Peter L. Berger's Blog, page 651

Will Paris Leave the Lights on for Airbnb?

Clashes between France’s old and new economy hit international front pages this week when cab drivers violently protested the rise of ride-sharing company Uber. Meanwhile, if less in the public eye, Paris officials are grappling with another growing pain of the new economy: the expansion of Uber’s home-sharing peer website Airbnb, which served twenty times more customers in the City of Lights last summer than in 2011, according to the company. Though investigators track down “unauthorized apartments” and threaten owners with hefty fines, the number of illegal operators is estimated to be very high, reports the WSJ: 

Paris has bragged about its status as the top Airbnb market. But the firm’s impact on housing remains a matter of discussion. Paris officials say there are some 30,000 tourist apartments available for rent in the city—about 2% of the total number of units—with as many as two-thirds operating illegally. Airbnb says that it is a fringe issue on its platform; just 17% of hosts in Paris say they rent out apartments other than their primary residences. It isn’t clear how many of those might be doing so without city authorizations.

Some hotel owners and other activists argue that full-time tourism apartments likely account for more than that in revenue terms, however. “You can’t call this a sharing economy anymore,” said Laurent Duc, president of the French Hotel Federation. “This is an underground shadow economy.”

While we wonder how materially Mr. Duc’s role at the Hotel Federation factors into his dramatic assessment, he does home in on an issue that more broadly afflicts policymakers as they look to legislate on the sharing economy: classification. How many days must one reside in an apartment for it to be considered residential; at what point should owners be forced to pay tourist taxes; to what standards of operation should Airbnb units be forced to adhere? Essentially, as the WSJ writes it, what is Airbnb?

Particularly with respect to housing in major cities, with their many and often confusing statutes and regulations, categorization is a necessary evil. The problem, as we’ve written before, is when legislators seek lazily to apply categorizations of the past to new innovations. As with California’s ruling on whether Uber drivers are independent contractors or employees, the proper solution may eventually be to create a new classification entirely—one better suited to the demands of the changing economy.Though it may be easier for governments to rebuke rather than to adapt to such changes, it is clear—simply by usage—that these services have become an essential and popular function of our modern economy. It will behoove smart politicians to enable, not hinder such progress.

US Navy Clicks to Ignore Updates

The U.S. Navy has commissioned Microsoft to extend support for its suite of Windows XP applications from 2003, for which the company had discontinued service last year. IDG news has more information on the arrangement:

The Space and Naval Warfare Systems Command, which runs the Navy’s communications and information networks, signed a $9.1 million contract earlier this month for continued access to security patches for Windows XP, Office 2003, Exchange 2003 and Windows Server 2003.

The entire contract could be worth up to $30.8 million and extend into 2017.

The situation isn’t unique among our most important government operations—the IRS, for example, has just begun its migration from XP to 2009’s Windows 7—many of which still run on obsolete systems. Without the extended support from Microsoft, the Navy’s systems would be “more susceptible to intrusion … and could lead to loss of data integrity, network performance and the inability to meet mission readiness of critical networks.” Following a year that saw unprecedented growth in data-related hacks, it is alarming that a pillar of our national defense complex is lagging so far in the past. As we pointed out at the new year, the web-based threats loom ever-more dangerously, even as we store more of our lives online.

Much of the rise in cyber-related crime is attributable to the multiplication of our internet usage and our penchant for monitoring and storing everything we do. Still, the Obama administration, which has endured its own fair share of tech-gafs, is not blameless. At a moment when the Director of National Intelligence has deemed cyber terrorism the largest threat facing our country, it is essential that our government be proactive in maintaining and improving our virtual security apparatuses. Stories like this show just how high the mountain still is to climb.

Sins of the Father

The Spy’s Son

Bryan DensonAtlantic, May 2015, 368 pp., $26  The Billion Dollar Spy David E. HoffmanDoubleday, July 2015, 336 pp., $28.95

Spying is the art of betrayal. If we accept it as the second oldest profession in the world (there were spies in the Bible and in the records of ancient China and Mesopotamia), then it follows that betraying is as much a time-honored habit as a natural instinct, as elemental and as universal as hating or loving. John le Carré recognized the link. “Love,” he explains in The Looking Glass War, “is whatever you can still betray.”

Such betrayals have always been enacted within a shady, murky realm full of smokescreens, obfuscations and denials. Despite attempts at transparency after spies came in from the cold, today’s world of spying feels like an even grayer area than ever before—to the extent that it is hard to define what constitutes “betrayal.” For some, the likes of Julian Assange, Edward Snowden, and Bradley Manning are perfidious, secret-leaking traitors who should rot in jail; for others they are principled, whistleblowing heroes who should not only be free but also applauded.Some decades earlier, it was all so much more clear-cut. Spies were unmasked, branded traitors, and punished accordingly. Jim Nicholson, the highest-ranking CIA officer to be convicted of spying, is currently serving a 23-year prison sentence at a Federal correctional institution. Adolf Tolkachev, one of the most productive Soviet sources for the CIA during the Cold War, was snared by the KGB and executed. Few dispute that Nicholson got what he deserved. In Russia, Tolkachev is only mourned by his son.Two new books shine a light on the daring, game-changing exploits of both men. In The Spy’s Son, investigative reporter Bryan Denson describes Nicholson’s rise and fall, and that of “the son who joined him in the family business of espionage.” In The Billion Dollar Spy, Pulitzer Prize-winning author David E. Hoffman shows how Tolkachev was driven not by greed or ideology but vengeance to pass thousands of secret documents to the U.S.The Spy’s Son opens in Eugene, Oregon, in the fall of 2008 and introduces us to Nathan Nicholson, a 24-year-old college student. For the past two years, Nathan has divided his time between studying, visiting his father behind bars and, at his parent’s behest, couriering top-secret messages to Russian agents. So far this chip off the old block has made clandestine deliveries in San Francisco, Mexico City, and Lima. His next port of call is Cyprus. He flies there, passes information to his handler, collects $13,000 for his trouble, and is instructed to meet again one year later in Slovakia. Shortly after arriving back home he is jolted from the fog of jet lag by two Feds pounding at his door. Has his lucky streak come to an end?Denson leaves us with this cliffhanger and branches off to tell Jim’s story. He joins the CIA, enjoys a series of foreign postings, and rises through the ranks. Crunch time comes in 1994, when he is tasked with meeting the rezident or station chief of the SVR, the KGB’s successor, in Kuala Lumpur, with a view to coaxing him to work for the CIA. Instead, Jim offers his services and changes sides. For much needed cash he agrees to give up the identities of hundreds of new recruits at the CIA’s training center, The Farm. A double life begins.In time, Denson weaves a third strand into his narrative, and in so doing answers what Le Carré called “the oldest question of all” in Tinker, Tailor, Soldier, Spy: “Who can spy on the spies?” Enter a small, top-shelf team of FBI spy-catchers to sift and identify any CIA bad apples. Jim raises suspicions among counterintelligence agents who notice he has been depositing more money than he earns, and a polygraph operator smells a rat when Jim keeps flunking the same two questions about having and hiding contact with a foreign intelligence service. Through intensive undercover trailing and electronic eavesdropping the scope of Jim’s duplicity is revealed and the net closes in on him.Denson skillfully traces Jim’s journey from U.S. intelligence officer to convicted spy to U.S. prisoner. But neither disgrace nor incarceration stymies Jim’s illicit dealings with the Russians. Adoring and impressionable son Nathan is talked into smuggling out his father’s jottings and passing them on to the head of security at a Russian consulate. Prison visits are spent with Jim furtively teaching Nathan rudimentary tradecraft and slipping him more transcribed accounts of accumulated wisdom and know-how. “And so it was that in the middle of October 2006, a dozen years after Jim began spying for the Russians, he sent them his youngest son.”Jim was not to know that the son he was training to be his intrepid envoy would in due course be a lamb led to the slaughter. Indiscretions become blunders, which once again put the FBI on the scent. At this point a wearying sense of déjà vu could have crept into the story, but Denson keeps things fresh by regularly stoking the tension, whether by recounting the frantic monitoring of cryptic phone calls and correspondence between father and son, or the cat-and-mouse game of evasion and pursuit in exotic locales. Just when we come to believe that Nathan’s arrest might herald cathartic release, Denson fills the last stretch with the court case and an agonizing dilemma: Will Nathan cut a better deal for himself by testifying against his father?There are numerous instances, not least this highly charged denouement, when we want to take Denson to task for heedless sensationalism. We hold back, however, on remembering that his story is factual, that this soap-operatic melodrama actually happened. What especially beggars belief is not rookie Nathan’s operational slip-ups but those of his father, the old pro (stepping into a car with Russian diplomatic plates; copying a trove of classified files to his laptop). A different kind of bad is Jim’s naivety. When he isn’t sitting in his cell learning Russian and dreaming of a new-start on his release, he is cobbling together a hare-brained escape plan for Nathan to propose to his handler—one involving a Russian extraction team in a helicopter plucking him from the prison’s outdoor recreation yard and transporting him to a waiting submarine.Despite the careful plotting and well-calibrated excitement, Denson’s narrative is let down in places by bizarre phrasing (“He had flown home that fall with an honorable discharge and a duffel bag of despair”), bland repetition (we are constantly in the “bowels” or the “bosom” of buildings), and known fact masquerading as sharp insight (“Swiss banks are spectacularly secretive”). And then there is his curiously erratic style. Chapters begin with portentous epigraphs from the Bible, Sun Tzu or T.S. Eliot, then cover the latest grim, tense or fantastical developments in prose that alternates between boardroom serious and locker-room familiar. After the Cold War, Denson informs us, Russian spying would be “a grudge rematch against the West, which had quietly knocked their dicks in the dirt.” In court Jim sits with calm resignation, “not eye-fucking the prosecutors.” Spy-catcher Maguire “took his seat, his sphincter already tight enough to crush walnuts.” There is one notable occasion when we are told that “Maguire now wanted the narcissistic prick behind bars.” But Denson is ventriloquizing Maguire; this vitriol is Denson’s, and when it overspills it pollutes what is otherwise a cool, neutral reportorial tone.Perhaps what is most jarring is the book’s title. Simply stated, The Spy’s Son is a misnomer. Denson serves up a cautionary tale of how the sins of the father are visited upon, and then committed afresh by, the son. As such, in this double-whammy of betrayal, Jim and Nathan deserve joint top-billing.Less contentious, more aptly titled, and focusing on only one traitor (this time betraying the Soviet Union) is Hoffman’s The Billion Dollar Spy. Drawing on numerous operational cables between CIA headquarters and the Moscow station from 1977 to 1985, Hoffman shows how a Soviet engineer who had grown increasingly disgruntled with the Soviet state sought to dismantle it by selling secrets to the other side.Unlike Denson, Hoffman doesn’t so much cut to the chase as take slow, leisurely steps. But this is no bad thing. His early chapters measure the political temperature of the fifties and sixties and chart two big breakthroughs for the CIA in Moscow: securing Pyotr Popov and Oleg Penkovksy, two officers in Soviet military intelligence, to spy for the U.S. However, following both men’s exposure and executions and their American handlers’ expulsion from the country, a long drought set in, whereby the only intelligence trickling into the CIA was of the low-grade variety peddled by small-fry Soviet agents.That all changed in 1978 when the chief of the CIA’s Moscow station was handed an envelope by a man on the street. In it was jaw-dropping documentation of Soviet radar and avionics capabilities. The haul was too good to be true, and prompted senior spooks to suspect a trap. The man was rebuffed for more than a year and a half, but his perseverance won the day. After checking out his bona fides and evaluating his intelligence, the CIA realized that their man, Adolf Tolkachev, was the real deal and the most prized source they had had to date.Tolkachev was well aware of his value and so named his price. As the quality of his intelligence rose, and the risks he took to get it became greater, he adjusted his rate of remuneration accordingly. Hoffman recounts a misunderstanding over his request for a six-figure sum. “I had in mind not a figure with six digits,” Tolkachev explains in a note to the CIA, “but a number with six zeros.” The CIA had never paid an agent on such a scale before, but when they calculated that his intelligence saved them at least $2 billion in research and development costs, his million-dollar salary suddenly justified itself. Tolkachev, Hoffman writes, “was the Moscow station’s crown jewel of human source intelligence collection.” On the other side and at the opposite end of the spectrum, poor old Nathan Nicholson was only able to glean a paltry $47,000 from the Russians.Hoffman takes us through the last years of the Cold War, from Reagan entering office (and ramping up activism against the Soviet Union) to the arrival of Gorbachev and the prospect of a thaw in American-Soviet relations. We hear of Tolkachev’s covert meetings with his case officers, his updated wish-lists (Led Zeppelin and Alice Cooper albums for his son; samizdat books by Solzhenitsyn, and a cyanide capsule for himself), and in a suspenseful climax learn how he was betrayed from within the CIA. Instead of wrapping up with Tolkachev’s capture and tragic fate, Hoffman appends a fascinating epilogue which fast forwards to Operation Desert Storm in 1991 and demonstrates the way Tolkachev’s decade-old intelligence helped the U.S. Air Force down Soviet-built tactical fighters in aerial combat over Iraq.In one chapter Hoffman rewinds to fill us in on Stalin’s show trials and Great Terror. We locate the origin of Tolkachev’s deep antipathy to the Soviet state, his disdain of the “impassible, hypocritical demagoguery” of Khrushchev’s party politics, and come to sympathize with his later decision to injure the whole system by betrayal. This backward step will be, for some readers, either an elucidating offshoot or a meandering deviation. Whatever the case, once Hoffman brings Tolkachev back to the present, we feel once again in thrall to the momentum of his main, thundering narrative.It is becoming something of a cliché to refer to a riveting factual or autobiographical history as being “like a thriller.” But at the risk of continuing this trend, both of these spy books are genuinely, at times compulsively, gripping. Denson’s is wilder, brasher, gutsier; Hoffman’s is more sober, more chilling, and brimming with cloak-and-dagger intrigue. Both are meticulously researched and replete with authentic and arcane tradecraft. And yet while Hoffman supplies the expected dead drops, brush passes, and false flags, Denson’s spy-speak teaches us a new language. Beholding access agents or plank holders dry cleaning, using accommodation addresses, or hanging out the shingle puts us in mind of Le Carré’s lamplighters and scalphunters coat trailing, raiding reptile funds, or plotting mailfist jobs.At the end of The Billion Dollar Spy, we are told that Tolkachev’s wife, Natasha, remained angry after her husband’s death about the fact that he carried on his spying despite assuring her he would stop. It wasn’t the ethics of espionage she objected to, rather the danger to the family. Jim Nicholson knew the risk involved with his treachery but then for some unfathomable reason went on to groom his son to fill his shoes. If we cut through the intricate webs of deceit and swaths of skullduggery, we find in both informative and captivating books two very different fathers—one reckless, one selfish—each attempting to do the right thing for those who mattered most. In shadowing them, Denson and Hoffman home in on what Graham Greene called “the human factor,” tracking motivations, sifting loyalties, and assessing the damage a spy does not just to his country but also his family.

Greeks to Vote Twice: With Ballots, but First with Banks

European negotiations over the Greek crisis have broken down for seemingly the umpteenth time, and Greek Prime Minister Alexis Tsirpas has called for a referendum to be held on July 5, five days after the June 30 deadline for the current bailout extensions. But will the Greeks even make it that far? As Bloomberg reports, the slow-motion bank run we’ve been covering since January has accelerated rapidly:

Two senior Greek retail bank executives said as many as 500 of the country’s more than 7,000 ATMs had run out of cash as of Saturday morning, and that some lenders may not be able to open on Monday unless there was an emergency liquidity injection from the Bank of Greece. A central bank spokesman said it was making efforts to supply money to the system.

Some banks were placing limits in daily bank note and ATM transactions. Yiota Kardogianni, a manager at a branch of Piraeus Bank SA, said cash withdrawals were limited at 3,000 euros ($3,350) daily and ATM withdrawals at 600 euros. Alpha Bank AE had set a daily limit of 5,000 euros for most of its branches since last week.

As we’ve written before, the first rule of a bank panic is, don’t panic; but the second rule is, if there is a bank panic, panic first. It appears more and more Greeks are getting that idea.

As a result, the Greeks will essentially have two referenda—the formal one, on the bailout proposal, but also an informal one, on the soundness of their banking system, cast with ATM cards and withdrawal slips. That one will come first. If enough depositors withdraw cash by Monday, or next week, to trigger capital controls (which, as we’ve noted, are hard to undo), the referendum may well be rendered moot.
We’ll have to see how the politics work out, but it’s looking as if the political system in Greece is on the edge of revolutionary change. If the people back Tsipras in the referendum and spurn the EU conditions, then he’ll have a mandate for radical measures in the chaos and bitterness that will almost certainly ensue.

Meanwhile, tourists among our readership may well want to start getting out of the country. If currency controls or bank panics or both ensue, it’s not clear whether credit cards will be processed. There could well be strikes at airports, among taxi drivers, and among public workers, including customs and passport officials. WRM was once stuck for several days on the Macedonian border when a strike closed Greek border posts. Nobody crossed the border until their demands were met.

And don’t delay. Outbound flights will fill up fast. (A ferry to Italy might be an excellent choice. We have an intern at TAI who’s there on vacation, to whom we’ve passed on the same advice.)




Of course, it could all fizzle out (as cartoonist Matt has noticed over at The Telegraph, every day has been doomsday in Greece for a while now), but the Greeks are really running out of room. It’s hard to see how the ECB can continue aid to the banks after this. After all the talk by politicians, things really may be decided by ordinary Greeks after all. Just not the way their Prime Minister had in mind.

Greeks To Vote Twice: With Ballots, But First With Banks

European negotiations over the Greek crisis have broken down for seemingly the umpteenth time, and Greek Prime Minister Alexis Tsirpas has called for a referendum to be held on July 5, five days after the June 30 deadline for the current bailout extensions. But will the Greeks even make it that far? As Bloomberg reports, the slow-motion bank run we’ve been covering since January has accelerated rapidly:

Two senior Greek retail bank executives said as many as 500 of the country’s more than 7,000 ATMs had run out of cash as of Saturday morning, and that some lenders may not be able to open on Monday unless there was an emergency liquidity injection from the Bank of Greece. A central bank spokesman said it was making efforts to supply money to the system.

Some banks were placing limits in daily bank note and ATM transactions. Yiota Kardogianni, a manager at a branch of Piraeus Bank SA, said cash withdrawals were limited at 3,000 euros ($3,350) daily and ATM withdrawals at 600 euros. Alpha Bank AE had set a daily limit of 5,000 euros for most of its branches since last week.

As we’ve written before, the first rule of a bank panic is, don’t panic; but the second rule is, if there is a bank panic, panic first. It appears more and more Greeks are getting that idea.

As a result, the Greeks will essentially have two referenda—the formal one, on the bailout proposal, but also an informal one, on the soundness of their banking system, cast with ATM cards and withdrawal slips. That one will come first. If enough depositors withdraw cash by Monday, or next week, to trigger capital controls (which, as we’ve noted, are hard to undo), the referendum may well be rendered moot.
We’ll have to see how the politics work out, but it’s looking as if the political system in Greece is on the edge of revolutionary change. If the people back Tsipras in the referendum and spurn the EU conditions, then he’ll have a mandate for radical measures in the chaos and bitterness that will almost certainly ensue.

Meanwhile, tourists among our readership may well want to start getting out of the country. If currency controls or bank panics or both ensue, it’s not clear whether credit cards will be processed. There could well be strikes at airports, among taxi drivers, and among public workers, including customs and passport officials. WRM was once stuck for several days on the Macedonian border when a strike closed Greek border posts. Nobody crossed the border until their demands were met.

And don’t delay. Outbound flights will fill up fast. (A ferry to Italy might be an excellent choice. We have an intern at TAI who’s there on vacation, to whom we’ve passed on the same advice.)




Of course, it could all fizzle out (as cartoonist Matt has noticed over at The Telegraph, every day has been doomsday in Greece for a while now), but the Greeks are really running out of room. It’s hard to see how the ECB can continue aid to the banks after this. After all the talk by politicians, things really may be decided by ordinary Greeks after all. Just not the way their Prime Minister had in mind.

Thank Shale and Fire Up the Grill This Summer

Fracking has the U.S. awash in oil and natural gas, as has been well documented. But the shale boom has also boosted supplies of a byproduct of natural gas drilling, and that should come as welcome news to Americans hoping to gather around the grill this year. Bloomberg reports:

Propane inventories have soared to the highest seasonal level in more than 30 years, sending prices in Texas to a 13-year low and forcing sellers in Canada to pay people to take it away.

The bargain-basement price is a byproduct of the U.S. shale boom, as record production of natural gas has doubled the supply of propane, commonly used for heating, crop-drying and cooking. The glut of natural gas liquids has turned the U.S. into the world’s biggest supplier and helped revive the nation’s petrochemical industry.“We’ve gone from North America being a net importer of propane to the U.S. being the single largest exporter of propane,” said Michael Sloan, a Fairfax, Virginia-based principal at consulting firm ICF International Inc. “It’s a good time to fill up your propane tank.”

Propane prices are at their lowest level since 2002 as shale has nearly doubled domestic propane production since 2009. These are, in other words, boom times. Cheap propane isn’t just a boon to the country’s grilling aficionados (though some might spurn the gas in favor of charcoal)—many homes are heated on propane. In that sense, cheaper prices can have a real impact on the heating bills of many American households. Remember, too, that cheap energy, and in this case cheap heating, is especially welcome in poorer households, whose power bills constitute a larger percentage of their budgets.

So fill up your propane tanks, America! Now we’re cooking with gas…

Merkel: Migrants “The Biggest Challenge” in Europe

Despite talks that ran late into the night, European leaders failed to come up with a lasting framework for resettling refugees based on quotas yesterday. EU leaders instead agreed to a one-time resettlement of up to 60,000 asylum seekers who landed in Italy and Greece across the bloc over the next two years—but with special opt-out clauses for the UK, Ireland, and Denmark, and certain exemptions for Bulgaria and Hungary. In proper European fashion, the decision on specific refugee allotment was deferred to an EU ministerial meeting scheduled for the end of July.

The exact terms of this “modest” deal are in some ways less telling than the story behind the meeting, however. As The Guardian reports:

A summit that also had to grapple with the Greek debt crisis and the British referendum on whether to stay in the EU was almost entirely consumed until 3am on Friday by the blazing row over a scheme criticised by humanitarian agencies as risibly inadequate for the scale of the problem.

Italy and Lithuania traded barbed insults, while two EU presidents – Donald Tusk, chairing the summit, and Jean-Claude Juncker, the head of the European commission – fought for hours over the wording of the summit statement, which could not be agreed.

The immigration crisis has already started to shake the Italian government; given Italian PM Matteo Renzi’s incomplete, vital reforms and Italy’s economic importance, that has Europe-wide implications. Even to get this level of attention from Brussels, Renzi had to threaten to open the floodgates by permitting all the migrants in Italy to head to other European destinations. And 60,000, while substantial as an absolute number, is small as a percentage the overall number of asylum-seekers now on Europe’s shores.

Meanwhile, Greece is still a destination of choice for refugees from Syria. Even though the country is in the midst of what by Western standards is a huge crisis, much of the Levant and as far afield as Afghanistan is far worse, and Greece is relatively easy to reach. Hungary is building immigration walls within Europe (if not within the EU), and the political discord exists not just at the ministerial level, but within almost every nation in the form of the populist parties.And it appears one European leader, at least, seems to be grasping the magnitude of this:

Angela Merkel of Germany, which takes in far more asylum seekers than any other country, described the immigration crisis “as the biggest challenge I have seen in European affairs in my time as chancellor”.

During those 10 years, Merkel has been the key figure in five years of eurozone crisis and is the lead European trying to deal with Russia’s military partition of Ukraine.

Now, we can make some allowance for hyperbole after a long, heated meeting; the euro crisis and the looming Russians are still very important, and in many ways more imminent threats to continental unity than the immigrant crisis. But Merkel’s remark does convey the seriousness with which this issue needs to be considered—it is a strategic, not simply a humanitarian, problem.

The chaos in Libya is a problem that Europe created (with substantial American help), that Europe has no intention of or plan to fix anytime soon, and that has become a gateway for much of Africa. Meanwhile, Europe still does not have the cultural resources to assimilate a large immigrant population successfully in many places, nor the legal architecture to allow it to deal with this crisis (either by distributing immigrants, turning them away, or both). It’s a serious problem that is not likely to abate anytime soon.But Merkel’s candor—and the raw emotions on display last night—may be a good sign. As they say, the first step to solving a problem is admitting you have one.

Here’s Why Opec Is Anxious

The Organization of Petroleum Exporting Countries was formed largely to influence the market to favor its member petrostates, but the cartel has taken a new strategy recently. Crude prices are down more than 40 percent thanks to burgeoning global oil supplies and tepid demand in Europe and Asia. In the past, OPEC would cut production in times like these to set a price floor to the market, but this go around things are different, as Saudi Arabia has pushed through a strategy of inaction in an attempt to squeeze out non-OPEC producers (like the upstart, relatively high-cost American shale firms) for market share. As Bloomberg reports, OPEC has real cause for concern about its share of the global oil market:

The Organization of Petroleum Exporting Countries’ share of the global crude market dwindled to 41.8 percent in 2014, from 43.3 percent the previous year, according to the group’s Annual Statistical Bulletin. Libya accounted for more than half the output reduction. OPEC’s 12 members pumped an average of 30.68 million barrels a day last year, according to the report by the group’s Vienna-based secretariat.

The erosion of OPEC’s dominance by surging North American shale oil prompted the group to abandon its decades-long role of balancing world markets in November. Guided by Saudi Arabia, the organization chose instead to maintain output and pressure higher-cost rivals to curb their production in the face of a global glut. The kingdom completed the most wells last year since 2008, and the increase from 2013 was the biggest in a decade in percentage terms.“The OPEC policy is probably the only option they have,” Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by e-mail. “U.S. shale is now the swing producer.”

OPEC’s market share in 2014 was its lowest since 2003. Its exports to Asia dropped more than half a million barrels per day from the previous year; North American exports were down 312,000 bpd. Saudi Arabia, OPEC’s largest supplier by volume, saw its own share in Asian markets drop significantly. Reuters reports:

Saudi Arabia lost its spot last month as India’s top oil supplier to Nigeria for the first time in at least four years, according to ship tracking data compiled by Reuters, as the world’s top crude exporter struggles to maintain market share in Asia.

The OPEC kingpin also fell behind Russia and Angola as the biggest crude supplier to China last month, official data showed this week.

Meanwhile, Iran is waiting in the wings, keen on boosting its own crude exports if it manages to sign a nuclear deal and Western sanctions are removed. Around the world, in every regional market, oil suppliers are engaged in a high-stakes fight to ply their wares, even if it means swallowing lower revenues as a result of bargain prices.

Here’s What has OPEC So Anxious

The Organization of Petroleum Exporting Countries was formed largely to influence the market to favor its member petrostates, but the cartel has taken a new strategy recently. Crude prices are down more than 40 percent thanks to burgeoning global oil supplies and tepid demand in Europe and Asia. In the past, OPEC would cut production in times like these to set a price floor to the market, but this go around things are different, as Saudi Arabia has pushed through a strategy of inaction in an attempt to squeeze out non-OPEC producers (like the upstart, relatively high-cost American shale firms) for market share. As Bloomberg reports, OPEC has real cause for concern about its share of the global oil market:

The Organization of Petroleum Exporting Countries’ share of the global crude market dwindled to 41.8 percent in 2014, from 43.3 percent the previous year, according to the group’s Annual Statistical Bulletin. Libya accounted for more than half the output reduction. OPEC’s 12 members pumped an average of 30.68 million barrels a day last year, according to the report by the group’s Vienna-based secretariat.

The erosion of OPEC’s dominance by surging North American shale oil prompted the group to abandon its decades-long role of balancing world markets in November. Guided by Saudi Arabia, the organization chose instead to maintain output and pressure higher-cost rivals to curb their production in the face of a global glut. The kingdom completed the most wells last year since 2008, and the increase from 2013 was the biggest in a decade in percentage terms.“The OPEC policy is probably the only option they have,” Ole Sloth Hansen, an analyst at Saxo Bank A/S in Copenhagen, said by e-mail. “U.S. shale is now the swing producer.”

OPEC’s market share in 2014 was its lowest since 2003. Its exports to Asia dropped more than half a million barrels per day from the previous year; North American exports were down 312,000 bpd. Saudi Arabia, OPEC’s largest supplier by volume, saw its own share in Asian markets drop significantly. Reuters reports:

Saudi Arabia lost its spot last month as India’s top oil supplier to Nigeria for the first time in at least four years, according to ship tracking data compiled by Reuters, as the world’s top crude exporter struggles to maintain market share in Asia.

The OPEC kingpin also fell behind Russia and Angola as the biggest crude supplier to China last month, official data showed this week.

Meanwhile, Iran is waiting in the wings, keen on boosting its own crude exports if it manages to sign a nuclear deal and Western sanctions are removed. Around the world, in every regional market, oil suppliers are engaged in a high-stakes fight to ply their wares, even if it means swallowing lower revenues as a result of bargain prices.

Tsipras: Referendum a Week From Sunday

Twitter is abuzz this Friday evening over the shocking news that Greece’s Alexis Tsipras will soon address the nation and call for a referendum for Sunday, July 5.

#Tsipras expected to give TV speech any minute. Rumors abt. referendum next Sunday, parliamentary session tmrrw. #Greece

— johanna jaufer (@johannajaufer) June 26, 2015

PM Tsipras communicated with former PM and ND leader Samaras. Confirmed referendum & discussion tomorrow in parliament. /via @g_evgenidis

— The Greek Analyst (@GreekAnalyst) June 26, 2015

And so it is. #Greece 's Skai tv reports Tsipras will call referendum

— Alessandro Speciale (@aspeciale) June 26, 2015

This comes after Angela Merkel had pleaded with Tsipras directly to accept the offer on the table, indicating that she would not be able to make it any better at tomorrow’s scheduled meeting of Europe’s finance ministers, which was being billed as a last-ditch effort to patch things up.At first blush, this looks like a smart move by Tsipras: it offers him a chance at doing an end-run around his more strident leftist allies who are hell-bent on rejecting any sort of deal with the EU if it means making any sorts of painful cuts to social programs. Staying in Europe and on the euro remains a popular proposition among Greeks, so an up-down vote on the Troika’s proposal could gain Tsipras the mandate he needs to pull his country through this crisis.Tsipras has been described as enigmatic and unpredictable, even by European leaders who have closely interacted with him over the last five months, so we can’t yet know to what extent he is a pragmatist vs. an ideologue. But as things stand right now, we surmise it would take a very committed ideologue to plunge his country into truly cataclysmic penury.Of course, nothing has been officially announced yet at time of writing. Tsipras has been meeting with his cabinet, and will hold parliamentary debates tomorrow. And of course, a lot can (and undoubtedly will) happen between today and next Sunday. The Greeks are known for their drama, after all.