Trump’s Texas Tests

In a year that included an election where everyone lost money in the office pool (and Clinton lost far more); a protest that actually accomplished something; and a scandal that rocked not only the DNC, but the collective American political system, there was bound to be some residual damage. Some are happy with the results of the election while others are still threatening to use their passports to escape an evil president-elect who makes them cry. Truth is, there are more than a few red flags on the horizon reminding us that just because it happened in 2016 doesn’t mean it won’t follow us into 2017. You can be sure Trump will be put to the test.

Up first, big oil – also known as the black snake in Sioux territory; fossil fuels in the Rockefeller circles in New York and paychecks in many homes across the country.

capture-20161213-065202

The Drama

This time last year, those who held a stake in the Energy Transfer family watched closely as several events unfolded. At the end of September, the company’s owner, Kelcy Warren, announced a merger between Energy Transfer Equity and Williams Companies ($WMB) that would be worth more than $37 billion. There were many questions, including a few about Warren’s ethics – from both personal and business perspectives. Initially, his efforts in acquiring Williams were unwelcomed. The first offer made to Williams was for more than $53 billion. Two months later, it was worth around $37 billion. Williams accepted the offer, recognizing any kind of recovery in the sector would be slow; it opted to cut its losses.

As 2016 kicked off, there were cracks in Warren’s golden egg. There was little doubt the deal was going south and eventually, a judge allowed Warren to rescind the offer based on some tax loophole. Even as this was unfolding, Warren was taking steps to cover his assets. In a SEC filing, he disclosed the “completion of issuance of convertible units” which would allow a few investors to “receive the Preferred Distribution Amount”. It was legal, even if it was underhanded. By the time this bad deal was put to rest, Energy Transfer’s CFO Jamie Welch had left the company and filed his own lawsuits against his former employer.

#NoDAPL

This summer, setbacks continued. This time, it was the Dakota Access Pipeline protests. Standing Rock Sioux Tribe says the pipeline is too close to its primary sources of drinking water. The Tribe is ~10,000 strong and located mostly in the Dakotas. What’s awe-inspiring is the way they’ve carried out the months-long protests. They’ve drawn thousands of supporters and have a GoFundMe campaign that’s collected more than one million dollars, making it one of the most successful in GoFundMe’s history.

The protesters have been peaceful. Law enforcement, on the other hand, used high-pressured water cannons and “concussion grenades”, against protesters. These crowd control efforts led to many injuries, many serious enough to require medical attention. There’s been at least one injury to the arm of a protester who still may lose it and another protester may lose her eyesight. Dogs from different law enforcement agencies have also attacked protesters.

The Army Corp of Engineers issued a ruling earlier this month that effectively halted the progress of the pipeline. It should be noted the pipeline is nearly complete – less than 1 mile remains unfinished. It’s costing millions every month the protests continue and the project remains unfinished.

Warren has become the villain of the natural gas and oil industry. When the ruling came down earlier this month, he immediately declared it“politically motivated” and that drilling would continue with no reroute to bypass the area that’s being contested. The company lost another battle this past week when a judge refused to allow the drilling to continue and instead said the court would hear arguments at the end of January.

Here’s where it gets interesting. If the pipeline’s not finished by January 1, 2017, the companies involved can opt to renegotiate the contract or they can simply walk away. That’s the likely scenario. The initial contract was signed when oil was closer to $100 a barrel versus the $45 per barrel it is today. There was a justifiable use for the new pipeline three years ago, but these days, the oil fields aren’t at capacity, again, courtesy of the collapse in the energy sector. Whether anyone wants to admit it, there’s really no reason for adding to the intricate freeway of underground gas and oil pipes that crisscross through this continent. Major investments are being made in cleaner energy sources and that is not going to change.

From The Institute for Energy Economics and Financial Analysis report:

Because the economic prospects for Bakken oil producers have dimmed dramatically since early 2014, oil shippers…may attempt to renegotiate terms when ETP misses its Jan. 1 deadline, seeking concessions on contracted volumes, prices, or contract duration. Moreover, if oil prices remain low, as projected, Bakken oil production will continue to decline, and existing pipeline and refinery capacity in the Bakken will be more than adequate to handle the region’s oil production. If production continues to fall, DAPL could well become a stranded asset—one that was rushed to completion largely to protect favorable contract terms negotiated in 2014.

Texas Taxes

As if all of that weren’t enough, Energy Transfer is now in the crosshairs of the tax man. Texas, like every other state, offers incentives for companies. One controversial program has been manipulated in such a way that allowed Warren’s companies to claim more than $250 million in tax breaks. In a five-year period between 2011 and current day, there have been at least 15 deals uncovered that link to the Texas Economic Development Act, which is touted as the state’s largest corporate welfare program. This story broke a few days ago and has the potential to snowball.

The Trouble with Trump

So how does the new president fit into all of this? Trump has consistently come out on the side of ETP. He’s vowed to undo the Army’s project halt as well as anything Obama tries to do in his final days in office. By the time Trump takes office in late January, it may be too late since the contracts expire January 1. Trump received campaign donations and up until a few weeks ago, he had investments the ETE family.

Two things happened as I was writing this and there are bound to be huge uproars:

Trump is expected to announce he’s chosen Rex Tillerson, CEO of Exxon, as Secretary of State this morning. The question is: will Exxon be allowed to run with the $500 billion deal with Russia it worked out before the sanctions hit? He’s not the only Texan who will be named part of the Trump team later today. There’s a lot of debate when it comes to Putin’s own motives, but we need Russia as an ally. We must find a way to rebuild those important, though fragile relationships with the countries Obama spent 8 years tearing down.

Trump is also expected to formally announce he’s tapped his one-time political foe and former Texas Governor Rick Perry to oversee the Energy Department. Perry was given a lucrative position on the Energy Transfer Partners board in February 2015. The Houston Chronicle offered, “Life outside the governor’s mansion has proven profitable for Rick Perry”. You may recall this was around the time Perry was facing felony charges in Texas, but that didn’t serve as any kind of speed bump for Warren. When Perry announced he was running for president a few months later, it was Warren who greased the financial wheels. And now, Perry will likely be named as the head of the Energy Department in the Trump Administration.

RIP, Gas and Oil Industry

It’s been a brutal year for the energy sector, specifically those who make their money in the gas and oil industries. With a couple of weeks left in this year, it could get much worse. In fact, it likely will.

The Paris Climate Agreement will no doubt be one of the most earth-shattering events, if not the most earth-shattering event, in our lifetime. No pun intended. It’s not for the reasons most think though. It’s about so much more than a hashtag and world governments tweeting how they’ve saved the earth. In fact, it has very little to do with those grand gestures, much as they are, but rather, it comes down to what’s going on already, the timing and the folks most affected by the agreement.  In fact, for most of us, it won’t mean much of a difference at all. Seriously, I can’t think of a single way that the climate (in the context it’s used today) affects everyday life. Besides, even if I could, there are many who’d argue my way of thinking was wrong. That’s what it is for most of us. Few even bother because everyone is just so sure of what they believe. You can’t change the mind of one who insists the earth is warming no more than you can change the mind of someone who thinks it’s ridiculous silliness. Count me among the latter.

But…ask someone whose bank account is affected. Now that’s an interesting debate!

Just to get an idea of what lies ahead, here are some of the quotes from the past hour or so since the agreement was announced:

Bill McKibben, Co-founder 350.org:

“Every government seems now to recognize that the fossil fuel era must end and soon…Since pace is the crucial question now, activists must redouble our efforts to weaken that industry.”

May Boeve, Executive Director 350.org:

“This marks the end of the era of fossil fuels. There is no way to meet the targets laid out in this agreement without keeping coal, oil and gas in the ground. The text should send a clear signal to fossil fuel investors: divest now.

//platform.twitter.com/widgets.js

//platform.twitter.com/widgets.js

Believe me when I say it – there’s not a single oil executive who’s not ready to come unglued.

//platform.twitter.com/widgets.js
I’ve said all year that the fourth quarter was going to be brutal. It doesn’t take a rocket scientist to know that much. Even if the oil industry wasn’t limping along, there was one dynamic that many denied, but was as obvious as a pimple on a 16 year old homecoming queen’s nose: Obama was hellbent on ensuring climate change comes full circle while he’s still in office. And why not? He’s annihilated everything else he’s touched. It makes sense that he’d bet his Nobel Peace Prize on forcing climate change. He’s even taking complete credit for it:

Today, the American people can be proud — because this historic agreement is a tribute to American leadership.

You can read his statement in its entirety here.

So where does that leave gas and oil? Well, considering the losses in recent weeks, especially after the recent OPEC meeting, things are looking as dark as the oil out of the ground. But let’s start with the MLPs. Specifically, let’s start with the MLP that is no longer an MLP. Kinder Morgan was the master limited partnership darling. Up until hours before the giant announced it was cutting its dividends by a whopping 75%, there were folks still singing its praises, certain the moon would fall from the sky before the dividends would be cut. Y’all watch out for that falling moon.

It’s now obvious that the MLPs are indeed exposed to the same threats as any other company in the sector. The threats just appear differently. It’s because everything is so intertwined. But a -42% YTD? That’s worrisome.

capture-20151213-020746

Then, we had the humongous and inexplicable 2 million units of Energy Transfer Equity, valued at more than $34 million, that was bought by the four head honchoes this week. The company’s CEO, Kelcy Warren, bought the vast majority – $32 million. It helped nothing. We’re talking double digit losses in a single day:

capture-20151213-020611

This article from Brian over at Valuentum Securities hits on Friday. There are more than a few unhappy folks. Someone’s lying. If nothing else, download the 10Q and run your own math. If you have money in ETE, you have an obligation to know what’s going on with it.

capture-20151213-025349

Also last week, we learned there’s a good chance (so we’ve been told) that despite what was said weeks ago – export bans were in place for the long haul – there’s now a possibility that those bans might be lifted. Wonderful news, right? Except for the fact that the Paris Climate Deal pretty much makes it moot.

Well, at least we still have big oil, right? Maybe not. They’re all cutting their 2016 budgets – layoffs and CAPEX. The cuts are big. Chevron especially is taking a hard hit.

Think shale’s the answer? Nah. Not even close. We’re not the only ones fracking. It’s still expensive, despite the advances and while all of this drilling’s been done, with plenty of oil waiting to be pulled from Mother Earth, the race is on to see what happens first: the companies go bankrupt (several have already filed) or the need for the oil materializes. We have a huge glut with barges filling up by the hour.

It’s doubtful the Saudis planned it this way, but the reality is if companies begin fracking again, and considering they’ve found faster ways of accomplishing it, it’s going to run the supply right back up, which starts the cycle again: too much supply, not enough demand.

And finally – let’s not forget the politics. Obama now has to return to the good ol’ United States of America and face the politicians who rely on the oil and gas industries to pad their pockets with dirty money.

Let’s be clear: it’s a slow dance and we are most certainly not leading it.

//platform.twitter.com/widgets.js

The Oil Export Ban

capture-20150915-134910It’s always fascinating to see how things unfold in this country in terms of politics and money and most recently, oil. For decades, there has been a ban on oil exports. When profits begin tanking, we start hearing the big oil players complain about the unfairness of it all. That complaining has finally resulted in Congress opting to lift the four-decades old ban.  On the surface, that’s reasonable; but going a bit deeper, is the cure worse than the ailment?

What Got Us Here?

First, it’s important to know a few of the “minor” details (according to those supporting the lift) that got us to this point. Keep in mind it’s the long term repercussions that are going to haunt us. This is increasingly clear with these latest moves:

Note: I realize a lot of this is not on the evening news. God love the mainstream media – it has its hands full letting us know how many times Donald Trump sneezes over the course of a day. Power on, MSM, power on! (Yes, it’s ridiculous.)

China’s Imports

China is one of the world’s biggest oil importers. Sixty percent of the oil it uses is imported from other countries. This is important because:

In October, China will launch its own oil benchmark using its own currency. China and Russia are both ditching the dollar. It will compete with London’s Brent and our West Texas Intermediate (WTI) benchmarks. It has its challenges, according to Reuters, “If China’s crude futures don’t immediately attract enough liquidity and markets are still as volatile as now, then traders could get really burned and would quickly stop trading Chinese crude futures.” If China was in as bad shape as everyone insists, why would it risk the new ploy? Just as the U.S. has manipulated our stock market for years, so has China manipulated its own. Things are never as they truly seem on some Dow ticker.

OPEC Scores

Last week, I wrote that there was no way OPEC was going to change its tactic on production because it had come too far to back out now (despite those insisting it had no choice but to ease its production). We learned that today not only has it NOT considered cutting production, but it’s getting ready to double down. In its monthly report, it said, “In North America, there are signs that U.S. production has started to respond to reduced investment and activity. Indeed, all eyes are on how quickly U.S. production falls.” Score one for OPEC. This move has annihilated what’s left of the still-expensive U.S. shale industry.

The Export Ban

Those are two very big reasons why many of the oil companies want the export ban lifted. But what happens if this goes through and the ban is lifted?

First, if the Fed finally makes a move and raises interest, it makes the exports moot. The U.S. will not be able to compete with the other countries because it will increase the value of the U.S. dollar. It will also send oil prices tanking yet again – which by now, the damage is so heavy, the exports aren’t going to do much to improve the situation anyway and will likely result in more job losses.

And by the way – how many countries, in this current environment, are going to turn to the U.S. anyway? The Obama presidency has pissed the world off over the past seven years. Iran has wasted no time buttering up other countries to buy its oil when the inevitable lifts of the sanctions occur. And as for us, we’ve spent the past few weeks sweet-talking Greece (yes, Greece) into not allowing Russia in its airspace to deliver equipment to Syria. It’s insane: Russia was Greece’s only “BFF” during the difficult months it faced earlier this year. Do you really think this tiny country is going to say, “Yeah, Obama. No problem” after the love affair it developed with Russia recently? No. The answer is no.

There’s one caveat: there exists a small possibility that even a small rate hike can result in global financial unrest, making oil the least of the world’s problems. The reality is no matter what the Fed does, there are going to be financial repercussions both here at home and around the world.

One recent study released in July by Consumers and Refiners United for Domestic Energy, or CRUDE, finds that the cure of the export is going to be worse than the disease: “Allowing the export of crude would cause domestic gasoline, jet fuel, diesel, and heating oil prices to increase, in addition to other negative impacts like increasing the United States’ trade imbalance.” It also reads, “American consumers and businesses will take a major hit if Congress lifts export restrictions.” You can read the entirety of the report here.

And yes, there are many who say this is simply not true. You may know them: BP, Chevron, Exxon, etc. They care little about what happens to the smaller oil companies, which are opposed to the end of the ban. These smaller American oil companies rely on this ban for their success. This would result in layoffs in an entirely new area of the energy sector that had been somewhat protected over the past year.

Finally, and this is important. We keep seeing the unemployment rate dropping, even though most of us are looking around and wondering who’s finagling the numbers? There’s no way the job market is improving and in fact, it’s deeply troubled, even if the government won’t admit it. Maybe there’s a reason why:

Instead of “laying off” employees, many companies and most certainly within the oil industry, are instead issuing “furloughs”. This results in the same thing as layoffs: it eases the payrolls of struggling companies without it affecting their employment numbers. In other words, they’ve found a way to lay off without cutting the number of employees, which makes Obama happy: he’s vehemently opposed to the entire oil industry anyway, but it’s a win-win for him: he gets to tout the lower unemployment numbers while also keeping up his not-so-secretive dislike of the oil industry. This is going to come back and bite some in the most uncomfortable way possible.

In the end, this export ban being lifted may result in absolutely nothing changing. You don’t make big changes like this in the middle of a crisis, just as you don’t make decisions based on fear. If gas prices indeed begin to climb because of this ban being lifted, you can be sure the consumer “unknown factor” will most certainly reveal itself at the polls next year.

Conglomerates, MLPs, Chevron – Reality Check

oildownRemember back in the 70s and early 80s, everything was all about the conglomerates? Companies gobbled up smaller companies, with everyone – except those in the larger companies who knew better – believing all was safe and good in Corporate America. Only problem was, the smaller companies were not only gobbled, but spit out, part by part until there was nothing left but a sad memory, a warm beer and some country music song to send it out. Eventually, this seemingly “strengthening” effort of the larger companies became their downfall. By picking and choosing through the process of piecing different parts, these conglomerates themselves became weakened and were quickly deemed relics of days gone by. This corporate strategy was all fine and good for a little while, but it simply wasn’t financially feasible. It was a failure, but it took more than a decade for it to come full circle. Sometimes, bigger is not better.

Now, though, we have the master limited partnerships. These trusts are designed with more than a few benefits in mind, most importantly, their tax advantages. Few things in the American economy are taxed just once. Take estate planning, for instance, people with considerable wealth set up trusts for their assets so that those who receive their inheritances don’t have to worry about estate taxes eating up what their loved ones worked their lives to provide. MLPs work in a similar way. They’re designed to bypass some of the taxes, at least temporarily. It gets complicated because of the absence of the familiar 1099s in lieu of the sometimes complicated S K-1 forms.

At any rate, MLPs are found in the energy sector – oil companies, upstream, midstream and downstream companies, etc. and are traded on the securities markets. They contain several different entities from seemingly unlikely acquisitions, such as retail stores. They’re supposed to be the cure-all, except oil and gas is struggling…as in struuuugggggling.

The big players, of course – Chevron, Exxon and the like are holding on by a thread. The question is: why? These companies have been through it all. Nothing’s working. Their earnings – are they even still an option at this point? Cash flow? That’s a joke. And despite talk of the future, with big promises, it’s simply too far out. Not only that, but the money to secure this future is borrowed. Just like the conglomerates of yesteryear, these companies are just too bulky, are laying off left and right and frankly, are threatening the entire sector. The reality is this sector is fragile. There are too many things unfolding that ensure it doesn’t regain quickly and depending on the damage Obama can do in his final days in office, it could be permanent. The one thing anyone who relies on this industry wants to see is the big daddies sitting pretty. They’re not.

Without going too much into the outside factors, including Iran, Russia and China and other dynamics – most of which I’ve written about extensively in the past, it’s time to shoot the ailing dog. The days of $100 per barrel are gone. Even with a comeback, those who are underestimating Obama’s goals are fools. There’s a reason he’s been quiet the past few weeks and if you’re wondering what he’s been up to, look no further than here and here – you probably haven’t seen either of these stories in the 5 o’clock news, what with the Trump/Kelly war and of course, the U.S./Cuba new best friend status. Don’t underestimate him; the fact that the Iran sanctions are now moot is proof that he does hold power, God help us all. I’ve said for more than a year that shale’s too expensive and with the state of the entire sector, those who insist on pushing it might as well line their horizontal drills with their dollars.

While we’ve yet to see the “too big to fail” banks really pay their dues for the havoc they wreaked in 2008 and earlier, the energy sector, even with the protective mama bear MLPs, won’t enjoy the same fate, but will likely go down in a flaming ball of good intentions, just as the conglomerates did years ago. There is no Reagan or Bush White House. And, if you’re keeping up: Rick Perry, despite Kelcy Warren’s millions, is sinking fast.

Did Obama Admin Just Sell Out the Military?

No one doubts the seriousness of the Iran nuclear deal; the problem is, few believe the U.S. has found a way to lead the rest of the world in accomplishing it. No one, with the exception of Secretary of the State John Kerry, Defense Secretary Ash Carter and the rest of the Obama Administration, believes the solution presented is the solution that prevails.

Last week, we saw an interesting – and uncomfortable – debate unfold when Kerry, Ernest Moniz, the energy secretary, and Jack Lew, the treasury secretary appeared before the Senate. If you didn’t see it, you should – it’s fascinating to watch these folks go nine rounds, all the while knowing it serves no purpose in the long run. We heard Kerry’s vehement disgust over the 47 senators who wrote to Iran’s leaders before the nuclear deal was signed. He insisted that act could have jeopardized world security (and in all fairness, that stunt by the Republicans, whose pockets are lined by the big oil companies, was done for very selfish reasons. Read about it here.) We also heard Senator Bob Corker (R TN), Senator Jim Risch (R ID) use words like “bamboozled” and “fleeced”: as in “You were bamboozled with this deal and now you’ve fleeced the American people”. Oh, and a delightful scolding from Barbara Boxer towards both Corker and Risch for using the words “bamboozled” and “fleeced”.

But let’s not forget this little well-hidden nugget:

Kerry claimed the U.S. has “the capacity’ to ‘knock out ISIL’ on its own, but we’re not going to get suckered into that.”

Yes. He really said that. And then skipped to the next topic.

Meanwhile, Defense Secretary Ash Carter was sent to the Middle East to soothe those frantic fears many of our allies (and even our enemies) have these days. Here’s what’s so disturbing, though: the way the media reported these visits and the quotes it used vary significantly. They’re subtle, but take a look –

Carter is trying to respond to regional concerns about Iran by proposing intensified military cooperation with its longtime allies. With the Saudis, there will be talk of training special forces, cyber security, anti-missile defence and other issues. July 23, 2015 (Read the article here)

and

In an effort to calm these worries, Carter proposes to intensify military cooperation with Washington’s traditional allies in the Middle East. July 22, 2015 (Read the article here)

and

Carter told reporters en route to Tel Aviv.But the point of the nuclear deal is to get the result of no Iranian nuclear weapon without carrying out a military strike.” July 19, 2015 (Read the article here)

The first quote comes from a Pakistani media site, Dunya. The second is Al Arabiya, a Middle Eastern media site. The third quote is from The Washington Post.

It’s amazing how small tweaks in a sentence can change the meaning in its entirety. Any other time, it would matter none and would seem petty, but Google the first two quotes. Not a single American media site comes up; no CNN, MSNBC, USAToday, Fox News. Not one.  The third quote, when Googled, returns The Washington Post and a number of other American based media. Depending on who Carter is speaking with, the U.S. is either wheeling and dealing with propositions to increase our military and other efforts as sort of a reminder to Iran or the U.S. is moving mountains to ensure no military action.

Kerry was quick to remind his adversaries on Capitol Hill that everyone supported this deal. Ash Carter spent the week reassuring the media of the same thing. Only problem is, he was the only one commenting after these meetings.

capture-20150726-114854

VOA

nytimes

NY Times

capture-20150727-061006

Times of Israel

capture-20150727-061216

If there is any question at all about the possibility of sincerity from Iran, this should clear it all up:

capture-20150727-072647

 

Finally, this is off topic, but I come across it while I was researching this post. It’s going to be a huge problem as things begin heating up with the Cuba brouhaha. With embargoes lifted, there’s a new focus and those in the oil industry are definitely paying attention. Back in the 60s, part of the embargo with Cuba included sanctions for any country that sold to Cuba anything made with more than 10% of American supplies/materials. Now, though, allbets are off. Cuba is gearing up to begin drilling in the Gulf of Mexico in what many are saying includes a wealth of oil. Actually, there are four areas that Cuba is focusing on. America could, for all intents and purposes, furnish the wells that will drill the oil. In case you’ve not been following the massacre in the energy sector, oil closed below $48 a barrel on Friday.  Another country entering into the oil market? Not good.

Last year, the Obama Administration insisted that wouldn’t be a possibility, at least not in the short term. Now, though, Cuba is planning on being up and running by the end of 2015 or the first of 2016. If the U.S. bails and refuses to play a role, Cuba could create a massive environmental mess right off the coast of Florida. That was always the fear anyway when it bought materials and supplies from other countries. The U.S. has, by far, some of the safest extraction methods (though far from perfect) in the world. This is not, and never has been, a real priority for Cuba.

Greece: Superpowers (and Others) Observing from a Distance

As the Greek “no-win game plan” plays out on the world stage, many are wondering why both the United States and Russia are, for the most part, watching quietly from the sidelines. The argument could be made (and has) that Greece is miniscule in both size and its ability to wreak havoc on a global level. That’s terribly shortsighted and frankly, when has the U.S. ever stood by and simply watched from a distance? For that matter, when has Russia?

With so many events playing out simultaneously, attention gets focused and refocused. It’s easy to feel as though nothing is ever resolved as we constantly turn our attention to the latest breaking news.

The question is: who will really benefit, no matter the outcome? Who knows – but there are a few facts that could be playing a big role in how these decisions are made.

Russia

We know that Russia is looking for better solutions now that the U.S. has tried to sanction it off the map. You’d think Putin would be working magic to take advantage of the weakness Greece now is showing – and you’d be right.

capture-20150712-174851

Greece and Russia have teamed up for the latest pipeline project going through Turkey. Honestly, I couldn’t figure out why Greece didn’t simply bail on the negotiations and leave the Eurozone for Russia’s open arms. Putin’s already said he’s willing to write a check, and let’s face it, Greece gets no respect from its European partners. Proof of that is found in the almost-sad way it’s being treated in these negotiations.

Prime Minister Alexis Tsipras’ is now facing a reality that includes his own people feeling as though he sold them out. Even his wife threatened to leave him if he caved. Less than one week later – he caved.

Why would he risk losing everything for a deal that serves no good purpose for his country? The truth is, Germany, France and the others have a lot at stake, too, yet they’re playing hardball on a deal that is pretty much a list of “granted wishes” by Greece. So why is Tsipras being treated like a red-headed stepchild when he’s caved to all of their demands? Maybe this will help:

Greece has the power to veto any Russian sanctions the EU wishes to dole out.

Maybe Tsipras loses more than his country’s faith and his marriage if he doesn’t try to remain where he is, even if it does mean a worse deal in the short term.

Germany

Angela Merkel has her hands full. She and her country’s leaders want Greece ejected. But why? They say Greece is lazy and untrustworthy, but is that really enough for Germany to take such a tough stance?  Russia and Germany have always had a love/hate relationship. Just last month, Germany accused Russia of stockpiling nukes near Russia’s borders. The fact that any one partner can veto anything the EU proposes is probably a bit uncomfortable for Germany, especially considering this slow dance with Russia and knowing Greece and Russia are partners in oil.

Former (as of last week) Greek Finance Minister, Yanis Varoufakis, wrote on Friday:

Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.

It’s walking a fine line laid out by Putin, but it also knows that a partner with the power to veto sanctions against Russia is not something any of the countries wish to tackle.

Makes sense. France has the same veto power as Greece. And speaking of France:

France

This is a country with leaders who’ve been busy. President Hollande took the position of bucking Germany and Angela Merkel in order to take Greece’s side. French leaders have spent a significant amount of time in the past 24 hours “oohing and ahhhing” over the latest proposal set forth by Tsipras and encouraging other countries – and most certainly Germany – to follow. France as a cheerleader – who’d have thought?

Adding to this: France is pressuring the United States to close a deal with Iran. French Foreign Minister, Laurent Fabius, said just today, “Now that everything is on the table, the moment has come to decide.”

I don’t reckon that serenade with James Taylor earlier this year had the effect Kerry was hoping for.

Maybe France is still angry at the U.S. for forcing it to cancel its contract with Russia regarding its Mistral program this past November. It was a big contract for France, but it did not bode well with us and a few other countries.

Russia, surprisingly enough, negotiated with the country and ended up with a deal that simply allowed for a refund to Russia. That’s generous, considering the massive contractual dynamics that France annihilated and the realization that Russia could have made things extraordinarily hard for France. But maybe there were a few promises made that could place Russia in a strategic position in the very near future, especially if Grexit comes full circle.

Iran

Iran doesn’t have a dog in the hunt with Greece/Europe battle, but it does play a role in the very near future, especially if Greece leaves EU.

Iran is vehement in its efforts of convincing those involved in the nuclear talks to lift the UN arms embargo and end the long-standing ban against the missile program. In fact, those are likely the two biggest challenges at this point. Naturally, Russia is in agreement with Iran, which further complicates matters, especially considering the two countries have enjoyed a mutually beneficial nuke program for many years. And let’s not forget, Obama is fine and dandy with Russia holding Iran’s nuke materials as part of the deal. That’s like handing me a freezer full of shrimp and telling me not to cook it. That shrimp is going to get cooked!

But there’s another reason Russia and Iran are acting more like BFFs. In BRICS countries (Brazil, Russia, India, China and South Africa), U.S. sanctions play no role at all. This could mean that Iran, if the new agreement falls through (or even if they don’t), can still bypass any sanctions and keep its product in the market. Iran has already stated on more than a few occasions over the past few years that it wants to join BRICS. While Greece couldn’t become a full member at this time, it can benefit from the many advantages BRICS provides.

“Iran supports the BRICS group and is prepared for membership and presence in BRICS’ fund.”

– Iran’s Deputy Economy Minister Behrouz Alishiri

And then there’s this little gem from two years ago: BRICS leaders released a statement after one of its summits:

“We are concerned about threats of military action as well as unilateral sanctions, and hope that all outstanding issues relating to Iran’s nuclear programme will be resolved through discussions and diplomatic means. We believe there is no alternative to a negotiated solution to the Iranian nuclear issue, and recognize Iran’s right to peaceful uses of nuclear energy consistent with its international obligations.”

Russia has at least 33 nuclear reactors and India has nearly as many while Brazil and South Africa have two or three nuclear reactors each.

Yet, Iran is the country that leaders say is the threat on the nuclear front. And God forbid Greece embarrass the EU and make a beeline for the other side that includes nuke supporters.

Finland

Finland is another country that stated it would not vote in favor of Greece’s stay in the EU. This is a small country and while it is part of the EU, really, what could taking a stand against Greece cost the country? Why remain stone silent and at the 11th hour, find your voice? Maybe Russia knows the answer.

For 40 years, the Commission on Security & Cooperation in Europe has hosted a meeting with leaders from many countries, including Russia. This year, however, Russia was uninvited. Russia counted on Finland to take its side by not supporting a travel ban that prevented many of Russia’s delegates to attend. Finland chose not to.

Russia’s response? Nikolai Kovalev made it clear the damage to the relations between Finland and Russia was permanent.

Susanna Turunen, YLE editor, was a bit more definitive in her statements:

“Russia sees the situation differently and is now considering counter measures that could involve further trade sanctions specifically targeting Finland…failure is the inevitable outcome of denying entry of the Russian delegation.”

Unfortunately, Finland is the one country that is 100 percent dependent on Russia for its energy.

Maybe Finland is hedging its bets if Greece is ejected. It could be the one country Russia relies on to veto sanctions in the EU. France certainly can’t do it without massive repercussions.

By the way, the countries in the EU have their energy needs met by Russia. In fact, more than half of its energy comes from Russia. It’s like a game of chess for Putin.

Russian expert and economist Edward Lucas sums it up:

If you rely on Russia for your oil reserves, or for a big proportion of your sales, you turn yourself willy-nilly into a hostage. The demands may not be conspicuous. They may not come immediately. But just as water flows downhill, so the power of the Kremlin finds the weakest spot and exploits it.

United States
So now we know why Russia is, for the most part, taken a passive position. But what about the U.S? What is Obama doing?

Well, he’s freeing federal prisoners right after an NAACP luncheon focused on the disproportionate number of men and women of color who are incarcerated.

Oh, and he’s also “integrating races into wealthy communities”. Seriously, I can’t make this stuff up.

He’s creating new national monuments.

Basically, it looks as though “the leader of the free world is indulging in a week of summer vacation” but wrapping it up delightfully as a strategic move in case a deal is struck with Iran.

This Crazy Week: Choose Carefully What Matters

I’d decided earlier this week to steer clear of some of the events that were really heating up on many political, legal and societal fronts. I’m still taking heat from a few of my previous posts, which is OK, but trust me – I stand by everything I say and write. The beauty of that is I live in a country that allows me to do that.

I had a couple of emails this morning, including one from a client, asking me when I intended to write about the evils of same sex marriage. It’s difficult to give the one sentence statement I want to give.

For me, it’s simple: live and let live. I don’t give a rat’s ass who’s cracking whom, who’s marrying whom or who’s getting a divorce. If you know me, you already know I’ve had two failed marriages. I’m hardly the one to take a stand either way on the beauties of marriage. But, there are a few things I can take a stand on because they do affect me.

Facebook is loaded with twisted scripture from the Bible, accusations that same sex marriage was allowed because Christians did not stand up and demand it not pass and promises that the world’s coming to an end any second now. I don’t know who’s going to burn in hell for their choices made in this life, but we’re all going to have to answer for all of our sins. I’ve said it before: I’ll do me, and you do you. I know I won’t have to answer for passing judgment and spreading hate regarding someone else’s sexual identification. If I believe that everything happens for a reason and what’s meant to be will be (and I do believe this), and that everything passes in God’s time, then how can anyone claim to know God’s reasons?

My point is: we’re divided enough in this nation. What’s dividing us are opinions. Nothing more. I’ve got a newsflash for you – we don’t get a say, not really, with the decisions being made on our behalf in this country. If our opinions mattered, we’d have a unified Congress. We hear the politicians griping about the illegal actions of this Administration, yet the most they do is threaten their political enemies…on social media, no less. How many times have we heard different politicians demanding impeachment procedures against someone outside their party? Daily, right? Yet nothing is ever done. They’re griping and listening to their constituents, yet they are also the ones who can make it happen. But what do we hear as their response? Crickets. We hear crickets.

capture-20150627-111918

Rusty Weiss, Political Insider

We are divided in ways we shouldn’t. Why are we turning on each other when the ones making the wrong decisions are behind closed doors and on tables piled with cash? When did we decide it’s better to do war on Twitter and Facebook with each other than look to the root of the real problem? It’s not us against us; it should be us united and demanding answers. Instead, we show our fear with ridiculous posts on social media. Ask any psychologist: anger is often nothing more than fear. Once we realize that, things become clearer.

mississippiSo, back to my point: I won’t be posting on the evils or benefits of same sex marriage. I do not care. What I do care about, however, is the possibility of being told I can’t fly my state’s flag in Mississippi. I do care about being forced to buy insurance I cannot afford and I do care that there are actually people out there who want me to surrender my guns. I do care about Russia and Greece partnering on the Turkish pipeline (that’s happened, but we’ve not felt the repercussions of that yet. Oh, and by the way, pay attention to BRICS angle in the coming weeks and months). I do care about overhearing an oil man in a conference say, “Hell, a terrorist attack might not be so damn bad. At least it’ll drive oil prices up.” And I do care about the fact that we’ve already seen a shooting of a co-worker from an employee who’d just been laid off from a job in the oil sector in Houston. I care because it’s just beginning and it will affect me and you and anyone else in this nation. Who you get in bed with each night matters none to me. The last time I cared about someone getting in bed with someone else, I realized my then-husband was cheating. So no, I don’t care.

It’s all about priorities.