Eastern Libya News Part 2: Conflict with Tripoli?

Conflict with the Tripoli Government? Via Reuters, we learned earlier this month that the Prime Minister (in Tripoli) recently reshuffled his cabinet.

In the reshuffle, Serraj appointed Fathi Ali Bashagha as interior minister. He comes from the western city of Misrata and is close to its armed groups, some of which took part in the Tripoli clashes. The government also named a new economy and industry minister, Ali Abdulaziz Issawi, who comes from Benghazi in eastern Libya, home to a rival administration. Issawi is a veteran figure from the rebels who toppled Gaddafi.

I speculated at the time: It isn't mentioned in the Reuters article, but it would be interesting who lost their job as interior minister. Also, not sure if the economy and industry minister is a new position or got a new minister. Either way, someone has to be upset by these appointments.

Eastern Libya News Part 1: Expansion into Southern Libya?

Expanding to the South? Asharq al-Awsat (admittedly, I've never heard of this site) reports the following about the Libyan National Army (the LNA controls Eastern Libya via strongman Khalifa Haftar):

The spokesman for the Libyan National Army, Brigadier General Ahmad al-Mesmari, said that Libyan National Army commander Khalifa Haftar is planning to eradicate Sudanese, Chad and local insurgent groups that are threatening the national and strategic security in the south.

Sweden: Social Democrats turn to form a government

Sweden is currently attempting to form a government. To form a government, a party (or group of parties) needs 175 votes. A minority government can form if other parties allow it. As mentioned in prior blogs, their are 2 main blocks of parties: the centre-left and the Alliance. There is also the far-right Sweden Democrats.

There was already one attempt to form a government via the Alliance.

Currently the centre-left is attempting to form a government.

Via Politico:

Sweden’s caretaker Prime Minister Stefan Löfven has two weeks to try to form a governing coalition after the center right failed to win support in the wake of September’s indecisive election . . . The acting premier said he would speak to all the mainstream parties, including center-left groups allied to his Social Democrats and those from the Moderate-led Alliance. But he said he wouldn’t consult the anti-immigrant Sweden Democrats, who have so far been ruled out as potential partners by both major parties. 

Oil: Petrochemicals Growth Forecast

IEA released a forecast for petrochemicals demand growth. Per the article, petrochemicals are plastics, fertilizers, packaging, clothing, digital devices, medical equipment, detergents and tires.

Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding nearly 7 million barrels of oil a day by then. They are also poised to consume an additional 56 billion cubic metres (bcm) of natural gas by 2030, and 83 bcm by 2050.

Demand for plastics – the key driver for petrochemicals from an energy perspective – has outpaced all other bulk materials (such as steel, aluminium, or cement), nearly doubling since 2000. Advanced economies currently use up to 20 times more plastic and up to 10 times more fertilizer than developing economies on a per capita basis, underscoring the huge potential for global growth.

Based on this, the growth won't be driven by the US and Europe, but by developing economies catching up to the US and Europe.

Venezuela: Economic Crisis Update

First off via the Economic Times, we learn that the International Monetary Fund is predicting inflation in Venezuela will hit 10 million percent.

The collapse has led to shortages of food, medicine and other basic goods, and prompted an exodus of Venezuelans that has overwhelmed neighboring countries. The IMF said on Tuesday the economy would contract 18 percent in 2018, consistent with its July forecast, and 5 percent in 2019.

Reuters has an article about how recent moves by the Venezuelan government has led to protests at the oil corporation PDVSA. Venezuela recently increased the minimum wage by 60-fold. Of course, this leads those who were making above minimum wage to protest:

Sweden: Negotiations (involving far right party Sweden Democrats?)

Just to list out the major players before going into Sweden's post-election politics:

Swedish parliament speaker: Andreas Norlén

Leader of the centre-right Alliance (Moderate party): Ulf Kristersson

Past prime minister though still caretaker of the government (centre-left bloc): Stefan Löfven

Sweden Democrats leader (far right political group): Jimmie Åkesson

Moderates chairman (part of the Alliance): Benjamin Dousa

Centre-left bloc parties:

Social Democrats (100 seats)
Left Party (28)
Green Party (16)

Alliance parties:

Moderates (70)
Centre Party (31)
Christian Democrats (22)
Liberals (20)

Sweden Democrats (62)

Libya: Tripoli News

The Washington Post recently had a lengthy article on Libya. In some ways it is just summarizing some of the militia fighting that is occurring between the Seventh Brigade, that comes from outside of Tripoli, versus the militias that are located in Tripoli, Tripoli Revolutionary Brigades and the Nawasi. The article does have this interesting analysis:

“The GNA has been on life support for a considerable period of time,” said Mary Fitzgerald, a Libya researcher who has focused on the country’s militias. “This current episode underscores its powerlessness, and the fact that it depends on these armed groups more than these armed groups depend on it.” Serraj’s [Prime Minister Fayez al-Serraj] words “simply do not have any effect,” she said.

Oil: Future Supply Shock?

Wood Mackenzie, a research and consulting group, recently issued a report about the lack of major oil discoveries. This lack of major oil discoveries is directly correlated to a lack of investment. The study is based on a revised forecast by the group, looking out to 2040.

Their big concern is that exploration spending has dropped from $60 billion in 2014 to $25 billion in 2018. The result is that discoveries of oil has dropped from 8 bn bbls p.a. in the early 2010s to just 2 bn bbls p.a. since 2014. (My assumption is that bn bbls p.a. means billion barrels per annum).

Tesla: SEC Lawsuit

The big news last week on Tesla was that:

a.) The SEC thought it had a deal with Elon Musk regarding his 420/funding secure to take his company private tweet and the necessary penalties due to that tweet.

b.) The deal fell apart so the SEC brought a lawsuit (Thursday, 9/27).

c.) On Saturday (9/29), Elon Musk accepted a deal that was worse than what was reportedly the deal he initially rejected.

Tesla: Are they finally running out of VPs?

I'm being a little sarcastic here, but how many VPs does Tesla have left? The LA Times (as well as many other sources), reports that Liam O'Connor, vice president of global supply management, resigned recently.

O’Connor, who joined Tesla in March 2015 from Apple Inc., is at least the fifth senior executive to be parting ways with the carmaker within the span of a few weeks. The company has lost its chief accounting officer and heads of human resources and communications this month. Justin McAnear, the vice president of worldwide finance, is slated to leave in early October.

Sweden: post-Election Stalemate

The New York Times has some Swedish post election thoughts.

Prior to getting into the article, it must be reminded that the various Swedish political parties coalesce around 3 distinct groups.

You have the center-right group called the Alliance. They're made up of 4 parties: Moderate, Centre, Liberals and Christian Democrats.

You have the left group called the Red Greens. They're made up of Social Democrats and the Green Party with help from the Left Party.

Then you have the far right group called the Sweden Democrats. The Alliance and Red Greens have said they won't negotiate with the Sweden Democrats to form a government.

As the article states, the problem with the post-election is that nobody has a majority. The red-green alliance has 144 of the 349 seats. The Alliance has 143 seats. The Sweden Democrats have 62. So that's the 349 seats. To have the majority, you need 175.

The New York Times lays out 4 potential scenarios to resolve this stalemate.

First: The Red Greens are able to convince the Liberals and Christian Democrats to switch sides. The two control 42 seats between them. That would get the red-green alliance to 186. You'd need both of them to switch over.

Second: Though both alliances have said they won't form an alliance with the Sweden Democrats, there could be negotiations with the center-right where the Sweden Democrats vote for this alliance to lead the nation. They'd need to get something back in return.

Third: Neither alliance needs a majority as long as the majority support one of the alliances to form a government. So there would be a need for an agreement between the two major alliances on who gets to form the government.

Fourth: After four votes to form a parliament, another election will occur.

To me, for right now, the second and third scenarios are off the table. I don't think anyone would be willing to align themselves with the Sweden Democrats at this point (though it could happen if another election creates different splits). And I would think that with such a close vote, one of the alliances would be more than willing to go for another round of voting to see if things might give them a larger portion of the seats. You may as well gamble and hope you win a few more seats in the second round. If one of the alliances was able to get a significant higher seat count than the other (more than the 1 seat difference), maybe you start having more political power to say your alliance should run the government.

So I guess that means I'm leaning towards either the Red Greens are able to steal a 2 parties from the Alliance (first scenario) or we go for another election (fourth scenario).

I think all the articles I've read about Sweden politics states that the Sweden Democrats have neo-Nazi backgrounds. However, none spent the time to bring a little history lesson. The New York Times was kind enough to write a few sentences about the history of the Sweden Democrats. Here's a brief quote:

The Sweden Democrats, founded in 1988, grew from southern Swedish protest parties with ties to neo-Nazis and a racist movement called Bevara Sverige Svenskt (“Keep Sweden Swedish”). They wanted to prohibit adoption from outside Europe and repatriate all immigrants who had arrived since the 1970s, Mr. Nilsson said, adding, “They didn’t want dark-skinned people in Sweden.”

Yemen: UN envoy and other notes

Al Jazeera provides some recent news on Yemen.

1. A UN special envoy arrived in Sanaa, Yemen to talk with the Houthi rebels.

2. The Saudi-UAE-backed government forces are closing in on taking over the port city of Hodeidah (Reuters, via a prior post, uses the spelling of Hodeida). This port is used to bring in supplies to Yemen (food, etc), but is also considered the way that Iran supplies the rebels with weapons.

3. Here's an interesting history lesson:

With logistical support from the United States, Saudi Arabia and the United Arab Emirates have carried out attacks in Yemen since March 2015, in an attempt to reinstate the internationally recognised government of President Abd-Rabbu Mansour Hadi. In 2014, Hadi and his forces were overrun by the Houthi rebels who took over much of the country, including Sanaa. Since then, they have recaptured some of the territory previously lost.

Pensions: Chicago and $10 billion bond for pensions

Earlier this year, a recommendation was made that Illinois should borrow $107 billion to help deal with their pension problems. It now looks like Chicago is mulling a similar option via what is called pension obligation bonds (POB). Per Marketwatch:

Chicago is contemplating a bond sale of $10 billion to help pay down its $28 billion of unfunded pension liabilities. Its exploration of such a deal speaks to the city’s dire financial straits. Chicago’s general obligation bond ratings range from junk, in large part because of the pension burden, to single-A among the major credit ratings agencies, and it has struggled to fill budget gaps beyond pensions.

Part 3: International Maritime Organization (IMO) - About to Cause an Oil Spike?

A lot of news was made when Philip Verleger, an economist, issued a report regarding how the new regulations from the International Maritime Organization (IMO) would cause a spike in oil prices starting in 2020. The regulation states that starting in January 2020, ships must use lower sulfur fuels (dropping from 3.5% to 0.5%). Via Reuters, Goldman Sachs has a different take on the impact:

Goldman forecasts scrubber installations at 3,125 in 2020 and 4,450 in 2022. It expects scrubbed high-sulfur fuel oil (HSFO) consumption at a total of 1 million barrels per day (mbpd) by 2020 and 1.4 mpbd by 2025.

Installing scrubbers is one way that ships can meet the lower sulfur content rules.

Sweden: Sunday Elections

I've written a few blog posts about the upcoming Swedish elections. Well, the elections finally occurred. Per CNN:

A far-right party with roots in the neo-Nazi movement won a surge in support in Sweden's general elections Sunday, partial results show, as anti-migrant sentiment rises in the once-open Scandanavian country. With votes in more than half of around 6,000 districts now counted, the far-right Sweden Democrats have won 17.9% of the vote, up from 12.9% in the previous 2014 elections, Expressen TV reports.