The Slog

Oilman, Banker, Soldier, Spy: everything is connected

The interconnected worlds of hedge funds, energy, banking, defence, globalism and geopolitics have the ability at times to make the characters from a John Le Carre novel seem one-dimensional and honourable by comparison. The Slog delves further into the the double-dealing world of the élite, and concludes that perhaps at last its members fear they might have a fight on their hands.

Four funerals and an abduction

Like me and millions of others, you’ve probably been following the growing death-toll among financial persons of late. Following the demise of one Morgan pirate last Sunday week,  A Deutsche Bank executive followed last weekend.

Next came (or rather, went) Russell Investments’ Chief Economist and former Fed economist Mike Dueker, this week found devoid of life by a Washington State roadside. Of this last, police said it looked like suicide, which is all well and good, except he seems to have chosen the most athletic way of leaving this world in history: the 50 year old jumped over a 4-foot (1.2-meter) fence before plummeting down a 40- to 50-foot embankment, Pierce County Detective Ed Troyer said yesterday.

The link, however, doesn’t seem to be merely banking and suicide: still unexplained is the disappearance of David Bird, the oil markets reporter who had worked at the Wall Street Journal for 20 years, who vanished on January 11 2014.

And another death hitherto largely ignored may provide a link as to WTF is going on here: last Monday week, Tata Motors managing director Karl Slym was found dead after falling from a high floor at the Shangri-La hotel in Bangkok. Tata Motors is the automotive arm of the Tata Sons Ltd. group, a business empire headed by Cyrus P. Mistry that includes companies engaged in oil, power generation…and solar.

The immediate commonalities here are jumping, energy, market rigging and whistle-blowing.

All of these men had expressed, at some point or another, a willingness or intention to talk to the authorities about fixes in various financial and commodity markets….oil being an especially prominent one. All fell off things (although we don’t know what happened to Bird yet) none of them were felt to be even remotely depressed, and all were either partnering with, reporting on or working far large global concerns facing very serious regulatory and criminal investigations.

The most definitive way to silence somebody is murder, but even with something as final as death, no motive is ever quite as it seems high up in in the Gods.

Greece, I have always maintained, is most definitely not about a relatively piddling debt that was (it now seems almost certain) exaggerated in the first place: much larger considerations are the country’s importance as a Mideast military base, the alliances of Turkey’s Recep Erdogan, and the vast amounts of new century industrials, gas and oil to be found beneath its territorial waters. Geopolitics and energy are always in the mix somewhere: and you should never assume that energy, Wall Street, the Pentagon and the White House are separate players.

If you can’t get the ship of State to heave to, torpedo it

The same Hedge Fund fate that doomed Greece may yet befall Denmark. Owl Creek Asset Management, a leading high-performance hedge-fund firm, has begun betting against Denmark’s sovereign bonds “in anticipation of a debt crisis”. In turn, Owl Creek has taken up a massive posiiton in credit default swaps on Danske Bank, Denmark’s biggest lender. Nice little pincer movement there, guys.

While the Danes’ debt to disposable ratio is World No 1 at 320%, methinks there is another factor underlying this sudden interest in a relatively obscure Scandinavian country. You see, it just so happens that the Arctic is believed to contain 22% of the technically recoverable oil and gas resources still left in the world. Also, guess what? Denmark has the most solid claim to the largest part of it…and leads the technology race to get it out at a commercial price. But as Offshore technology Magazine reported two years ago,

‘…there are disputes between Canada, Denmark, Norway, Russia and the US regarding rights to use resources and security of transportation through Arctic shipping routes.’

Most market-rigging is not done for profit first.

If you look at gold, QE, Zirp, Libor, derivatives and now oil, more often than not the primary motive lies with the Sovereigns and central banks around the developed world. When I first began writing about gold fundamentals in 2006, I was showered with news to the effect that I was bonkers. Now it is an accepted fact, but it is being done for survival, not profit. The price of the Euro is another example: traders can profit from it, but it has been manipulated by the ECB nonstop since 2009 for entirely political reasons. Oftentimes, the price of oil makes little sense, and the excuses given for ups and downs simply don’t check out…until you think about who wants low prices at the pumps, and who has done what deal with which Mideast maniac.

Are the MoUs finally on the run?

Twenty years ago, I used to dismiss oil conspiracy theory as bunk. Now you’d be blind to do so. To cloak the interference in Iraq, Iran, Libya and now Syria as genuine concern about human rights means merely that you suffered concussion when toppling off the Christmas tree.

However, one senses that it is increasingly important for those Uptop that no further evidence emerges of malign sovereign/central banker motives…especially in the light of Wikileaks and Philip Snowden. Be under no illusion at all: if such were to emerge and show clear evidence of persistent fraud on a global scale, the balance of belief could so easily tip in favour of the cynics. Five deaths to plug holes in the wall of silence are as nothing in that context.

Everything is connected.

Since the start of 2014, we have seen crude and brazen depression of bond yields in Italy and Spain, almost certainly linked to Japan: there are personal Draghi reasons for this, but also EU/Abe geopolitical ones. However – and this is significant I think…..no bond help in the way of rigging was offered to Greece. For it is important in the Global Energy Game that Greece remains a prisoner, made at all times to fell weak and outnumbered: it was promised Christmas debt relief, it didn’t get it. Now – Bloomberg reports today – the new bailout deal from the EU is set to include extending the maturity on rescue loans to 50 years. The plan will be considered by policy makers during March and April…a good idea this one, as Athens will default on its loans bigtime without help in May. And the Sprouts don’t want that: they just want the cowering mouse shivering in fear forever….for in the hole, Greece has riches beyond even Venizelos’s wildest dreams. And the Cat must have his cream.

And the same is true of Denmark. Within ten years, if one believes even 10% of peak oil theory, Denmark could have the highest per capita wealth on the planet, and be the world’s biggest oil exporter. There is no way the Big Boys Club can live with that one. So Denmark too must be torpedoed.

As I suggested at the outset, if this piece reads like vintage John le Carré, then (a) I’m flattered and (b) I make no apology. Sometimes, things really are just Snafu. And at other times, four badly-disguised murders in 18 days by enforced jumping all involving whistleblowers merely shows the lack of imagination of the average security services field operative.

This is, without any doubt, a story to which you really should stay tuned.

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