‘siloviki’ who surround the president

Vladimir Putin with FSB head Alexander Bortnikov (right)

 and other officials on Security Services Day in Moscow in 2015. 

Photograph: Aleksey Druginyn/Sputnikvosti pool//EPA

Andrew Roth Moscow correspondent
Fri 4 Feb 2022 

When Viktor Yanukovych sought to flee Ukraine as he was removed from the presidency in 2014, Vladimir Putin urgently summoned the heads of his military, security, and spy agencies for an all-night meeting on how to extract him. As they broke up at seven in the morning, he recalled, he told them: “We must start working on returning Crimea to Russia.”

In Putin’s telling, he was alone with his top security officials when he made one of the most fateful decisions of his political career.

Since then, Russia’s growing isolation has only strengthened the so-called siloviki, the Russian security men who have surrounded him, many of whom served in the KGB and have maintained conservative, often conspiratorial political views.

We do not know exactly how Putin makes his most important political decisions. Tatyana Stanovaya, the founder of political analysts R.Politik, recently divided the Russian elite into two groups: technocrats who dominate government but “have no remit to interfere in security matters” and the siloviki who “dominate the agenda, fuel Putin’s anxieties and provoke and escalate tension”.

As Russia gathers troops and appears ready to launch an attack in Ukraine, these security advisers may have an outsize effect on what happens next.

Nikolai Patrushev

Nikolai Patrushev, head of Russia’s security council. 

Photograph: Pavel Orlovsky/BelTA/Tass

The head of Russia’s security council and a “hawk’s hawk”, Patrushev plays the informal role of Putin’s national security adviser. A career intelligence officer, Patrushev has known Putin since the 1970s, when the two men worked together in the Leningrad KGB. He later succeeded Putin as head of the FSB and has chaired the security council since 2008. His interviews have revealed him as a conspiracy theorist who believes that western powers are seeking to destroy Russia. The United States “would much rather that Russia did not exist at all. As a country,” he said in a 2015 interview.

His rhetoric on Ukraine, which he calls a “protectorate” of the west, has resembled that of Putin. “At any moment, there’s potential in Ukraine for an outburst of tensions so strong that millions of Ukrainians will flee to seek refuge in other places,” he said in a recent interview that predicted a possible conflict.

Patrushev has also been accused of approving assassinations and other illegal operations. A UK public inquiry in 2016 found that “the FSB operation to kill [Alexander] Litvinenko was probably approved by Mr Patrushev”. And diplomatic sources have told the Guardian that the Russian operatives accused of trying to overthrow the government of Montenegro in 2016 were allowed to leave the country on Patrushev’s plane. He also chairs the Russian volleyball federation.

Sergei Naryshkin

Sergei Naryshkin, head of Russia’s foreign intelligence service. 

Photograph: Sergei Savostyanov/Tass

The head of Russia’s foreign intelligence service, Naryshkin is reportedly a former KGB officer and has known Putin since at least the 1990s, when the two worked at the St Petersburg mayor’s office. Naryshkin is a Putin loyalist who followed the Russian leader into the Kremlin, serving as his deputy head of economic development from 2004, then as the head of Dmitry Medvedev’s presidential administration from 2008, and then the chairman of the State Duma parliament from 2011-2016. He is an effective functionary and polished speaker who has occasionally been suggested as a potential successor to Putin.

Naryshkin is also a hardliner who engages in conspiracy theories. In an interview earlier this year, he said that the poisoning of Kremlin critic Alexei Navalny was a western plot to support the Russian opposition by finding a “sacrificial victim”. Earlier this year, he compared the government of Ukraine to “Hitler’s occupation”. He also has an edge: asked if he had ever been betrayed, he told an interviewer that “one thing soothes me: these traitors have either already burned in the fires of hell or will certainly do so”.

He heads the Russian Historical Society, which has played an aggressive role in promoting favourable interpretations of Russia’s history, a pet project of Putin’s.

Alexander Bortnikov

Alexander Bortnikov, head of the FSB. 

Photograph: Anadolu Agency/Getty Images

The head of Russia’s FSB, the domestic security and intelligence service, Bortnikov plays a key role in maintaining Putin’s control of the country. The sprawling security apparatus employs hundreds of thousands of people and is responsible for everything from counter-terrorism to border security, counterintelligence, electronic surveillance and, unofficially, terrorising the political opposition. Bortnikov has also known Putin since the 1970s, when both served in the Leningrad KGB. He is seen as having less influence on Putin than Patrushev or Naryshkin.

Bortnikov and Patrushev’s sons have become powerful Russian officials. Dmitry Patrushev is Russia’s minister for agriculture and Denis Bortnikov is the deputy president and chairman of the state-run VTB Bank’s management board. US lawmakers have included both on draft lists for sanctions because of their fathers’ proximity to Putin.

Sergei Shoigu

Sergei Shoigu, Russia’s defence minister. 

Photograph: Sergei Guneyev/Tass

Shoigu did not serve in the KGB or the military and his role as minister of defence makes him as much a technocrat as a silovik. But his oversight of the modernised Russian military, including the aggressive GRU military intelligence agency, means that he is often involved in key security decisions or at least in their implementation. It was Shoigu’s order that ended the sudden buildup of troops in March-April that first set alarm bells in Europe ringing about the potential for a new Russian invasion of Ukraine. And he has appeared in Belarus this week to oversee war games that could serve as a cover to prepare for an attack.

Shoigu is from Tuva, a Buddhist republic in Siberia that borders Mongolia. Putin and Shoigu regularly take short hunting and fishing vacations in Siberia, which give Shoigu direct, unimpeded access to the Russian president. Evgeny Minchenko, a political analyst who puts together a power ranking of Russian officials, said earlier this year: “Right now, there’s only one member from the cabinet who is in the ‘politburo 2.0’. And that’s Shoigu.”

Ukrainian Tensions and Oil – Is Russia Really the Bad Guy?

While everyone is criticizing Russia, it’s easy to follow the US ‘savior’ narrative. However, what if we looked at what’s happening with oil in mind?



By:Sébastien Bischeri
Published: Feb 4, 2022,

Disclaimer to today’s article: I’m providing this analysis from a pure energy-focused perspective. I do not claim it represents THE right view, but rather one of those that won’t be as visible in the mainstream. It is interesting to add different views as pieces of the same puzzle. I am looking forward to reading yours in the comments!

Several port facilities in Germany, the Netherlands and Belgium have been the target of cyberattacks, prompting the judicial authorities to investigate the suspicions of extortion of funds at the expense of German operators in the oil sector. Indeed, it would appear that this series of computer hackings that began several days ago primarily concerns oil terminals. This is disrupting deliveries in several major European ports against a backdrop of soaring energy prices.

After jumping the day before, thanks to the strengthening of the euro against the US dollar induced by ECB President Lagarde, oil prices continued to rise during the European session on Friday. Consequently, the fall in the greenback came on top of the recovery in demand, the fall in US crude inventories and the disruptions in supply to boost the price of black gold on the climb, the two crude benchmarks evolving above the psychological mark of 90 dollars a barrel, galvanized by solid demand and tensions on the offer coming from (geo-)political risks.

Who is Provoking Who?

The situation is rather complex on the geopolitical scene, with the US claiming that Russia is planning an invasion in Ukraine, whereas the US under NATO cover sent additional troops to Eastern Europe. The question that may arise here is: who is provoking who? So far, we haven’t seen Russia placing troops in Mexico, on the border with the United States. On the other hand, the Biden administration may encounter difficulties in accepting that the Kremlin can agree to various partnerships with its European neighbors, especially regarding more favorable energy supplies. Instead, it’s in the US interest to weaken those diplomatic relations, potentially leading to additional partnerships that may arise between the EU and Putin.

And as we see the US-led narrative getting through the Western mainstream media with more aggressive, suspicious, and tense tones towards Russia, this obviously has the effect of pouring some oil on the Russian-Ukrainian fire. Furthermore, the US needs reasons to demonstrate that NATO is still alive and relevant while a number of countries are now questioning their own participation in the US-led military organisation created in 1949, even going so far as to show some doubts regarding its current motivations.


Isolating the Russian Bear

By maintaining a hostile tone towards Russia’s intentions, the US is consequently trying to isolate the Russian bear and push their European partners to blindly follow the “official narrative” (as the EU being part of NATO), which could possibly lead to new sanctions on Russia, the latter being able to retaliate by using its energy assets and capacities to deprive the EU of the Russian supplies, which currently on the gas side represent between 30% and 40% of total gas imports for Europe. Then, as a result, the Americans could start exporting more gas into Europe via Liquefied Natural Gas (LNG) shipping – which again could benefit their energy-led commercial balance – the Europeans thus becoming the losing players in this game.

As an example, we saw this week that a tanker loaded with LNG from the US will arrive at the LNG terminal in Świnoujście (Poland) at the end of this month, since Poland has LNG import capabilities which could be used to deliver US gas to Ukraine. Apparently, this is the second time (after the first one took place two years ago) that such gas deliveries are made by PGNiG, the Polish state-controlled oil and gas company, in cooperation with ERU (their strategic trading partner on the Ukrainian market).

Actually, Ukraine suspended imports of Russian gas at the end of 2015. After relying on Russian gas imports for decades, they currently increasingly depend on imports from Europe. Since Ukraine has no LNG import capabilities, such US gas deliveries have been organized via a pipeline from the Polish terminal (through re-gasified LNG).



WTI Crude Oil (CLH22) Futures (March contract, daily chart)



Brent Crude Oil (BRJH22) Futures (April contract, daily chart)



RBOB Gasoline (RBH22) Futures (March contract, daily chart)



Henry Hub Natural Gas (NGG22) Futures (February contract, daily chart)

In summary, geopolitics is always complex because it relies on individual economic and strategic interests of countries. The readings also depend on different views, and since there is always a lot of noise, it often helps to take some steps back in order to analyze the global situation from a different angle.

Have a nice weekend! And remember to chime in on the conversation.

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Thank you.

Sebastien Bischeri
Oil & Gas Trading Strategist

* * * * *

The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data’s accuracy and thoroughness.

The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits’ employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

How will the U.S. respond if Russia invades Ukraine? Implications for gold, oil and stocks

 

Kitco News  Saturday February 05, 2022

Russia has amassed over 100,000 troops near Ukraine. In response, the U.S. is bolstering its presence in the region, with the Pentagon deploying about 3,000 troops to Eastern Europe in the coming days; 1,000 of which will be moving from Germany to Romania while 2,000 will be heading to Germany and Poland from the U.S.

Michelle Makori, editor-in-chief of Kitco News, discussed the likelihood of a Russian invasion of Ukraine and the implications for the markets, as well as the most likely U.S. response with Harold Kempfer, CEO of Global Risk Intelligence & Planning and former Lieutenant Colonel of the U.S. Marine Corps, and Robert Ryan, Chief Strategist of the Commodity & Energy Strategy service at BCA Research.

Kempfer, who has done multiple tours of duty in the Middle East, said that Russia does possess the manpower to launch an invasion into Ukraine, but logistical challenges remain.

“Russia could go in. They certainly have enough troops, they have enough armor, air, certainly all the supporting arms they need in terms of missiles, artillery, so they definitely can launch an invasion. One of the things that I’ve been looking at is, do they have forward-deployed fuel,” Kempfer said. “That’s the one thing that has not been reported…their fuel supplies. With that said, recent satellite photos show they’ve been pushing a lot of new materials up towards those base camps that they have along the border. So, it looks like they’re getting ready.”

Kempfer noted that direct military action from the U.S. against Russia inside Ukraine is unlikely, but that Ukraine is already receiving intelligence and assistance in strategic planning form the U.S. and its allies.

“What we would respond with is probably pushing a lot of arms and other things to the Ukraine…I don’t see a scenario where any of the NATO partners would put military forces into the Ukraine. With that said, we have military trainers in Ukraine currently. One of the things that’s kind of missed with this is that it’s not just the forces, it’s the other things that we bring to Ukraine. We can provide them with intelligence, surveillance, reconnaissance, we can provide them with a degree of situational awareness and understanding that they wouldn’t have. The other thing is, and I don’t know if we’re doing it, I’m assuming we’re doing, is we’re probably helping them develop the defensive plan for Ukraine. I would imagine that somewhere, there’s at least one joint planning group, if not multiple joint planning groups looking at maps, looking at the latest satellite photos…and coming up with an extensive plan with counter-mechanized kill zones,” he said.

Moscow would hence be facing Ukrainian forces that are trained and briefed by U.S. military forces, with U.S.-backed Ukrainian defenses likely to “cause attrition of Russian forces,” Kempfer said.

The likely action against Russia from the West would be sanctions, Kempfer said, adding that Russian President Vladimir Putin is likely just looking for concessions at this point in time.

“I think [Putin] is going to try and get as many concessions as he can and might start trading territory for concessions. But, if he crosses that line, which is going into Ukrainian territory, there’s going to be some big sanctions,” he said.

Sanctions would cause Russian oil production to slow down, Ryan said.

“Recently, we had to downgrade our estimate of what Russia would be contributing to in the OPEC restoration of supply because it doesn’t look like they’re able to meet their quotas every month. They’re pretty much flatlined at 18 million barrels a day now. If they are subjected to another round of sanctions, again on technology and capital, they more than likely will find it increasingly difficult to restore production and grow it, which is their long-term goal,” Ryan said.

A direct attack on a NATO member is what’s needed for the U.S. to act, militarily, against Russia.

“That would require a Russian strike either on NATO territory, on a NATO country,” Kempfer said.

However, military escalations between Russia and NATO forces could happen in the Black Sea, in the worst-case scenario, Kempfer said.

“We’re looking at something down there in the maritime domain where we could possibly see navies possibly getting into some sort of confrontation,” he said. “So, I think Turkey may actually play a big role. And if there's a Turkish naval confrontation with Russian forces, somewhere in the Black Sea, I don't know where that would go.”

Aside from a direct attack against Turkey, or any other NATO member, it is highly unlikely the U.S. and its allies would intervene through direct military action against Russian forces.

“I don’t see that any of the NATO partners would want to do that either, particularly Germany,” Kempfer said.

Germany is greatly dependent on Russia for natural gas, as well as key minerals.

“There’s a tremendous amount of nickel that Russia exports. One of the reasons that Germany is so dependent on Russian natural gas is because they got rid of the coal-fired plants and after Fukushima they said, for political reasons, we’re going to get rid of the nuclear plants,” Kempfer said. “They want to go to renewables. Renewables imply that you need a lot of batteries. Batteries require things like lithium and nickel, cobalt and other things like that. Russia has a corner on the nickel market, particularly in Europe. I think it’s about 80% or something, they provide nickel to Europe. That’s huge.”

Ryan added that a direct military confrontation in the open field with the U.S. military and its NATO allies is a scenario that the Kremlin wants to avoid at all costs.

However, in the event that tensions do escalate between the U.S. and Russia, the conflict would mostly be in the cyber space, Ryan said.

“The U.S. and NATO are formidable as a military force, so if it did come down to that, I think it would be over very quickly. You would get a big spike in oil prices and then it would come down exactly as happened in the 1990 Iraq War. The caveat there is that we’re living in an age of cyber warfare, so it would not be at all surprising if Russian subs start clipping all the cables leading into Europe so the internet shuts down. You have some big cyber attack that takes down the electric grid. NATO and the U.S. would have to respond,” he said.

Markets would see immediate response should Russia indeed invade Ukraine, with crude oil taking the lead in movement, Ryan noted.

“I think when you have 100,000 troops on the border, primed..and if you see the [supply] fuel start moving in, the market will take notice. Just the pure response to that provocative kind of action probably will take crude up above $100,” he said.

The current supply situation is “extremely tight” for oil, Ryan said, and it wouldn’t take much to move the price at this point.

“If we get even the slightest disturbance in the force, as it were, you see these markets spring higher,” Ryan said. “A big part of that is the very low inventories globally, very high demand globally, and very constrained supply, globally. Something that looks like they’re rolling the tanks more than likely would just make the markets jump.”

Ryan said that in the event of escalation, safe haven assets would rally.

“I think gold would catch a bid, there would be a scramble to get it. At some point, depending on how bad things get, you’d see dollar strength limiting the rally. We’d go through $2,000 [on gold] but I don’t know how far past $2,000,” he said.

For more information on market reactions to escalating tensions in Eastern Europe, watch the video above.

Follow Michelle Makori on Twitter: @MichelleMakori (https://twitter.com/MichelleMakori)

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By Kitco News

WHO calls for stronger China collaboration on COVID-19 origins

By Staff  Reuters

Posted February 5, 2022

The head of the World Health Organization said on Saturday he had discussed with Chinese Premier Li Keqiang the need for stronger collaboration on the origins of COVID-19, a subject of controversy that has strained Beijing’s relations with the West.

Tedros Adhanom Ghebreyesus has previously pressed China to be more forthcoming with data and information related to the origin of the virus.

READ MORE: ‘Shouldn’t be happening’: WHO tracking ‘worrying’ increase in deaths as Omicron surges

“Pleased to meet with Premier Li Keqiang,” Tedros tweeted. “We discussed COVID-19 and the need for an aggressive effort on VaccinEquity this year to vaccinate 70% of all populations,” he said, referring to the WHO campaign for fair access to vaccines around the world.

“We also discussed the need for stronger collaboration on COVID-19 virus origins, rooted in science and evidence,” he added.

The WHO last year established the Scientific Advisory Group on the Origins of Novel Pathogens (SAGO) and called on China to supply raw data to help any new investigation. China declined, citing patient privacy rules.

China has consistently denied allegations that the virus was leaked from a specialist laboratory in the city of Wuhan, where COVID-19 was first identified at the end of 2019.

A joint study by China and the WHO published last year all but ruled out the theory that COVID-19 originated in a laboratory, saying that the most likely hypothesis was that it infected humans naturally, probably via the wildlife trade.

Last November, China said a declassified U.S. intelligence report saying it was plausible that the pandemic originated in a laboratory was unscientific and had no credibility.

(Writing by Paul Carrel; editing by Clelia Oziel)

Criticism of The Betrayal of Anne Frank puts spotlight on Rosemary Sullivan

WORLD
06/02/2022
ByNation World News Desk




Rosemary Sullivan is an award-winning Canadian author renowned for her meticulously researched non-fiction, including Villa Air-Bel: World War II, Escape and a House in Marseille and her last book, Stalin’s Daughter: The Extraordinary and Tumultuous Life of Svetlana Alliluyeva,
Rosemary Sullivan.Handout

Her latest book is The Betrayal of Anne Frank: A Cold Case Investigation. Published just a few weeks ago, it has already received more attention than anything else she has written.

The book documents an investigation into who tipped off the Nazis to the whereabouts of Anne Frank and seven other Jews in hiding in Amsterdam during the Second World War. Their annex, hidden behind a swinging bookcase, was raided on Aug. 4, 1944. Anne was 15 when she died the following year in Bergen-Belsen concentration camp. Only her father, Otto Frank, survived the war.

Revealed in the book, the investigation’s conclusion – that the informant was likely a Jewish man named Arnold van den Bergh – has been roundly criticized by some experts.

The book’s Dutch publisher, Ambo Anthos, has apologized in an internal e-mail for offending anyone, saying a more critical stand could have been taken, and has delayed printing more copies until further notice, according to reports.

Sullivan did not respond to requests for an interview this week. But when asked in an interview before the book’s release how she felt about being part of this story, she told The Globe and Mail, “I’m nervous. I didn’t do the research. I trust the research. If it had been a private book, would I have said I’m not going to say it was Van den Bergh? I don’t know. But I’m anxious, I’m anxious.”

The years-long investigation was conceived by Dutch filmmaker Thijs Bayens and journalist Pieter van Twisk. It was led by retired FBI special agent Vince Pankoke, who approached the mystery like a criminal cold case. There was a core team of more than 20 experts and dozens of other researchers and consultants. Sullivan was commissioned to write the book about the investigation, to be published by HarperCollins in Canada and the US

We still don’t know who betrayed Anne Frank

https://www.theglobeandmail.com/arts/books/article-new-book-documents-five-year-investigation-into-who-betrayed-anne/

“When they approached me, I thought this is in the cards,” Sullivan said in the interview two days before the book’s Jan. 18 publication. “And who doesn’t feel a deep attachment to Anne Frank?”

An advance from the publisher financed Bayens’s project, along with a grant from the City of Amsterdam and some private donations.

The team began work in 2016 with 30 scenarios and narrowed it down to 12 suspects, then four. The investigators ultimately determined that the likely informant was Van den Bergh, a successful notary before the Second World War. During the war he was a member of the Jewish Council in Amsterdam, a controversial body created by the Nazis.

Van den Bergh had actually been named as the person who tipped off the Gestapo about the Franks’ hiding place in an anonymous note sent in 1945 to Otto Frank, after he returned to Amsterdam from Auschwitz.

Pankoke posited that the informant would have had that information, the opportunity and the motive.

The team concluded that Van den Bergh, who died in 1950, had the information (they argued he was in possession of lists of addresses where Jews were hiding); the opportunity (he had access to high-level Nazis); and the motive (a married father of three daughters, he wanted to keep his family safe).

In the January interview, Sullivan told The Globe the team was 95-per-cent certain of its conclusion.

But doubts have been raised, including about the hypothesis that the Jewish Council would have had lists of addresses where people were hiding, something the book says is “almost certain.” Sullivan explained that the lists may have been used to ensure food got to people in hiding.

Another criticism involves the anonymous note: Who’s to say it wasn’t sent by someone who had reason to implicate Van den Bergh, perhaps to remove suspicion from themselves? The cold case team did consider that, according to the book. “But why send the note to Otto?” it asks.

The group points out that Frank himself took the note seriously enough to make a copy of it and give it to an investigator. And it was sent before the publication of Anne’s diary, so the writer of the note could not have been trying to somehow capitalize on Anne’s fame – or have been concerned about it.

The process behind this book was unusual for Sullivan, who is used to doing her own digging rather than writing about research done by others to which she has had access.

When asked by The Globe how she navigated this unfamiliar situation, she said “it was very hard.” She noted that she had access to all the research files, which were stored in a digital system called the Bookcase. “So by the time they got from the 30 scenarios down to 12 suspects, I could go to the Bookcase and read everything they had,” she said in the January interview.

“I always had the Bookcase with the summaries of these different individuals and their biographies and so on to go on,” Sullivan said. “So while [the investigators] were doing the research, I was doing the summaries.”

Sullivan, who said she was “not getting paid very much” for the book, sat in on a few team meetings in Amsterdam but was not part of the investigation insofar as offering suggestions or ideas. When the pandemic prevented her from returning to the Netherlands, the back-and-forth continued via Zoom and e-mail. “It would be me asking questions and Vince responding,” she said. “Or I would send them something and they would say, ‘You’ve got this wrong,’ and I’d correct it. It was that kind of dialogue.”

Ahead of the book’s publication, Sullivan said she was nervous about how people might react to the conclusion. “Mostly that it be used by anti-Semites,” she said.

In response to a request for an interview, HarperCollins Canada e-mailed a statement. “At this time, HarperCollins and international affiliates will not be commenting on another Publisher’s decision.”

An e-mail to Ambo Anthos Publishers on Wednesday did not receive a response.