How Far Can The Syria Conflict Spiral Out Of Control

syria

Business is business, so why not buy oil from ISIS. The Russians claim the Turks are doing it, and in all likelihood even Assad is buying it. No one can fight a war without oil, according to Robert Bensh, partner and managing director of Pelicourt LLC oil and gas company.

While the politically unhinged are coming out the woodwork, the more important aspects of this story remain elusive to the public. Is the dangerously unspoken theory that ISIS is a bulwark against Iran what’s keeping the West from tackling the Islamic State wholeheartedly on its territory? With no nation that can control it, the threat is now out of control and a war of ambiguous targets is emerging.

In an exclusive interview with James Stafford of Oilprice, Bensh discusses:

• How far the Russia-Turkey spat can go economically
• The fallout effects for countries caught in between
• What Russia wants
• What Turkey wants
• What other geopolitical purposes ISIS serves
• Why ISIS can’t be controlled
• How Shi’ite radical groups differ
• Why we’re looking at a possible remapping of a significant part of the energy arena
• Why we shouldn’t listen to billionaire buffoons

James Stafford: Just over a week after Turkey’s downing of a Russian jet targeting ISIS oil facilities in northern Syria and Moscow’s imposition of ‘special economic measures’ against Turkey, Russian President Vladimir Putin has warned Ankara that this “cowardly military crime” won’t be taken lightly with just a ban on imports of “tomatoes or some restrictions in the construction and other industries.” Putin also reverted to Allah, noting that ‘perhaps, Allah decided to punish the ruling clique of Turkey by depriving it of its mind and reason.” How much farther can this spat go from a geo-economic standpoint?

Robert Bensh: Russia and Turkey have a great deal of economic interdependence, and nowhere more than in the energy sector. There has been no talk of cutting Russian gas to Turkey, and I don’t see how Russia can afford this right now. Turkey is not only a significant customer for Russia, but it’s also a key gas-transit point.

James Stafford: So what does Turkey want?

Robert Bensh: The better question is: “What does Erdogan want?” You know, Putin’s probably not too far off in his statement referring to Erdogan’s loss of “mind and reason”. Erdogan has been going down this path little by little for some time and it’s no secret that he has some megalomaniacal tendencies that grow more and more out of control every year. It would seem that he has dreams of a return of the Ottoman Empire—and that ISIS could be a logical ally to that end. Of course, ISIS is not likely looking to be beholden to another Ottoman Empire controlling a greater Sunni-Arab dominion. Many, many Turks fail to share this dream with their leader, and his ambitions will also be his eventual downfall unfortunately.

For the Turkish regime, there is also the idea that ISIS will ostensibly give them more power against the rise of the Kurds, both in southeastern Turkey and in northern Syria. It will even raise the Turks’ status in the face of the Saudis whose oil wealth has make them more powerful than the Turks in many ways.

James Stafford: Ok, so what does Russia want?

Robert Bensh: The Russian stance on Syria has been less ambiguous: support Assad and strike ISIS. For Russia, there are a couple of ‘domestic’ angles to this as well. One—they have a radical Islamic problem always on the point of revival in the North Caucasus. The more ISIS is emboldened and empowered, the higher the threat to Russia from within its own borders. Two—the Levant Basin oil and gas prospects. Israel has already made geopolitically game-changing gas discoveries in its part of this basin. Lebanon—if it ever passes the necessary legislation—will also start exploring its part of this prolific basin. Syria has a part in this too, and the Russians already have the right to explore under Assad. They certainly won’t have it under an ISIS-created Sunni caliphate.

James Stafford: Russia claims to have evidence that Turkey was buying oil from ISIS. How much merit do you think there is to this claim?

Robert Bensh: I am not privy to this evidence, but I can tell you this. It certainly has merit in theory. In all likelihood ISIS is even selling oil to the Assad regime that it is fighting against in Syria. Assad needs oil; ISIS needs money. Business is business, even in war and even with your enemies.

James Stafford: What we want to know is why is the West holding back against ISIS? We hear conflicting reports about the targets of air strikes and we can’t get a clear picture.

Robert Bensh: Listen, this is all about Iran at the end of the day, and continually about the Sunni-Shi’ite balance of power. While the West shuffles back and forth uncertain whether to destroy Assad or to destroy the ISIS monster that they helped to create to destroy Assad, and which also in large part arose out of the ashes of the U.S.-led invasion of Iraq that overthrew Saddam Hussein and radically upset the Sunni-Shi’ite balance of power.

James Stafford: Can Western countries, or NATO, effectively defeat ISIS?

Robert Bensh: I suppose the more answerable question is whether the West is willing to truly fight ISIS—at least on ISIS’ territory.

James Stafford: Let me interrupt you here … That’s where many of our readers get lost in this chaos. Why does there seem to be no concerted military move against ISIS by Western nations, aside from the on-and-off airstrikes, the targets of which there is also a great deal of ambiguity?

Robert Bensh: First, let me just stress that I am not a military man, nor am I a politician or a diplomat. I’m a businessman; and businessmen look at things a bit differently because they need to be able to see where things are going and what that means for investments. What I see right now is a great deal of uncertainty as to who the real ‘enemy’ is—or, rather, who the worse enemy is.

There appears to have been for some time an overriding and unspoken conviction that ISIS was a convenient bulwark against an increase in Iranian power, in Shi’ite power. Either propping up ISIS or only half-heartedly pushing it back is a way to keep Iran subdued. This is a mistake that the West has made time again and refuses to learn from. When that bulwark comes back to launch terrorist attacks in your country—well, then it’s too late to rethink strategy effectively.

But here’s the part that I think everyone misses in this cynical way of looking at geopolitics and alliances that are forged along the lines of “my enemy’s enemy is my friend”: Iran can control its Shi’ite radicals. No one can control the Sunni insurgents.

James Stafford: Why is that?

Robert Bensh: That’s easy—and this is where the historical lesson is continually ignored. The Sunni radical groups have been used over and over as a means of destabilizing regimes or the like, and then the modus operandi has always been to cut them loose. So they are armed, organized in a rather haphazard manner and on their own.

James Stafford: From a geopolitical standpoint, can you give us any prognosis for how the ISIS threat or the Russia-Turkey spat could extend with new alliances or other upsets to the balance of power?

Robert Bensh: We are now seeing a clearer re-mapping of geopolitical relationships. And more specifically, geopolitical agendas—some shrouded for some time; others simply incoherent—will surface in the light of day.

James Stafford: Well, we know that Russia-U.S. relations remain deadlocked over Assad and Ukraine, and we know that Russian-Turkish relations are at a dangerous tipping point—but are there some less obvious re-alignments?

Robert Bensh: Ok, let’s take Kazakhstan for instance—a country that is enormously important in the energy equation. Kazakhstan is a geopolitically complicated arena right now. On one hand, it belongs to the Russian-led Eurasian Economic Union (EEU) and boasts Russia as its largest trading partner. But Turkey is also a fairly significant trading partner for Kazakhstan and Turkish companies play a major role in Kazakhstan. These are highly strategic relationships, and one could argue that Turkey is the more strategically important for Kazakhstan. Kazakhstan’s response to Turkey’s downing of the Russian plane illustrates the difficult position in which Kazakhstan finds itself, with one official condemning the Turkish move and then the Foreign Ministry immediately toning that down. It’s trying desperately to maintain neutrality, but this will not be possible.

James Stafford: What does that mean for oil?

Robert Bensh: Again, to even attempt to determine the possible outcome, you have to follow the oil. Kazakhstan’s oil is largely exported through the Black Sea and then the Mediterranean. Turkey holds a major card here because it controls the Turkish Straits and could choose to block Russian tankers. Kazakhstan’s only real path right now is to pay lip service to Turkey to ensure no closing of the straits and to maintain a fair balance with Russia at the same time, but it’s the Turkish Straits that will be first and foremost on its mind.

James Stafford: Thank you for your time. I know that our audience—and most of the American public at least—is desperate to understand what’s really going on here; who ISIS actually is; and who everyone’s supposed to be scared of. This creates a huge amount of public insecurity, and that fear breeds all kinds of other dangers, not to mention support for ill-advised strategies.

Robert Bensh: Here’s the thing. This is when all the crazies come out of the woodwork—and I won’t even waste your time with certain attention-seeking billionaire buffoons here. There are very few analysts in the world who can paint a big picture for you here. No one can truly predict what will come next. ISIS is loosely comprised of too many different groups and alliances, and the emerging threat is becoming much more individual, which makes it much more unpredictable. And as far as geopolitics are concerned, agendas in this game are more often than not being made up as we go along. For the energy industry, it’s touch-and-go. The fate of key pipelines is in question and this conflict threatens to redraw some significant chunks of the energy map.

GM Recalls 1.4 Million Cars; Oil Leaks Can Cause Engine Fires

2000 05 Chevrolet Impala LSDETROIT — For the third time in seven years, General Motors (GM) is recalling cars that can leak oil and catch fire, in some instances damaging garages and homes.

The recall, which covers 1.4 million vehicles dating to the 1997 model year, is needed because repairs from the first two recalls didn’t work. More than 1,300 cars caught fire after they were fixed by dealers, the company said.

In the previous recalls, in 2008 and 2009, GM told owners to park the cars outside until repairs can be made since most of the fires happened shortly after drivers turned off the engines. A spokesman was checking to see if the same recommendation applies this time.

In addition, GM will notify owners of 500,000 more cars that weren’t repaired in the previous recalls, spokesman Alan Adler said.

The latest recall, mainly in North America, includes: the 1997-2004 Pontiac Grand Prix and Buick Regal; the 2000-2004 Chevrolet Impala; the 1998 and 1999 Chevrolet Lumina and Oldsmobile Intrigue; and the 1998-2004 Chevrolet Monte Carlo. All have 3.8-liter V6 engines.

Over time, a valve cover gasket can degrade, allowing oil to seep out. Under hard braking, oil drops can fall onto the exhaust manifold and catch fire. Flames can spread to a plastic spark plug wire channel and the rest of the engine.

GM says it has reports of 19 minor injuries in fires caused by the cars. In 2008, a GM spokeswoman said the cars were responsible for 267 fires, including at least 17 that burned structures.

The problem first surfaced in 2007, when 21 consumer complaints about engine fires in some of the cars prompted the National Highway Traffic Safety Administration to investigate. That probe found three injuries. Most of the blazes happened five to 15 minutes after the engines were turned off, according to agency documents.

The investigation led to the recall in March 2008 of more than 200,000 U.S. cars with supercharged engines. A year later GM recalled almost 1.5 million more cars that weren’t supercharged. Dealers replaced the spark plug wire channels but documents filed with the government don’t mention any repair of the oil leaks.

GM is finalizing a fix in the most recent recall. The company will use state registration databases in an effort to track down the owners and notify them by mail, he said.

The 1,300 fires were discovered when GM began investigating whether to recall some 2004 models that weren’t part of the earlier recalls, Adler said. He said he didn’t know why the recall wasn’t done sooner given the large number of fires.

Company investigators ultimately found 1,345 fires in previously recalled cars and decided “that the recall would be to come up with a better fix for the vehicles that were out there,” Adler said.

The recall is so large that it could have an impact on GM’s fourth-quarter earnings, although Adler said that hasn’t been determined.

“Since we have not decided on the remedy, we do not know whether the cost will result in a material charge to earnings,” he said.

FedEx Sees Record Holiday Shipments on Rising Retail Sales

Earns FedexCHICAGO — Package delivery company FedEx (FDX) said Monday that it expects to see a record number of shipments during this year’s busy holiday season, driven by rising retail sales and a jump in e-commerce.

The Memphis-based company said it expects to handle 317 million shipments between Black Friday, traditionally the busiest U.S. shopping day of the year, and Christmas Eve, an increase of 12.4 percent over the previous year.

“Each year we face a challenge that’s greater and that’s driven by e-commerce,” Patrick Fitzgerald, FedEx senior vice president for integrated marketing and communications told Reuters. “We’ve learned that planning and preparation is key.”

The National Retail Federation has predicted retail sales in November and December — excluding automobiles, fuel and restaurant sales — will increase 3.7 percent to $630.5 billion after a 4.1 percent increase last year. The NRF said online retail sales could increase up to 8 percent, to as much as $105 billion.

FedEx said that it expects to see three spikes in package volumes during peak season, on Cyber Monday and the first two Mondays in December. The company said its holiday projections are included in its full-year fiscal 2016 earnings guidance of between $10.40 and $10.90 a share.

The rapid rise of e-commerce poses challenges for retailers and package delivery companies alike. In 2013 bad weather and a late surge in online retail packages caught FedEx and main rival United Parcel Service (UPS) off guard, leaving an estimated 2 million packages undelivered on Christmas Eve, the majority in UPS’ network.

Last year both companies touted investments in their networks and close collaboration with major retailers to manage package flows during the holidays. UPS ended up over-spending to prepare for package volume spikes that didn’t materialize, hurting its fourth-quarter earnings. FedEx didn’t report any problems.

This year FedEx has invested $1.6 billion in capacity and automation projects at FedEx Ground to help with peak season.

FedEx’s Fitzgerald said that if retailers come in way above forecast with a sudden surge in packages, the company may “need to cap volumes” in order to protect its network.

Fiat Chrysler Recalls Nearly 94,000 Jeeps Over Fire Risk

Auto SalesDETROIT — Fiat Chrysler (FCAU) is recalling nearly 94,000 SUVs because the air conditioning lines are too close to the exhaust manifold and could catch fire.

The company looked into the problem after U.S. regulators got two complaints about smoke and fire in certain 2015 Jeep Cherokees.

Fiat Chrysler says it doesn’t know of any related injuries or crashes. Most of the SUVs are in North America.

Dealers will replace the lines if needed. Customers who lose air conditioning or see a dashboard warning light should contact dealers.

The company also announced that it’s recalling more than 88,000 Ram pickups mainly in North America because the rear axle shafts could break and cause a wheel to separate. Most of the 2015 and 2016 Rams are still at dealers.

The problem was discovered in a company investigation that found the axle shafts weren’t properly heat treated. They can wear and overheat, causing the trucks’ anti-lock brake warning light to come on. Fiat Chrysler says it knows of one crash but no injuries caused by the problem.

How to Tell if You Have a Good 401(k) Match

401k concept word in bird nestThe fastest way to increase your retirement savings is to get 401(k) contributions from an employer. Company 401(k) contributions will grow your account balance far faster than you could on your own. But 401(k) contributions vary considerably by employer, and the match can be difficult to get for people who only stay at a company for a year or two. Here’s how to tell if your employer is providing a generous 401(k) match.

What percentage is matched? The most obvious way to evaluate a 401(k) match is by the percentage of your contributions the company matches. A 401(k) match worth 50 cents for each dollar you save is a 50 percent return on your investment. A dollar-for-dollar 401(k) match effectively doubles your money. Some employers have more complicated match formulas such as dollar-for-dollar for the first 3 percent of pay and then 50 cents per dollar on the next 2 percent of pay. A few companies even set up their matches to vary by age, job tenure or other variables chosen by the company. Often the employer stops matching your contributions once you save a specific percentage of your pay in the account, such as 6 percent of your salary.

How much do you need to save to get the match? Some employers contribute to 401(k) accounts on behalf of employees without requiring them to save anything at all. Other companies require workers to save a specific amount in order to get the match. Savings requirements can make it difficult for people who can only afford to save a limited amount to take full advantage of the 401(k) match. For example, if your employer matches 50 cents of each dollar saved for retirement up to 6 percent of pay, but you can only afford to save 3 percent of your pay, you will miss out on half of the 401(k) match you could have gotten. Many new employees are automatically enrolled in 401(k) plans, typically at 3 percent of pay. Sticking with the default savings rate could cause you to miss out of part of your employer match.

Is there a match cap? Some employers set a maximum amount of money they will contribute to a 401(k) for a single employee. For example, an employer might stop providing a match once you hit $2,000 in employer matching funds in a single year.

How soon does the match start? Most 401(k) plans begin providing a 401(k) match as soon as you start saving in the plan. However, some companies have waiting periods of up to a year before they will match employee contributions to the 401(k) plan.

When do you get to keep the match? You don’t get to keep company contributions to your 401(k)account until you are vested in the plan. Some employers immediately vest workers in the 401(k) plan, while others require a specific number of years of service with the company, such as two or three years, before you get to keep any of the 401(k) match if you leave the job. In this case, people who switch jobs within a year or two won’t get to keep any of the 401(k) match. Other employers allow you to keep a percentage of the employer contributions based on your years of service. For example, if you become 20 percent vested in the 401(k) plan for each year of service and you leave the job after two years you will get to keep 40 percent of the company contributions to your 401(k) plan. You always get to keep your own contributions to the retirement account.

L.L. Bean Hires ‘Outsider’ to Lead Company

LL BeanFREEPORT, Maine — Outdoors retailer L.L. Bean is going outside the company for the first time in its 103-year history for its new CEO, tapping the chief merchandising and marketing officer of a Chinese e-commerce business, officials said Tuesday.

L.L. Bean Chairman Shawn Gorman made the announcement to workers in a memo, telling them the L.L. Bean family and board unanimously agreed to hire Stephen Smith from Chinese online grocer Yihaodian.

“Hiring a CEO who embodies the values of Bean was a top priority for the family and the Board, and I am confident we have done just that,” Gorman told workers Tuesday in the memo provided to The Associated Press.

This photo released Tuesday, Nov. 3, 2015, by L.L. Bean shows new CEO Stephen Smith outside the outdoor retailer's flagship store in Freeport, Maine. For the first time in its 103-year history, L.L. Bean named a CEO from outside the company. (Alan Boutot/L.L. Bean via AP)
Alan Boutot/L.L. Bean via APNew L.L. Bean CEO Stephen Smith

Smith will take over his duties in January, replacing Chris McCormick, who has served as CEO for 14 years.

McCormick, who last year announced his plans to step down, was the first person outside the Bean family to serve as president and CEO. However, he’d worked at L.L. Bean for more than a decade before being tapped to lead the company. He took over from L.L. Bean’s grandson Leon Gorman, who retained the title “chairman emeritus” when he died in September.

Last year, Gorman said the retailer would look for a successor both inside and outside the company, but he said his preference was to promote someone from within L.L. Bean who’s familiar with company culture and “the Bean way of doing things.”

But the company was impressed by both Smith’s understanding of L.L. Bean’s culture as well as his background in multi-channel retailing, having worked for international supermarket owner Delhaize and Walmart International subsidiaries before going to work for Yihaodian in Shanghai. Before that, he worked for the Resort Sports Network and the Hannaford supermarket chain in Maine.

Leon Gorman met Smith before his death and gave his approval, said Shawn Gorman.

“Leon is one of the best judges of character that I know,” Gorman said Tuesday. “Coming out of that meeting with Steve, Leon’s words were, ‘Steve’s the real deal.’ That carries immensely. It’s high praise for someone who is somewhat reluctant with high praise. Leon is a tough guy. So to hear that it’s reassuring.”

Smith said he believes in the company’s customer-first philosophy and brings to the job a requisite love of the outdoors, having grown up fishing, skiing, snowboarding, canoeing and kayaking.

“Trust me, I feel the responsibility of being a great brand steward. I want to continue the legacy. You can’t underestimate it. You have to understand that’s what you’re signing up for,” he said.

Smith joins L.L. Bean as the company prepares for the largest number of store openings in its history.

McCormick previously announced plans to triple the number of stores to at least 100 by 2020. The push will include L.L. Bean’s first West Coast presence with the opening of stores in the Pacific Northwest.

The Maine-based company was founded in 1912, when Leon Leonwood Bean sold his original Maine Hunting Shoe. The company had $1.6 billion in sales last year and has more than 5,000 workers.